“Cage-free” eggs were supposed to be the next big thing in America. Over the past several years everyone from McDonalds to Wal-Mart has promised to convert to cage-free eggs on the premise that millennial consumers would demand at least 144 square inches of space for the layers of their morning omelettes to frolic in freedom. As it turns out, Americans couldn’t seem to care less whether chickens have 144 square inches of freedom or the hisotrical 67 square inches…they just want cheap eggs, hold the bullshit.
As Bloomberg points out this morning, egg producers all over the country are scrapping plans for cage-free projects as people simply don’t seem to be interested in paying 7.5x more for their “humane” products compared to the same ole eggs they’ve purchased their whole life.
A dozen cage-free large browns cost as much as $2.99 in the Midwest last week, for example, while a carton of Grade AA white conventionals went for as little as 39 cents, according to the U.S. Department of Agriculture.
That “higher-price gap,” as Cal-Maine Foods Inc. CEO Dolph Baker called it, has cut into specialty-egg demand. The company, the largest U.S. egg producer, said earlier this month it is adjusting its cage-free output accordingly.
The largest egg producers, from Rose Acres in Indiana to a project in Arizona, say their shutting down their cage-free capital projects until consumers show in interest in paying a market-clearing price for the product.
The producer, which started turning a profit in September after 15 months in the red, is finishing work on these types of barns in Indiana and Arizona and mothballing another Arizona project, Rust, the CEO, said. Then it’ll wait, for as long as it takes. “We are going to be in a holding mode until retail pays a warranted price.”
“It’s been bad,” said Marcus Rust, chief executive officer of Seymour, Indiana-based Rose Acre Farms Inc., the second-largest U.S. egg producer. It spent $250 million over four years to upgrade conditions; today about 20 percent of its hens are cage free. And now, Rust said, “we are shutting our construction program down.”
The whole industry is slowly climbing out of a period of losses, which sets up a sort of chicken-and-egg predicament: Many farmers are too strapped at the moment to build facilities they may need in a few years, when — some skeptics say if — big buyers make good on their cage-free promises.
Few “are in a hurry to make the transition,” said Jesse Laflamme, CEO of Pete and Gerry’s Organics in Monroe, New Hampshire. Farmers aren’t sure which way to turn or how fast. “It’s going to be turbulent.”
Of course, if you live in the great state of California then you have no choice but to buy cage-free eggs after legislators there passed a law requiring that “eggs sold in the state to be laid by chickens whose confinement allows them to lie down, stand up, extend their limbs and turn around.” We can only imagine how many $15 per hour minimum wage workers will be required to visit hen houses all over the state to ask each chicken to turn around…
The egg oversupply built up after the 2015 avian-flu outbreak killed tens of millions of chickens, sent prices soaring and spurred aggressive restocking. At the same time, some producers started expanding hens’ living quarters. A California law that year required eggs sold in the state to be laid by chickens whose confinement allows them to lie down, stand up, extend their limbs and turn around. McDonald’s and Wal-Mart said they’d aim to make the cage-free shift by 2025. Others in the business of acquiring wholesale eggs set similar goals.
Some pledgers, such as food-service providers Sodexo Inc. and Aramark, are well along the way to completely converting to cage-free for eggs in shells in the U.S., according to the advocacy group Compassion in World Farming. It said in a recent report that others, including Marriott International Inc. and Walt Disney Co., haven’t made public how they’re progressing. McDonald’s, which buys around 2 billion eggs every year in the U.S., is on track to meet its 2025 mark, the company said. Wal-Mart declined to comment, and Marriott and Walt Disney didn’t immediately respond to requests for comment.
Just another misinformed, liberal policy that disproportionately hurts the poorest American families…ironically, the families that Democratic California politicians say they’re most eager to help.
via http://ift.tt/2g9AF5m Tyler Durden