WASHINGTON, Sept. 28, 2016 - Egg producers are facing a massive bill, estimated be at least $5.6 billion, to remove the cages from their farms, and they fear the cost could turn out to be steeper. Now, Agriculture Secretary Tom Vilsack has become personally involved in an effort to work with the food industry and egg producers to help them cope with sweeping conversion to cage-free systems.

The industry’s transformation is the result of a series of commitments that supermarket and restaurant chains and food service giants have made to shift to cage-free eggs over the next decade.

About 10 percent of the 300 million laying hens nationwide are currently raised without cages, including organic operations. It’s estimated that by 2025 farms will need to install cage-free systems for an additional 140 million hens, according to USDA. At an estimated price tag of $40 per bird, that will cost the industry $5.6 billion. The United Egg Producers says the cost could be closer to $8 billion.

As if that’s not bad enough, producers say they also worry that their investment in new cage-free systems could be squandered if animal welfare advocates someday force the food industry to demand additional changes. “Farmers need to know what they can build and invest in right now,” said Chad Gregory, UEP’s president and CEO.

The concern, Gregory tells Agri-Pulse, is that animal welfare groups will demand that hens should be provided outdoor access or raised on pasture. UEP has a current standard for cage-free production that allows the use of what are known as multi-tiered aviaries, structures that provide a place for hens to feed, perch and lay their eggs.

Vilsack is alarmed enough about the issue that he personally attended a meeting at USDA last week with Agricultural Marketing Service staff and representatives of the food and restaurant industry, farm groups and Gregory.

According to a USDA summary of the meeting obtained by Agri-Pulse, there was consensus that the egg industry’s cage-free transition “requires a thoughtful, collaborative approach beginning with a common definition of ‘cage-free’ so that producers have a clear goal and those selling eggs and egg products can articulate what that means to consumers. USDA will continue to check in periodically to ensure this transition remains on track.”

Gregory said that Vilsack’s interest in the issue was clear at the meeting. “He is very, very concerned about this transition, about will there be enough eggs, cage-free eggs in 2025? He’s very concerned about the farmers feeling confident about what they can build, invest in. … You could see it in his body language.”

The Humane Society of the United States, which has led the push to get food industry to shift to cage-free eggs, was not represented at the meeting. But Paul Shapiro, HSUS’ vice president for farm animal production, tells Agri-Pulse that his group supports UEP’s current standards for cage-free and won’t push to allow hens outdoors. “Free-range and cage-free are two different things and we are not trying to conflate them,” he said.

He said he trusted UEP to maintain adequate cage-free standards and to update them as necessary as new science develops. “They have been doing it without our input, and I believe they will continue to do it. The UEP wants to have good standards.”

That still leaves the producers’ concern about how to pay for conversion of their farms to cage-free before there is an adequate market. A few of the 160 food companies and restaurant chains shifting to cage-free are doing so in the next few years. Taco Bell is going 100 percent this year, Costco in 2018, but most aren’t doing so until much later, typically 2024 or 2025, which allows for a 10-year phase-in. “We don’t want egg farmers going out of business between now and then because they don’t know how to pay for it,” said Gregory.

Andy Harig, senior director of government relations for the Food Marketing Institute, which represents supermarket chains, said his member companies are committed to working with producers to address their concern. The 10-year transition period that most of the retailer commitments provide were designed to allow egg producers to make the conversion “in hopefully as painless a way as possible,” he said.

Harig, who attended last week’s USDA meeting, also said that it’s important to have industry and animal welfare groups agree on a cage-free standard on which producers can rely. How that would be done is still to be determined. “Obviously we would like to have as broad a buy-in as possible for it. It’s working out how to get there.”


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