Impact of alternative hen housing on egg prices, consumption estimated

Mandated alternative housing for laying hens, set to take effect in California in 2015, will likely cause farm-level cost increases of about 40% per dozen of eggs, but may not substantially reduce egg consumption by US consumers, say investigators from the University of California, Davis.

Relatively few US consumers now pay the high retail premiums required for nonconventional eggs from hens housed in alternative systems, and current data make it hard to tell how willing they will be to pay premium prices for such eggs. European data — where the move toward alternative housing for layers is well under way — are not applicable to the US industry structure, investigators say.

However, experiments indicate that additional US consumers would be willing to pay some premium and egg expenditures are a very small share of their budget, so the real income loss for consumers would be small in percentage terms, they say.

It is estimated that a sustained farm-level price increase of 40% would likely reduce egg consumption by less than 10%, Dr. Daniel A. Sumner and colleagues say in the January 2011 issue of Poultry Science.

Up to 30% drop in EU egg supply possible

Meanwhile, European layer producers may be gradually moving to alternative housing systems, but as many as 100 million birds could still be in conventional cages after the ban takes effect in 2012, and the eggs they produce cannot be marketed in the EU, according to reports on thepoultrysite.com.

In December, members of the European Parliament called for the EU Commission to take “urgent action” to ensure that egg producers comply with the ban and called for “dissuasive sanctions,” even though egg supplies may be cut by up to 30% and egg prices may go up substantially since some member states won’t be able to comply with the ban in time.