McDonald's cage-free egg pledge pressures farmers, squeezes supply

Tue Sep 22, 2015 1:34pm EDT
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By Tom Polansek and Rod Nickel

CHICAGO/WINNIPEG, Sept 22 (Reuters) - This month's pledge by McDonald's Corp to phase out eggs laid by caged hens in its North American restaurants will increase competition for limited supplies of cage-free eggs.

The ban, which follows similar moves by Burger King Corp and food services company Sodexo SA, carries higher costs that may, at least initially, sting farmers.

For the egg industry, the transition to "cage-free" production will be slow and expensive. Only six percent of U.S. hens, or about 18 million birds, are currently raised without cages, according to trade group United Egg Producers.

Having more food companies switch to cage-free eggs is "a mixed blessing because it strains supply," said Deborah Hecker, a vice-president with Sodexo North America.

Sodexo went cage-free for eggs still in the shell last summer in the United States and Canada and aims to do the same for liquid eggs by 2020.

Cage-free eggs are produced by hens free to move around inside a barn, as opposed to conventional eggs that come from hens packed in cages alongside other birds.

Farmers say it can take up to five years to build new cage-free facilities or retrofit barns because they must obtain permits and raise money.

It is normal for U.S. farmers to provide about 80 square inches per bird in caged operations, which is less than the size of a sheet of notebook paper, according to the Coalition for Sustainable Egg Supply, an industry group. Cage-free facilities are often constructed with the equivalent of about 144 square inches per hen, the group said, though the chickens can move over larger areas.   Continued...