WattAgNet: US consumers still prefer cheaper cage-produced eggs

With the tsunami of cage-free egg purchase pledge announcements this year, you might think U.S. egg producers would be struggling to meet the surging demand for cage-free eggs, but that isn’t the case. A recent story on Marketplace explained how the current glut of cage-produced eggs has resulted in very low retail egg prices and that many consumers just aren’t willing to pay as much as $2 more per dozen eggs to get cage-free eggs.

The net result is that some of the increased production of cage-free eggs are being packed and sold as cage-produced eggs, because the market just isn’t absorbing the increased supply of cage-free eggs. Free markets have a very efficient, if sometimes painful, way of matching supply with demand. The story has Terry Pollard from Big Dutchman mentioning egg producers canceling or delaying orders for cage-free systems because of the current supply glut of cage-free eggs.

Delaying increases in cage-free hen housing as a result of the current supply-and-demand situation is a logical response by producers, but there is another option. At some point, won’t a retailer just decide to offer lower prices on cage-free eggs? If they do, we can learn how much of a premium consumers are willing to pay, and the market will sort out how much of a premium egg producers need to maintain cage-free flocks and to expand.

I hope the market is allowed to sort out what consumers really want, but I fear that pressure from activists groups will be enough to take away consumer choice when it comes to how U.S. hens are housed. I swore off shopping at BJ’s because of the company’s cage-free purchase pledge, but now all of my other shopping options have made similar pledges. If consumers keep buying less expensive eggs, will grocers really pull them off the shelves?

Terrence O'Keefe is editor of Egg Industry and content director of agri-business at WATT Global Media. To contact O'Keefe, email tokeefe@wattglobal.com.