Cage-free US egg industry: sooner rather than later

It was back in late 2018 that voters in California approved Proposition 12, also known as the Farm Animal Confinement Initiative. Full implementation of this law will begin at the end of 2021. As explained in a California Department of Food & Agriculture (CDFA) news release, Proposition 12 requires that laying hens, nursing sows and veal calves “be housed in confinement systems that comply with specific standards for freedom of movement, cage-free design and minimum floor space”. Under this law, by 2020, egg-laying hens were each to be given 1 square foot (0.093 m²) of floor space if caged, and by the end of 2021, all egg-laying hens must be housed in cage-free barns.

New law has implications outside California

However, the law also has reach outside of California in that Proposition 12 prohibits any business from knowingly engaging in the sale within the state of shell eggs, liquid eggs, whole pork meat or whole veal meat from animals housed in a “cruel manner” contrary to the standards outlined. This means that farmers in states outside California must also comply with the same rules that apply to their counterparts in California, as do processors who market food products containing liquid eggs. The state of California has the largest population (almost 40 million people) of any state in the US. A large proportion of the eggs consumed by Californians are produced within the state.

Legal challenges

It is no surprise, therefore, that there have been lawsuits related to Proposition 12. The North American Meat Institute challenged it on the basis that over half of US state governments (more than 25 of the 50 in total) do not want 1 state applying its laws to other states. The Institute also noted that Proposition 12 threatens “the free flow of interstate commerce”. However, at the end of June, the US Supreme Court declined to review the legislation. The American Farm Bureau Federation together with the National Pork Producers Council have also launched a separate lawsuit against the state of California over Proposition 12, which is currently being reviewed by the US Ninth Circuit Court of Appeals.

Farmers in states outside California must comply with the same rules that apply to their counterparts in California if their eggs are sold in California. Photo: Ronald Hissink

Lack of detail

In early July, the United Egg Association’s (UEA) Further Processors Division which represents firms that process eggs into food products, sent a letter to the California Department of Food and Agriculture (CDFA) asking for clarifications related to Proposition 12. “Our members are committed to complying with the regulations when they become final,” the UEA states in the letter. “Unfortunately, there remain a number of ambiguities”.

For example, does Proposition 12 apply to food products that contain liquid egg but are recognised by the US Department of Agriculture as meat products because they contain 2% or more cooked meat? The letter provides examples of these products, such as “cooked scrambled egg mixes, quiches, egg bites or egg frittatas with 2% or more cooked meat”.

Other areas of confusion abound. UEA members want certainty about the location where a company might take possession of liquid eggs to be sold into California in any form, whether the exemption for charitable donations of egg products applies to federal procurement programmes and whether or not Proposition 12 completely supplants Proposition 2, passed in 2008.

The United Egg Association wants maximum clarity on which products fall within the Proposition 12 framework. Photo: Ronald Hissink

Opposition to timeline

The Association of California Egg Farmers strongly opposes the timeline in Proposition 12 that requires all laying hen housing be cage-free by the end of 2021. The state government was required to finalise the implementation regulations by September 2019. The CDFA only issued the proposed regulations in May 2021 and had a public commentary period that closed in mid-July. In terms of numbers, the association states that California’s 40 million people each consume about 300 eggs per year and, typically, 1 hen produces that number of eggs during that time. Thus, 40 million hens are needed to meet California’s demand for eggs. Many of these hens are housed within the state.

The association explains on its website that collectively, California egg farmers have been transitioning a percentage of hens to cage-free housing every year and that they are on track to become 100% cage-free by 2025. This was the date that had been agreed upon by the Humane Society of the United States and the US food industry to exclusively supply 100% cage-free eggs to consumers in California and beyond.

Deadline difficulty

Changing the deadline to the end of 2021, says the Association of California Egg Farmers, could result in supply disruptions, price spikes and an egg shortage. It estimates that only 65% of the California eggs will be produced by hens in cage-free housing by the end of the year. “The California egg farmers who remain in business,” states the Association of California Egg Farmers, “will be required to accelerate their business plans, seek construction loans, obtain permits and spend hundreds of millions of additional dollars…to avoid severe criminal penalties”.

Egg producers were eyeing 2025 as the cage-free date, moving the date forward to 2022 could lead to egg shortages. Photo: Ronald Hissink

Another industry perspective

United Egg Producers (UEP, the main US egg farmers’ association) represents both producers that ship to California and those who are located in California. The organisation has taken a “neutral position” on Proposition 12. “Eggs sold in California have had to meet unique requirements in California for some time now, with the earlier passage of Proposition 2 for shell egg producers,” states the UEP. “While Proposition 12 changes housing requirements, in general, the regulatory responsibilities are largely the same for egg producers. We don’t have calculated costs for the implementation of the requirements of Prop 12, although the addition of egg products certainly will add costs to further processors.”

Calls for delay

One of the many processors affected by Proposition 12 (Sunnyvalley) is located in the city of Manteca, California. As reported recently, it has joined a “growing chorus of calls” for the state to postpone Proposition 12 implementation. The city’s mayor stated in a recent letter to the CDFA: “we believe that without the appropriate time for out-of-state producers to comply, small, family-run California-owned businesses will be irreparably harmed.” The Food Equity Alliance has also called for a delay in Proposition 12 implementation, focusing on the expected increase in pork prices and decreased availability of pork in the state. In addition, the California Hispanic Chambers of Commerce has stated that both businesses and consumers will be affected negatively when Proposition 12 takes effect.

Kitty Block, president and chief executive officer of The Humane Society of the United States, speaks at the Humane Society Gala in 2018. Photo: ANP/John Salangsang