With the tsunami of cage free egg purchase pledge announcements thus year, you might think U.S. egg producers would be struggling to meet the surging demand for cage-free eggs, but that isn’t the case. The current glut of cage-produced eggs has resulted in very low retail egg prices and that many consumers just aren’t willing to pay as much as $2 more per dozen eggs to get cage-free eggs.
The net result is that some of the increased production of cage-free eggs are being packed and sold as cage-produced eggs, because the market just isn’t absorbing the increased supply of cage-free eggs. Free markets have a very efficient, if sometimes painful, way of matching supply with demand. The story has Terry Pollard from Big Dutchman mentioning egg producers canceling or delaying orders for cage-free systems because of the current supply glut of cage-free eggs. Delaying increases in cage-free hen housing as a result of the current supply-and-demand situation is a logical response by producers, but there is another option. At some point, won’t a retailer just decide to offer lower prices on cage-free eggs? If they do, we can learn how much of a premium consumers are willing to pay, and the market will sort out how much of a premium egg producers need to maintain cage-free flocks and to expand.