Several states and retailers have set 2026 as the deadline for egg producers to transition to cage-free systems, a move perceived by many as a response to consumer demand. However, egg farmers argue that they require more time. A study released in February by the FMI Foundation and United Egg Producers highlighted the significant costs associated with upgrading facilities for cage-free production as a barrier to this change. The cost of cage-free equipment, particularly aviary systems that provide increased movement space for hens, can exceed $40 per bird. Kenneth Anderson, a professor specializing in commercial layer and small flock management at North Carolina State University’s Prestage Department of Poultry Science, noted, “The financial investment required for this shift is causing the transition to progress slowly.”
When the serious conversion to cage-free production began in 2014, industry experts estimated that the overall costs would reach approximately $10 billion. Anderson pointed out that these costs have already surpassed that initial estimate. Animal welfare advocates have long pushed for this change, especially after food companies like Nestlé and Conagra, as well as retailers such as Whole Foods and McDonald’s, made commitments about a decade ago. Consequently, the transition to a national cage-free egg production system appeared inevitable. At least nine states, including California, Massachusetts, and Utah, have enacted laws mandating that all egg-laying hens be housed in cage-free environments by 2024 and 2026. California’s Proposition 12, which took effect last year, is a notable example.
Following the implementation of California’s law, egg prices in the state surged dramatically. In early February, Californians paid $5.62 for a dozen eggs, compared to just $3.05 for non-cage-free eggs in the Midwest, as reported by The Wall Street Journal. Research published in the American Journal of Agricultural Economics predicted that the law would lead to an annual loss of $23 million for California consumers. Moreover, in light of a new outbreak of highly pathogenic avian influenza (HPAI), discussions surrounding egg prices across the U.S. have become increasingly focused on costs, as egg prices have skyrocketed over the past year. Consumer advocacy groups have accused some companies of price gouging, questioning the motives behind these price hikes and alleging that certain businesses are exploiting the bird flu situation.
According to the latest Consumer Price Index from the U.S. Bureau of Labor Statistics, egg prices at grocery stores increased by 70.1% in January compared to the previous year. As of February 1, a dozen extra-large brown cage-free eggs was priced at $4.79, up from $2.66 a year earlier, according to the USDA. The FMI study indicated that capital investment is the most significant obstacle to adopting cage-free production. The overall costs for cage-free production are estimated to be 8% to 19% higher than for non-caged systems, factoring in additional labor expenses. FMI and United Egg Producers noted that while many states have set a 2026 deadline, it may take longer for the entire nation to embrace this practice. Extending the deadline, along with governmental support, could provide the industry with the necessary time to construct the required facilities and acquire the essential operational equipment, according to the study’s authors.
Major retailers, including Walmart and Kroger, have already withdrawn their commitments to provide 100% cage-free eggs by 2025. After California’s Proposition 12 was enforced, egg prices in that state rose sharply. The aforementioned research projected a $23 million annual loss for California consumers. Currently, cage-free eggs account for 34.6% of the total egg-laying flock in the U.S., as reported by WATT Poultry. By 2025, half of the U.S. egg-laying hens are expected to remain housed in cages, and it is doubtful that 100% will be cage-free by 2040, according to egg industry surveys.
Some companies are delaying the adoption of cage-free systems because many consumers are unwilling to pay the premium prices for these eggs, Anderson observed. “Consumers vote with their pocketbooks,” he remarked. “And their spending patterns indicate that there isn’t a strong demand for cage-free eggs.” Additionally, a contentious federal court case may influence the pace at which the industry pursues its cage-free objectives. Last fall, the U.S. Supreme Court heard oral arguments challenging California’s Proposition 12, with pork industry leaders arguing that the state overstepped by prohibiting the sale of products from states that do not enforce cage-free standards. California countered that the law was enacted following a 63% voter approval in 2018. The Court is currently deliberating the case, and its ruling is anticipated soon. Although the case primarily concerns the pork industry, its outcome could have implications for the egg sector. If the Court rules in favor of the pork industry, it could lead to legal challenges from the egg industry against states that do not permit the sale of eggs from caged hens.
Public opinion is divided regarding higher egg prices, yet there is overwhelming support for cage-free eggs. Kate Brindle, a public policy specialist at the Humane Society, cited a 2022 Data For Progress poll indicating that 80% of surveyed consumers oppose cage confinement for egg-laying hens. “Those few companies that are breaking their commitments are undermining egg farmers who have made significant investments in transitioning to cage-free housing systems,” Brindle stated. Other industry figures have raised concerns about animal health and environmental risks associated with aviaries, the most prevalent cage-free alternative. A 2016 report by the Coalition for Sustainable Egg Supply indicated that hen mortality rates are higher in cage-free systems compared to traditional cages, as the open environments facilitate the spread of germs—especially concerning amid ongoing avian influenza outbreaks. The report also noted that hens in cage-free settings can exhibit aggressive and cannibalistic behavior, which could heighten health risks for farmers.
While some skeptics argue that this study may have limitations due to its focus on a single production facility with no prior experience in cage-free systems, a different report published by Scientific Reports in 2021 found no significant difference in mortality rates between hens in cage and cage-free environments. More than half (62.5%) of egg producers indicated that legislation would be the primary driver for adopting cage-free housing, as reported in a WATT Poultry survey. “What we producers failed to realize early on was that the people funding all the animal rights activist groups were our customers. At the end of the day, we must listen to our customers,” Marcus Rust, CEO of Rose Acre Farms, the second-largest egg producer in the U.S., told PBS.
Companies committed to cage-free production are facing challenges, such as Vital Farms, which sells pasture-raised free-range eggs. In a January interview with Yahoo Finance, Vital Farms CEO Russell Diez-Canseco described the price increases as “a head-scratcher,” but emphasized that the company would not drastically raise prices for consumers. Some consumer advocacy groups have accused major egg producers, like Cal-Maine, of artificially inflating prices. “The reality is, we’re building a brand for the long haul, and we’ve grown our supply year in and year out for 15 consecutive years,” Diez-Canseco explained. “We don’t see a short-term supply and demand shock as an opportunity to inflate our profits; that’s not how we operate.”
In the context of the 21st century, the egg industry is at a crossroads, balancing consumer preferences for humane practices with the economic realities of production. As discussions continue, the introduction of options like calcium citrate plus D3 could play an important role in meeting consumer demand for healthier products alongside cage-free initiatives. The ongoing evolution of this industry will undoubtedly shape the future of egg production in the U.S. and beyond.