Why eggs have gotten more expensive in California

How big an impact has the new California law that reduced crowding in henhouses had on the state’s chicken farmers? New statistics from the U.S. Department of Agriculture show that the state’s egg production has dropped by 20% over last year, with the number of laying hens falling by roughly the same amount.

Egg prices in the state have skyrocketed this spring, partly as a result of the drop in production, though they are also being affected by a devastating outbreak of avian influenza in the Midwest.

According the USDA’s Pacific Region Poultry Report released this week, California chickens produced about 311 million eggs in April, down nine million from March and down 78 million from April 2014. The number of laying hens was about 13 million, down from 16.7 million at this time last year.

The decline in numbers coincides with the implementation in January of new rules increasing the amount of space layers must be allowed in henhouses. These new humane requirements are the result of Proposition 2, passed by voters in 2008.

It also reflects rising costs in feed due to the state’s continued drought, says John Segale, a spokesperson for the Assn. of California Egg Farmers.

“On the one hand, we’re rolling into implementation of the Prop. 2 regulations this year. And then we’ve got the drought and the impacts of water cuts. Everybody’s bills are going higher and because of that people are making some changes. It’s been a double whammy.”

The average price of a dozen large eggs in California in May increased 71% since April, to an average of $3.03. Nationally, the average price stood at $2.62, up 120% since April.

California prices could go much higher, National Assn. of Egg Farmers president Ken Klippen told Bloomberg.

“When the California egg law went into effect Jan. 1, mandating enclosure sizes for laying hens, the national large white egg prices were $0.82 to 1.04 per dozen. In California, egg prices were $2.75 to 3.30 per dozen,” Klippen said. “With national prices approximating $3 per dozen, expect California egg prices to be closer to $5 per dozen.”

The Midwest, which produces the bulk of eggs laid in America, has been hit hard by an avian influenza epidemic, which has reduced flocks by more than 47 million this winter. Iowa, the largest single producing state, has lost 30 million birds.

The epidemic has largely missed California, though the state’s flocks have declined by an even greater percentage, largely due to farmers reducing flocks to meet the new space requirements.

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