Egg Industry - June 2019 - 8

8 ❙ EggIndustry
CAGE-FREE PLEDGES
However, Ibarburu said that, in order to meet pledges
made, the industry will have to convert housing at a rate
of 30.6 million cage-free layers per year for the next
seven years. That is nearly three times as fast as what the
industry has converted in the past three years.
"The ones that decide the direction of the industry are
not the ones who bear the risks," he said.

Cost concerns in transition to cage-free housing

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"We will need $9.5 billion of investments in the next
seven years, so about $1.4 billion a year to reach that
level," he said. Developing a new site adds more than 25%
to the cost.
In some situations, he said, producers are making
the transition when the replacement of old houses was
already needed. But the problem is that method may not
be fast enough to meet the market demand. In situations
where producers are building new construction rather
than replacing old conventional houses, this could lead to
a surplus of eggs. 
Ibarburu said this transition is complicated from a financial standpoint because producers are investing in the new
housing system, and they will have higher operating costs.
Producers are running into the problem where retailers
will buy some of the cage-free eggs at a premium cost,
but not all of them. So, the leftovers end up in the conventional market, leaving the producer with a smaller margin
to generate revenue.
"The big problem we are facing is that most of the
pledges come from the retailers. The retailers give the
consumers options and [consumers] tend to buy what is
less expensive," he said.
If the retailers can't sell the eggs, they're not going
to continue to pay a premium price. He noted that the
transition is easier for restaurants and food manufacturers to make because they're not presenting the
consumer with options.
However, on the other side of things, people looking
for cage-free eggs may only shop with retailers who make
the pledges.
"There might be less of a problem once the retailers

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Egg Industry - June 2019

Table of Contents for the Digital Edition of Egg Industry - June 2019

Egg Industry - June 2019
To meet cage-free pledges, industry will need to grow 3 times faster
Vaccine options that can improve fl ock health
Probiotic tools may help fl ock health challenges
Egg Industry - June 2019 - CT1
Egg Industry - June 2019 - CT2
Egg Industry - June 2019 - Egg Industry - June 2019
Egg Industry - June 2019 - Cover2
Egg Industry - June 2019 - CT3
Egg Industry - June 2019 - CT4
Egg Industry - June 2019 - 3
Egg Industry - June 2019 - 4
Egg Industry - June 2019 - 5
Egg Industry - June 2019 - To meet cage-free pledges, industry will need to grow 3 times faster
Egg Industry - June 2019 - 7
Egg Industry - June 2019 - 8
Egg Industry - June 2019 - 9
Egg Industry - June 2019 - 10
Egg Industry - June 2019 - 11
Egg Industry - June 2019 - 12
Egg Industry - June 2019 - 13
Egg Industry - June 2019 - Vaccine options that can improve fl ock health
Egg Industry - June 2019 - 15
Egg Industry - June 2019 - 16
Egg Industry - June 2019 - 17
Egg Industry - June 2019 - 18
Egg Industry - June 2019 - Probiotic tools may help fl ock health challenges
Egg Industry - June 2019 - 20
Egg Industry - June 2019 - 21
Egg Industry - June 2019 - 22
Egg Industry - June 2019 - Cover3
Egg Industry - June 2019 - Cover4
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