Cage Free Egg Insight

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Cage Free Egg Insight

Jan. 10, 2020

The road to cage-free eggs has truly become a “chicken or the egg” scenario, testing whether consumers or producers will push the industry forward. Major egg producers are hesitant to undertake the necessary capital improvements to convert operations to cage-free due to uncertainty surrounding the longevity of cage-free demand. Simultaneously, consumers have been slow to purchase cage-free eggs as limited supplies have kept prices relatively high. While both sides have been reluctant to fully commit, we expect that producers will likely push the industry toward cage-free and unlock this market potential. Legislation creating cage-free demand on the West Coast and the ability for producers to use convertible facilities—which can switch between conventional and cage-free production—is making the investment more attractive. Furthermore, producers who quickly make the transition may achieve high margins before expanding supplies reduce the price premium over conventional.