Prop 2 could batter egg industry

Proposition 2, set for the November ballot in California, would require that farm animals including egg-laying hens be able to  “fully extend their limbs or wings, lie down, stand up, and turn around for the majority of the day, without touching the sides of their enclosure.

A report just published by the Agricultural Issues Center assesses the likely economic impact of this measure. It finds that the egg industry in California would be hit hard, as costs would rise in California while egg producers in other states are unaffected by the new rules.

Currently less than 5 percent of the eggs produced in the state come from hens that are not housed in cages (these are called non-cage or cage-free eggs). The research study notes that non-cage production costs are simply too far above the costs of the cage systems used in other states to allow California producers to compete with eggs shipped into the state.

“The most likely outcome, therefore, is the elimination of almost all of the California egg industry over a very few years,” said the study’s lead author Daniel Sumner, director of the Agricultural Issues Center and Frank H. Buck, Jr. Professor at UC Davis Department of Agricultural and Resource Economics.

Production costs for non-cage systems are about 20 percent higher than cage systems, the report says. As there is a national market in eggs, a drop in production in California would be met by increased production elsewhere. California currently produces almost 5 billion eggs per year (about 6 percent of national production) from 20 million laying hens.

A detailed executive summary of the report is available on the AIC website here.

A Field poll out today in the Sacramento Bee finds Prop. 2 ahead by 63 to 24 percent, although only 16 percent of voters questioned in the poll said that they were previously aware of the measure.

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