Economic and market issues on the sustainability of egg production in the United States: Analysis of alternative production systems

Abstract

Conventional cage housing for laying hens evolved as a cost-effective egg production system. Complying with mandated hen housing alternatives would raise marginal production costs and require sizable capital investment. California data indicate that shifts from conventional cages to barn housing would likely cause farm-level cost increases of about 40% per dozen. The US data on production costs of such alternatives as furnished cages are not readily available and European data are not applicable to the US industry structure. Economic analysis relies on key facts about production and marketing of conventional and noncage eggs. Even if mandated by government or buyers, shifts to alternative housing would likely occur with lead times of at least 5 yr. Therefore, egg producers and input suppliers would have considerable time to plan new systems and build new facilities. Relatively few US consumers now pay the high retail premiums required for nonconventional eggs from hens housed in alternative systems. However, data from consumer experiments indicate that additional consumers would also be willing to pay some premium. Nonetheless, current data do not allow easy extrapolation to understand the willingness to pay for such eggs by the vast majority of conventional egg consumers. Egg consumption in the United States tends to be relatively unresponsive to price changes, such that sustained farm price increases of 40% would likely reduce consumption by less than 10%. This combination of facts and relationships suggests that, unless low-cost imports grew rapidly, requirements for higher cost hen housing systems would raise US egg prices considerably while reducing egg consumption marginally. Eggs are a low-cost source of animal protein and low-income consumers would be hardest hit. However, because egg expenditures are a very small share of the consumer budget, real income loss for consumers would be small in percentage terms. Finally, the high egg prices imposed by alternative hen housing systems raise complex issues about linking public policy costs to policy beneficiaries.

Hen egg carotenoids (lutein and zeaxanthin) and nutritional impacts on human health: a review

“…Housing density and reduced space per hen have aroused concern about the hen's welfare. The European Union Council Directive on welfare of laying hens, 1999/74/ EC, required conventional laying cages to be phased out by 2012 (CEC, 1999 Sumner et al, 2011). Family poultry production systems are promoted in Ghana, Tanzania, and Zambia by the Food and Agriculture Organization of the United Nations and the International Egg Commission.…”

Investment Behavior of Canadian Egg Producers: Analyzing the Impacts of Risk Aversion and Variability of Prices and Costs of Production

“…Donohue and Cunningham (2009) higher variance in grain prices was therefore transmitted to production costs but to different degrees given that, depending on the type of production, grains made up different proportions of the feeds. Sumner et al (2010) demonstrate that the contribution of food to the production cost is 10% higher in egg production with caged hens than in cage-free production.…”

“…The second step consisted of finding the costs of other types of eggs (Omega-3 and free-range eggs) and estimating their variance. To do this we use the results obtained by Sumner et al (2010) and Van Horne and Bondt (2003). Summer et al (2010) show that the total production cost of Omega-3 eggs is 1.17 times higher than that of conventional eggs and that the cost of freerange eggs is 1.41 times higher.…”

“…Sumner et al (2010) estimate the contribution of the various cost components to the total production cost of eggs.…”

Egg Consumption among Young People: A Study through the Application of the Logistic Regression Model

“…This tendency is favoured both by the innovations in farming supported by the major producers and by a marketing activity aimed at orientating communication towards consumer welfare and health (Andersen, 2011;Sumner et al, 2011;Lanfranchi et al, 2014a). The action of the leading industries was directed to the promotion of the freshness and food safety aspect which are today two essential elements for purchasing choices.…”