Can suspending a cage-free egg law solve the soaring price problem? Nevada takes a crack at it

LAS VEGAS (AP) — Back when egg prices remained securely under $2 a dozen in 2021, Nevada joined several other states concerned about animal welfare in requiring cage-free eggs.

Now four years later, a dozen eggs costs an average of nearly $5 in the U.S. because of the lingering bird flu, so Nevada passed a law the governor signed Thursday that will allow the state to suspend that law temporarily in hopes of getting residents some relief at the checkout counter.

But it is not quite that simple, which is why the other six states with the same laws are so far reticent to follow suit.

By relaxing the rule, Nevada might get access to additional eggs, but the supply of all eggs remains tight because nearly 159 million birds have been slaughtered since the bird flu outbreak began in 2022 to help limit virus spread. The virus prompts the slaughter of entire flocks anytime it is found.

It is not clear dropping cage-free laws will have a significant effect on egg prices that have peaked at an average of $4.95 per dozen because the farmers who collectively invested several billion dollars in making the switch can’t easily go back to raising chickens packed together in massive barns that they already spent the money to convert.

Even if all the cage-free laws went away, big corporations like McDonald’s and Sodexo remain committed to buying only those kind of eggs, ensuring strong demand for cage-free eggs.

University of Arkansas agricultural economist Jada Thompson said opening up Nevada to all kinds of eggs “could ease egg prices in Nevada very slightly,” but that it might make prices worse elsewhere because supplies are so tight.

Nevada tries to counter high egg prices

But Nevada is going to give it a try even if California, Massachusetts, Washington, Oregon, Colorado and Michigan don’t seem to be considering it. Arizona, Rhode Island and Utah also have cage-free laws on the books, but theirs won’t take effect for at least a couple more years.

Democratic Assemblymember Howard Watts III, who raises chickens in his Nevada backyard, advocated for the 2021 bill to promote the “standard of humane treatment” of the animals. But the ongoing bird flu outbreak in the U.S. has caused egg prices to to hit a record high, and cage-free eggs are generally even more expensive.

“One of the things that was not foreseen at that time was this major animal disease outbreak,” Watts testified Tuesday. “As a result, there was no regulatory flexibility to suspend those requirements in the event of a major supply chain disruption.”

Republican Gov. Joe Lombardo approved the 120-day suspension of the law Thursday. Ciara Ressel, a spokesperson for the Nevada Department of Agriculture said it will be about a month before people see an impact at grocery stores.

Brad Burdsall, owner and chief eggineer at Egg Works, said he is paying more than twice as much for a case of eggs than he was two years ago — $129 for 15 dozen case of eggs. The restaurant implemented a 50-cent surcharge per shelled egg until prices come down.

The Nevada bill signed Thursday will give the restaurant access to more sources of eggs, and Bursdall says he is hopeful he can drop that surcharge soon.

“I’m really hoping that the governor takes a good, hard look at this cage free thing and decides to keep this a permanent thing,” he said.

This month’s jump in egg prices was the biggest since the nation’s last bird flu outbreak in 2015. The previous high was set two years ago when eggs were selling for $4.82 per dozen on average.

The average prices mask just how bad it is in some places. Some Californians these days are shelling out $12.99 for a dozen, or more than a buck an egg. Some New York shops even started selling bundles of three eggs to help people who can’t afford a full dozen.

A minority of eggs are produced on cage-free farms

The concern with the cage-free requirements is that only about 121 million of the 304 million chickens laying eggs nationwide are raised on cage-free farms, so the supply is limited.

Many of the eggs those hens produce are promised to restaurant chains like McDonald’s and Panera, food service giants like Sodexo and Aramark and grocers under long-term contracts that help keep prices down. But even when they do have to pay a premium, grocers sometimes lose money on eggs by selling them cheaply to try to get shoppers in the door.

The number of cage-free chickens has steadily increased in recent years because of the laws and the pressure from the companies buying eggs, increasing exponentially from just 38 million at the start of 2017. But the United Egg Producers trade group has estimated it would take at least 226 million cage-free hens to meet all the demand for those eggs, and more customers are clamoring for them, so the supply is tight.

The total flock of chickens nationwide used to number above 330 million before the bird flu outbreak began.

Even as more egg farmers were converting to cage-free setups over the past decade, prices stayed between $1.40 and $2 per dozen most of the time with only the normal seasonal price spikes around Easter and Thanksgiving until this current bird flu outbreak began in early 2022.

If bird flu outbreaks happen to hit cage-free farms hard, there are fewer eggs out there that can replace the lost ones. For example, out of the nearly 47 million birds slaughtered just since the start of December, more than 3 million of them were on five cage-free farms in California.

Anytime birds must be killed, it takes months for a farm to resume producing eggs because of the time required to dispose of the carcasses, sanitize the barns and raise new chickens until they are about 5 months old and capable of laying eggs.

Other states resist overturning cage-free laws

California won’t consider dropping its cage-free law in part because the rule came from a measure voters passed in 2018, so voters would have to approve any major changes.

But there doesn’t seem to be much support for changes in other states either.

Michigan state Rep. Jerry Neyer, a dairy farmer and chair of the state House Agriculture Committee, said the idea that new cage-free laws are driving up egg prices is a “misconception.” The Republican added that most farms already adapted to comply with the law, so dropping the mandate wouldn’t cut costs.

A bill to repeal Colorado’s cage-free requirements, which just took effect on Jan. 1, was killed in its first committee vote last month. The sponsor, Republican state Rep. Ryan Gonzalez, argued that while the avian flu was a major factor in prices, the cage-free rules played a significant role. But the majority of lawmakers on the panel appeared skeptical.

Jonathan Kuester, who runs the small Historic Wagner Farm with about 200 Red Star hens in Illinois just outside Chicago, said he doesn’t think cage-free practices are the cause of the egg shortages.

He acknowledged his farm is more vulnerable to a bird flu infection than a traditional farm where chickens are confined inside a barn that can be better protected. Kuester’s birds roam free, where they might interact with ducks and geese that are the main carriers of the disease.

“The egg shortage that people are seeing is a result of some fairly large flocks being euthanized, and so fewer chickens are currently laying than were three or four months ago,” Kuester said. “There’s been a little bit of a panic, too. People are suddenly buying eggs as quickly as they can, and so you see that shortage.”

Funk reported from Omaha, Nebraska. Govindarao reported from Phoenix. Associated Press writers Sophie Austin, Joey Cappelletti, Michael Casey, Isabella Volmert, Jesse Bedayn, Erin Hooley and Dee-Ann Durbin contributed to this report.