April 27, 2019

Are we heading for a crash when it comes to a cage- and crate-free future in American agriculture?

By Wayne Pacelle

At the start of the second quarter, McDonald’s gave a detailed report on its progress toward its 2015 pledge to switch its entire egg supply to cage-free by 2025.  “The result, so far,” according to a statement from the fast-food giant, “is more than 726 million cage-free eggs sourced for our McDonald’s U.S. restaurants in 2019. By 2025, we expect to source 2.2 billion cage-free eggs every year.”  In short, it is now sourcing a third of all of its eggs from cage-free facilities.

The world’s largest restaurant chain, with 14,000 outlets in the U.S., accounts for about two percent of all egg sales in the U.S.

Though 2025 seems like a long way off, this announcement from McDonald’s is encouraging and hopeful, revealing intentional and meaningful progress toward its landmark pledge. McDonald’s is correct in noting that, “another 200 companies committed to moving to cage-free eggs,” after its pledge in 2015. That cascade of announcements amounts to a collective promise from Walmart, Kroger, Costco, Safeway, Target, and the rest of the food retail sector to a massive 10-year transition from battery cages to cage-free living environments.

The egg industry is one of the most consolidated sectors of animal agriculture. There are fewer than 75 business (almost all of them privately owned) that produce the vast majority of the 90 billion eggs sold in the U.S. each year.

The United Egg Producers estimates that cage-free hens produce approximately 20 percent of eggs in the U.S., while the remaining 80 percent derive from hens raised in conventional systems, principally battery cages that confine hens so severely they can barely extend their wings. Each bird in a battery cage system gets just 67 square inches of space – less than the surface area of an 8.5-by-11-inch sheet of paper. That means there are more than 250 million hens living in this extreme form of confinement, immobilized in cages for the duration of their harsh, brief 12- to 18-month life spans before they are gassed or otherwise killed.

The biggest egg farms operate “co-production” facilities, with some barns filled with birds in cages and other barns without them – the latter, often called aviaries, allowing hens to perch on book-shelf like aviary structures that allow the birds vertical and lateral movement.

The 50 to 60 million birds now living in cage-free systems already produce cage-free eggs for Whole Foods Market, Costco, and a small number of other retailers that do not sell any eggs from hens confined in cages. Consumers who shop at Walmart, Kroger, Safeway, and so many other supermarkets and superstores see cage-free eggs on the shelves, but they see a far larger volume of cheaper conventional eggs.  This birds-eye view of the industry tells us that battery cage eggs are still dominant in the marketplace, despite the nearly ubiquitous corporate pledges that these systems are inhumane.  Even though surveys reveal that consumers overwhelmingly oppose cage confinement and favor cage-free systems, they continue to buy more eggs in the U.S. from caged hens, revealing a a perplexing disconnect from a behavioral economics perspective. Burger King originally made a pledge to phase out eggs from caged hens by 2017, but it has not fulfilled that pledge – almost certainly because of a shortfall in the production of cage-free hens from its traditional suppliers. The fast-food company has pushed back its cage-free conversion endpoint to 2025, reverting to the timeline originally selected by McDonald’s, Walmart, and many other major food sellers.

In the last two even-year elections, voters in California and Massachusetts, who collectively represent close to 50 million consumers, passed ballot measures to require new in-state laying production standards and sales standards for eggs that are exclusively cage-free. California’s law stipulates that by the end of this year hens raised in the state must live on farms providing each bird with 144 square inches, and also that any eggs sold through retail outlets, must come from farms adhering to that minimum space standard.  Two years later, by the end of 2021, both ballot measures require considerably larger space allotments (the California law includes requirements for sellers to derive eggs from producers who adhere to the United Egg Producers’ cage-free standards). These fast-approaching deadlines mean McDonald’s, Walmart, Safeway and all other major food sellers in these states will need to comply with these new standards well in advance of their national 2025 deadlines. These legally prescribed conversion deadlines will help push forward the national conversion toward cage free, but California and Massachusetts together represent slightly less than a fifth of the national market for eggs.

But unless the 200 companies that have pledged to go cage free are actively working with their suppliers to assure that its cage-free egg supply will be met – as McDonald’s and Costco have done — our concerns about the availability of supply will prove true. If they don’t take action now, companies will resort to pushing back their deadlines, as Burger King did with its original 2017 pledge.

Some of the same dynamics are at work in the pig industry. Of the five million sows used for producing piglets raised for meat, 3.5 to 4 million are still housed in gestation crates – two-foot by seven-foot cages so confining they prevent sows from almost all movement. The nation’s top producer of pig-derived products, Smithfield Foods, is on the cusp of converting all of its company-owned and contract farms to gestation-crate free for the bulk of the animals’ lives. Smithfield began that process in 2007 and has been methodically working to achieve that goal.

Based on our original research however, major players in the pig farming industry, including Tyson Foods, are not retooling their farming infrastructure to meet the anticipated demand of food retailers. Most major American food retailers, from McDonald’s to Costco to Kroger, have pledged to stop purchasing pork from operations that confine sows in gestation crates by 2022. That date precedes the back-end commitment of many food retail companies for cage-free egg conversation by three years.

As with the egg industry, pig producers will have to invest billions in capital to make this transition work, and they’ll have to do so, at this point, over a shorter time horizon. California and Massachusetts have sale restrictions on pork from operators that rely on gestation crates, and their deadlines match the January 2022 deadlines that most of the businesses have imposed. We look forward to receiving a report, like the one McDonald’s issued on eggs, from these companies on their progress toward their 2022 crate-free pledges for pigs.

As a matter of practicality, it is simply impossible, from a construction and capital procurement perspective, to do the work needed to meet the 2022 pork and 2025 egg deadlines unless that work is conducted in earnest. We need a building boom in the egg and pig industries, with the old, inhumane systems gutted or knocked down — like communities do with old buildings with asbestos and other inherent safety problems — and newer, more modern, more humane systems rising in their stead.

It is important for major food retailers – in particular, Walmart, Kroger, and Safeway — to take steps today and tomorrow to build a cage-free future for animals used in agriculture. Retailers must work with egg and pig farmers to guarantee shelf space for cage- and crate-free products. That will allow the farmers to invest capital in new infrastructure.

McDonald’s has the right plan on eggs, but we are still waiting for similar report from other food sellers. Companies that passively allow these deadlines to creep up are consigning birds and pigs to cage confinement beyond 2025 and abrogating their public pledges. If they don’t begin the process now, the fault for continuing and intense animal suffering will rest with businesses that offered hollow promises and did not execute for animal welfare when it mattered most.

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