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06 February 2015 - Why are Chickens Leaving California

So, why are chickens leaving California? Maybe I should broaden the question to - Why are some egg producers leaving California? Here’s the history. Seven years ago, in 2008, California voters passed Proposition 2, a law that specifies, and let me quote, “egg-laying hens must have enough room to lie down, stand up, turn around and fully extend their limbs.” Producers were given until January 1st of this year to make the change from their current smaller cages. Well, some of them have closed their businesses and moved out of California; those who stayed had to cut bird numbers because increased cage sizes take more room.

As a result of that law, eight state attorneys-general have filed a lawsuit against California because the legislature added language requiring out-of-state producers who wanted to sell eggs in the state to abide by the California law. But those state attorneys-general say that violates the Commerce Clause of the U.S. Constitution which forbids “any state from enacting any legislation that regulates conduct outside its borders, protects its own citizens from out-of-state competition or places undue burdens on interstate commerce.”

The Los Angeles Times estimates egg prices will increase between 10 and 40% at the wholesale level and even higher at retail. I have received several e-mails from consumers in California discussing the situation and one lady wrote to say she paid $6.00 a dozen last month.

So, is there an answer for consumers who don’t want to pay $6.00 a dozen, and out-of-state producers like those in Iowa who ship 30% of the eggs imported by California and don’t want to lose that market?

Michael Reagan, the son of former President Reagan and Chairman of the League of American Voters offered some thoughts and comments. “The obvious solution would be for the state to proudly mark eggs produced in luxury condominium conditions, and make this certification known to discerning egg producers within the state. They could then buy the more expensive eggs with a clear conscience, and let more callous shoppers buy the out-of-state eggs.”

That’s the answer to my opening question and it may serve as a reminder to consumers who don’t like $6.00 eggs; be careful what you ask for because the answer may contain some surprises. The final decision on the price of eggs in California may now be made in the court room.

My thoughts on Samuelson Sez.