Iowa Public Television


Cage-Free Eggs Could Raise Consumer Prices

posted on September 10, 2010

Hello, I'm Mark Pearson. Equity markets moved higher this week as investors held on to newfound economic optimism.

The Dow Jones Industrial Average closed out the week with a gain of 48 points Friday. The modest tick upward capped the seventh winning day of gains out of the past eight.

Bullish sentiment was supported by a Commerce Department study revealing INVENTORIES HELD BY WHOLESALERS surged in July by 1.3 percent. That's the largest increase in two years and it was triple the gain forecast by many economists.

According to the report, SALES AT THE WHOLESALE LEVEL increased 0.6 percent in July, after posting back-to-back monthly declines. That's their best showing since April.

Hopes of avoiding a so-called, "double-dip" recession also were buoyed this week when the Labor Department announced America's dreaded trade deficit narrowed sharply in July as exports rose to their highest level in nearly two years.

Since agriculture occupies an all-too- rare bright spot in an otherwise gloomy U.S. trade picture, surging demand from overseas is a welcome development for the nation's farmers and ranchers.

These days though, some of the production methods employed by the agricultural sector are vilified, by some, for a host of social, environmental and even ethical reasons.

A case in point can be found in the chicken coop, where animal rights activists are capitalizing on the recall of nearly half-a-billion eggs to blast production techniques.

The recent nationwide recall involving half a billion eggs has led to more debate between conventional and so-called cage-free egg production.

According to a recent study by the Poultry Science Association, conventional cage housing evolved as a cost-effective, vertically integrated production system. But animal rights organizations like the Humane Society of the United States urge producers to switch to cage-free livestock systems.

According to the study, mandating alternative housing methods would inevitably raise production costs which would then be passed on to consumers.

In 2008, California voters passed a controversial ballot measure known as Proposition 2 by more than 60%.

Proposition 2 Web Video: "Pigs can stretch their limbs out if you check the box for yes. And for the family farmer, you're doing what is best…"

Prop 2 prohibits farmers from raising pregnant pigs, egg-laying hens, and veal calves in small cages or crates. The measure does not go into effect until 2015 but agriculture groups like the American Farm Bureau claim the proposition could negatively affect livestock producers.

Data from California's shift from conventional cages towards cage-free structures shows farm-level costs could increase by 40 percent per dozen eggs – a price tag passed on to consumers.

However, economists predict that even with a 40 percent increase in production costs, egg consumption would likely fall by less than 10 percent.


Tags: agriculture chickens eggs markets news