California Egg Law fallout
With less than a month to go till the January 2015 deadline on Prop 2, farmers near and far are struggling with compliance, to the tune of – in some states – millions of dollars. Putting the issue of farmers and their capital outlays aside for a moment, let’s consider what the California Egg Law fallout will be: is there enough supply of eggs to meet the shortage that will no doubt occur due to so many farmers not being able to comply?
If the forecasters are correct, CA consumers will purchase approximately 800 million dozen eggs next year alone. Even though Pop 2 passed by a majority back in 2008, all but five percent of eggs sold to California this year came from caged egg-laying hens. Come January 1, the demand will reach 750 million dozen eggs from the newer, bigger cages mandated by Prop 2 or cage free hens. You do the math: there are simply not enough cage-free eggs around the nation to keep pace with the projected demand. The result? Cage-free egg prices will skyrocket, passing that increase onto none other than the average consumer.
California’s egg sales
The impact on California’s egg sales will depend on the fallout from this mandate, but just to put it into perspective: when the law first passed in 2008, the number of imported eggs to CA was at 43 percent. Now, the number is closer to 60 percent, with the possibility to spur on a shortage of a whopping 20 million hens come January 1. Add to that the impact on the rising costs of all eggs, which are projected to rise due to the increase in yield losses, labor costs and feed prices.
Prop 2 basically mandates that egg farmers
The only way to know for certain is to wait and see. Prop 2 basically mandates that egg farmers must comply with the laws of the Prevention of Farm Animal Cruelty Act, which specifies that the cages for egg-laying hens must double in size. Proponents say kudos to California voters for choosing to prohibit what is considered in the industry as cruel confinement for chickens. Opponents say that this mandate will likely put local egg farmers in the poor house, not to mention the basic violations of the Constitution. A lawsuit brought by six states against the state of California says as much, and even though the case was thrown out in October by a federal judge, the outrage among many farmers isn’t going away. In terms of egg costs for consumers, some take the conservative route and say egg prices could go up but a few cents per dozen, while others say they could go up a penny an egg or even as much as 20 percent per carton.
To answer the question: is there enough supply? No there is not. How this will all play out remains to be seen come January and beyond.