Each year Americans eat an average of 250 eggs, and right now there is a surplus in most parts of the country because of increased production. In California, however there is a decrease in the number of eggs being laid.
Why? It could be a case of happier hens.
A law in that state titled the "Prevention of Farm Animal Cruelty Act" (also known as Prop 2) requires all eggs produced in California come from chickens "that are provided enough room to turn around and fully extend their wings". This is in sharp contrast to the "battery cages" in which many egg-laying hens live in – providing them an area smaller than a sheet of paper.
As you would expect there in an effect on hens, producers, and consumers; and not just in California. It's all part of new research from Conner Mullally of the University of Florida and Jayson Lusk of Purdue University titled "The Impact of Farm Animal Housing Restrictions on Egg Prices, Consumer Welfare, and Production in California."
"You can change the animal welfare and the treatment of animals but it's not going to be free," Mullally says. "We were able to look at how much people paid for a dozen eggs compared to some cities outside of California thanks to grocery store data."
These laws aren't stopping in California. There was an effort in the 2014 Farm Bill debate to establish federal guidelines, and since then several individual states are taking a look at enacting similar animal welfare laws.
"This is a developing story," Mullally says. "We're able to look at the impact of these laws to this point but this is the kind of thing that is likely going to have an impact over time."
This paper was recently selected to appear in the American Journal of Agricultural Economics. For more information, and to set up an interview with the author on this impactful research, please contact Jay Saunders in the AAEA Business Office.