Increasing cage-free eggs

May 7, 2013 – Going to the grocery store and purchasing anything can be quite difficult – mostly because of the huge variety of products available to the consumer. Each company wants to sell you their brand because it is better, healthier, cheaper, etc., but it is ultimately up to the consumer to increase their knowledge and make an informed decision.

Dr. Jayson Lusk, on behalf of the World Society for the Protection of Animals, recently analyzed a consumer survey and in combination with his previous research, found that if consumers knew more about hen housing conditions, cage-free egg sales would likely increase.

Dr. Lusk, a professor and Willard Sparks Endowed Chair at the Department of Agricultural Economics at Oklahoma State University, said that the biggest problem preventing cage-free eggs from acquiring a larger market share is the knowledge of the customer. “Most people do not know much about egg production, and when you ask most American consumers, their perceptions about egg laying conditions are wrong.”

In fact, according to Dr. Lusk, previous studies have found that customers think anywhere from 40-70 per cent of egg-laying hens are kept in cages, while the reality in the U.S. is closer to 95 per cent. “People tend to have a more ‘romantic’ view of agriculture than is often the case,” he said.

In his report, Dr. Lusk used the example of Proposition 2 in California from 2008, a ballot initiative that passed with over 60 per cent in favour to ban conventional cages. Because of the large media initiative by supporters and proponents writes Dr. Lusk, there was an abundance of information on layer housing conditions available to the public. “Over that time period,” he said, “the market share for organic and cage-free eggs increased significantly when that vote and advertisements were going on”

As of 2008, the market share for cage-free and organic eggs was two percent. But, by using this information in addition to retail scanning data from Oakland and San Francisco, Dr. Lusk was able to predict how increasing consumer knowledge could affect egg sales.

Dr. Lusk forecasts that:

• A modest increase in consumer knowledge (from 10 to 25 per cent) could increase market share for cage-free eggs by 20 percent. If three quarters of consumers received information regarding layer housing, the market share of cage-free eggs could rise by up to 62 per cent.
• If conventional cages are eliminated, costs for customers conventional eggs would increase about 15 percent, potentially causing cage-free sales to grow by 12 per cent.
• As market share rises, production efficiencies would emerge, dropping the cost of cage-free eggs by 10 per cent – which could, in turn, increase market share.

Ultimately, Dr. Lusk added, it is the market that will determine what changes (if any) will be made with respect to egg sales. But the demand for cage-free and organic eggs will continue to increase.

“And if those things align in a way that result in improved living conditions for the hens,” he added. “That would be great.”