SEPTEMBER 29, 2015
Will the next egg you crack come from a chicken raised in a roomier barn? Foodies and farmers are in unusual agreement on the answer: If not now, then soon enough. Both say McDonald's recent decision to transition to "cage free" eggs for its McMuffins and other menu items was a tipping point in the $9-billion egg industry, which still produces 96% of its eggs in barns full of stacked wire cages. It will be increasingly hard to ignore a buyer of 2 billion eggs, especially given that McDonald's joined a flock of companies that already made similar supply-line switches — including the top three cafeteria service companies, and fast-food competitors Burger King, Dunkin' Donuts and Starbucks.
Since California passed a measure requiring more space for egg-laying hens in 2008, Washington, Oregon, Arizona, Michigan and Ohio have enacted laws regulating hen housing, while activists in Massachusetts have launched a similar measure aimed at the 2016 presidential ballot.
"The McDonald's announcement really settles the debate as to whether there will be a future for cage confinement in the egg industry — the answer is no, there won't be," said Paul Shapiro, vice president of farm animal protection for the Humane Society of the U.S. "How quickly that will happen is now the real question."
Ken Klippen, head of the National Assn. of Egg Farmers, agrees, but isn't exactly applauding the McDonald's decision. He penned an open letter to the company, challenging its assertion that it's more humane to give chickens more room, and reminding them that more manure may come into contact with eggs laid by hens that have access to floors. "I agree. This is a tipping point," Klippen said. "The egg farmers do want to respond to this because there is a segment of us that disagree with the merits behind that decision."
Glenn Hickman, though, isn't waiting to debate the merits. The Arizona-based egg producer, an indirect supplier to McDonald's, responded to the announcement with plans to build a modern, 2-million-hen facility. Hickman, like other West Coast producers already in the California market, has been moving toward roomier enclosures since Proposition 2 passed in November 2008.
California's Proposition 2, which took full effect in January, doesn't stipulate enclosure sizes. It requires that hens have the ability to turn around freely lie down, stand up and fully extend their limbs. The state Department of Food and Agriculture has since issued a rule requiring about 116 square inches per bird.
A 2010 law effectively expanded Proposition 2 to apply to all shell eggs sold in the state, which consumes roughly twice as many eggs as it produces. Before the law passed, Hickman housed several million chickens in the stacked wire enclosures known as battery cages, which leave each bird with less space than a sheet of photocopy paper.
By December, 4 million of his projected 10 million laying hens will live in more spacious "enriched" enclosures with amenities such as perches, scratch areas and private areas to lay eggs. About 200,000 already are being raised organically in cage-free facilities, he said. "When it comes to harvesting an egg, whether the chicken can fly up or down or scratch or perch really doesn't upset the production of the egg," Hickman said. "As long as we can convince the consumer that those things cost a little bit extra but they're worth it — and we can sell the eggs for a profit — we're happy to do so."
Frank Hilliker, a San Diego County egg farmer with about 16,000 hens, once despaired at the prospect of culling his flock to comply with Proposition 2. He and his sister even considered selling the family property, which is surrounded by suburban development. Hilliker instead became a reluctant convert, focusing on the same farm-to-table niche that foisted the change on him. "I'm a pretty conservative guy," he said. "Most of these people I deal with aren't so conservative. We don't talk politics." Hilliker is constructing another modern barn and hopes to have as many as 50,000 laying hens by December, most of them in enclosures that are compliant with Proposition 2.
Large-scale egg producers in the Midwest also have shifted production. Indiana-based Rose Acre Farms Inc., with about 25 million hens, has committed to switching to more ample enriched environments in any new barn construction.
The shift has driven up costs and widened the difference between wholesale prices in California and other markets, according to U.S. Department of Agriculture economists. The gap between California and New York, for example, rose to $1 in January, from a 12-cent differential in October 2014, according to the USDA. This week, the average wholesale price for a dozen white, large eggs hovered around $2.40 in California, up by $1.26 from this time last year, according to the USDA. The nationwide average was $1.78, up about 82 cents from the same period last year, according to the department.
Much of the recent price escalation has been attributed to outbreaks of avian influenza this spring, which wiped out more than 42 million laying hens in the U.S. Midwest. The egg industry has warned of price shocks because of the cage-free craze. Hilliker, for example, said he lost several customers after he made his transition, among them a discount grocer who bought about $4,000 worth of eggs each week.
Klippen said the industry will fight efforts to extend cage-free regulations. He publicly scolded McDonald's after its Sept. 9 announcement: "You may congratulate yourselves on this new policy, and animal activists will mark their score cards as accomplishing another defeat for egg farmers," he wrote. "The egg farmers themselves are wondering why anyone would want to revert to the former ways of producing eggs that was more stressful for the chicken and may compromise the quality and food safety of the eggs for their consumers." Klippen said McDonald's bowed to "a small group of consumers, who are sort of the animal activists."
But neither Hickman nor Hilliker is turning back any time soon. "It's been a challenge going cage-free, but it's reinvigorated me, as a farmer," Hilliker said. When he goes into his barns on a given morning, Hilliker said, "I'll look, and say, oh my God, I can't believe I did this — and survived. And I'm building the next one."
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