Most U.S. Egg Producers Are Now Choosing Cage-Free Houses

Jan 15, 2016
Originally published on January 17, 2016 10:07 pm

From McDonald's to Costco, Big Food has been declaring a shift to buying only cage-free eggs. Three more companies took the step this month: Denny's, sandwich chain Quizno's and Mondelez International, maker of Ritz crackers and Chips Ahoy cookies.

Here at The Salt, we've been wondering how egg producers are reacting.

So we called up the biggest name in chicken housing, the company Big Dutchman. It's a German company, despite its name, and it operates globally, manufacturing housing for both chickens and pigs.

Clovis Rayzel, president of Big Dutchman USA, says that the majority of American egg producers, when they order new chicken houses, now are choosing cage-free systems. "It's a very interesting and very big change compared to some years ago, and it is even more interesting because here in this country, we are seeing this change based solely on the market," Rayzel says.

That is, no law has required farmers to do this. California's voters did pass a measure, which came into effect at the beginning of 2015, requiring that egg-laying chickens have enough room to spread their wings and turn around.

But farmers could satisfy that requirement simply by reducing the number of chickens in each cage. Some farmers are installing "enriched" cages, also called colony cages, which offer more room, perches for chickens to sit on, and enclosed nest areas for them to lay their eggs.

Many American egg producers had long argued that cage-free eggs would inevitably be much more expensive than eggs from cage systems. But in recent years, European companies, such as Big Dutchman, have come up with designs for cage-free housing that allow for efficient, mechanized handling of hens and their eggs. In a 2015 industry-funded study carried out by researchers at Michigan State University and the University of California, Davis, eggs from a large cage-free house cost about 15 cents more to produce, per dozen, than eggs from traditional cages.

Many consumers appear willing to stomach that increase, and the cage-free label has proved powerfully attractive. Rayzel says there's now serious debate within the egg industry about whether cage-free production will replace cages entirely in the future.

Currently, only about 10 percent of chickens in the U.S. are being raised cage-free — one reason the food companies that are pledging a shift to eggs from chickens raised this way won't be able to fulfill those pledges quickly. McDonald's, for instance, says that the shift to cage-free could take 10 years. Cage-free production is growing, but only as fast as older chicken houses wear out and need to be replaced.

For his part, Rayzel thinks that for the foreseeable future, some portion of the industry will stick with cages to serve their most price-conscious consumers. "I think that after 10 years, we will still have a significant portion that is not cage-free," he says.

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The future of eggs appears to be cage free. More than a dozen big food companies have announced that they will buy only cage free eggs in the future. The list includes McDonald's, Denny's and others. The latest announcement came just today. And in a major shift, the egg industry appears to be just fine with this. NPR's Dan Charles is with us. Hi, Dan.

DAN CHARLES, BYLINE: Nice to be here.

SHAPIRO: Is this all driven by concern how the chickens are treated?

CHARLES: Yeah, it is. Egg producers half a century ago put their chickens into cages, essentially, for efficiency reasons. It was a way to mechanize everything. The eggs drop from the chickens and roll in one direction down to a belt which takes them out for processing. Chicken manure drops down onto another belt, which goes a different direction. Basically, it's a way of having large numbers of chickens in one house, and very few people are required to take care of them.

SHAPIRO: But it looks really bad when you see images of all of these chickens crammed into cages, unable to move. Many people see these videos, read articles about it and conclude this is inhumane.

CHARLES: Right. And those videos and stories have had a big effect. Advocates for animal welfare have been campaigning against this for many years. They had a big success in California some years back when a proposition was passed that said all eggs in California have to come from chickens that have the ability to spread their wings and turn around. This came into effect about a year ago. And over the past year, it's gone beyond that. Company after company has announced that, in the future - now, this will take some years, maybe a decade to carry out - but in the future, they will only buy eggs that are cage free. You mentioned some names, but there's also Subway, Costco. And the announcement today came from Mondelez International, maker of Nabisco crackers and Chips Ahoy cookies. I talked to the president of a company called Big Dutchman USA, which makes - it's the biggest maker of these chicken-housing systems, both cages and cage free. His name's Clovis Rayzel. And he said, in the past year, most of their orders are coming from egg producers who want to go cage free.

CLOVIS RAYZEL: This is a very interesting, very big change compared to some years ago. And it is, I would say, even more interesting because we are seeing this change solely based in the market.

CHARLES: By the market meaning that customers are demanding cage free, and farmers are responding.

SHAPIRO: What does that phrase actually mean? What do chickens in a cage-free environment - what does that environment look like?

CHARLES: Yeah, first of all, they are not running around outside on the pasture.

SHAPIRO: This is not "Old Macdonald Had A Farm."

CHARLES: No, this is still a very big barn filled with tens of thousands of chickens, but they have the freedom to go where they want. They can roam around on the floor. They can perch on rails, scratch in the dirt. And they can go into little nests and lay their eggs. But as in the cage systems, the eggs then roll onto a belt and go out to where they're needed.

SHAPIRO: One reason the egg industry resisted this so long was fears that it would drive costs way up. Is that still a concern?

CHARLES: That's right. You know, for years, the industry said this is impossible. We need cages. It's the only efficient way to produce eggs that people can afford. But there were laws in Europe that actually got rid of cages there. And the industry in Europe developed these cage-free systems and refined them. And the industry in the U.S. has figured out that these systems can be efficient, too. Costs are higher - maybe 15 cents per dozen of eggs. But if egg buyers are fine with a little extra cost, the egg producers are happy to switch. Not all of them, but so many are going cage free it's really a sea change in the industry.

SHAPIRO: NPR's Dan Charles covers food and agriculture for us. Thanks, Dan.

CHARLES: Thank you. Transcript provided by NPR, Copyright NPR.