Pasco’s Oakdell converting to more cage-free farming

The region’s largest egg producer is taking the plunge into cage-free egg farming.

Oakdell Egg Farms is making an initial investment of nearly $1 million to house chicks and later mature hens at its north Pasco farm on East Sagemoor Road.

The company with about 1.7 million layers will deliver its first cage-free eggs by the end of the year, said Kent Woodward, president.

The investment answers a rise in demand for cage-free eggs sparked by animal rights activists pressuring grocery and restaurant buyers to improve housing.

Oakdell customers such as Kroger Corp., parent to Fred Meyer Stores, Albertsons and Costco Wholesale have publicly committed to buying only cage-free eggs.

“What we’ve tried to do in years past is produce what is requested by consumers. If this is the way it’s going to go, that’s the way we’re going to go. Reluctantly,” Woodward said.

Woodward said he’s not against improving farm conditions, but he contends without cages, chickens aren’t safer and eggs aren’t always healthier.

Cage-free trend climbing

Organic and cage-free eggs account for 8.7 percent of overall egg demand, but the figure is on the rise as institutional buyers pledge to go cage-free.

McDonald’s, citing animal welfare concerns, announced in September it would buy only cage-free eggs in the U.S. and Canada by 2025.

The restaurant chain alone buys 2 billion eggs a year and began sourcing cage-free eggs for its McMuffins and other egg-centric offerings in 2011.

Kroger, Costco and a raft of major egg buyers followed suit: Taco Bell, Royal Caribbean, Albertsons, Safeway, Trader Joe’s, Nestle, General Mills, Jack in the Box and Subway, among others.

To meet the announced demand, 40 percent of U.S. laying hens will have to be cage-free, according to research reported by the National Association of Egg Farmers.

The industry association formed in 2014 to counter the pressure on producers to convert to cage-free facilities because of safety and cost grounds.

Washington is not one of the nation’s leading producers. Iowa, Ohio and Indiana share that honor. But Oakdell is significant.

With 1.7 million layers, it is one of just 63 U.S. producers with more than a million hens. Most of the region’s grocery chains sell Oakdell eggs.

“Our target is to keep our customers happy,” Woodward said.

Cage versus cage-free

Animal rights groups such as The Humane League and American Humane Association have successfully pushed U.S. companies to buy only cage-free eggs. The movement counts several statehouse wins too. In 2015, California began requiring egg producers to offer chickens enough room to spread their wings and move around.

The Egg Farmers Association claims cage-free operations are costly, enable hen pecking and mortality, increase contamination and expose workers to ammonia and other toxins.

Ken Klippen, president, said cage-free eggs cost about 36 percent more to produce, which threatens the financial viability of the industry.

It costs about $40 per hen to convert to a cage-free system, he said.

And since chickens famously establish pecking orders, mortality rates will rise as larger groups of birds co-mingle.

Salmonella contamination is a greater threat when eggs mingle with manure, which is minimized by cages because when the egg is laid it rolls out of the cage to an automated collection system.

And cage-free operations require people to collect eggs, driving up costs.

“In a conventional cage facility, the consumer is the first to touch the egg,” he said.

A three-year study by the Coalition for Sustainable Egg Supply concluded cage-free settings do not harm workers but do increase labor and capital costs. Cannibalism and aggression increased slightly but mortality was unchanged.

But Woodward said the cage-free movement ignores decades of experience in managing egg-laying hens. Cages reduce pecking-related deaths and give growers total control over the birds’ diet and resulting in better quality eggs.

“We’re basically going back to the 1950s and forgetting everything that we’ve earned between then and now,” he said.

The debate is far from settled. A session on cage-free eggs at the Midwest Poultry Federation gathering in St. Paul, Minn., this month drew a standing-room-only crowd, according to Austin Alonzo, who reported on the event for Egg Industry Magazine.

Egg industry trends

There were roughly 300 million layers producing eggs for consumption in January, according to a U.S. Department of Agriculture census. They produced more than 6.7 billion eggs that month alone.

While Washington is not a major producer, the state’s 350 egg farms contributed $177 million to the GDP in 2014, according to USDA figures. For comparison, Washington is the leading producer of hops, a crop worth $208 million in 2014.

The Washington Department of Agriculture says eggs are the state’s 15th largest agricultural product.

Outlook

Demand for cage-free eggs isn’t the only thing rising. Overall egg consumption is growing too.

The American Egg Board, the industry’s marketing arm and author of the “Incredible Edible Egg” campaign, said the average American will consume nearly 266 eggs in 2016, up 15 eggs in five years.

The U.S. exported $337 million worth of eggs in 2014, an increase of more than 27 percent.

Yoke’s Fresh Markets, a Spokane-based grocery chain with four local stores, is taking a wait-and-see approach to cage-free eggs.

Cage-free represents about 7 percent of the eggs it sells, said John Orton, vice president for marketing and perishables.

Cage-free sales are slightly higher in the Tri-Cities, tracking with income and education levels, he said. To date, Yoke’s hasn’t seen enough retail demand to make a complete shift.

“As the consumer moves us, we move,” Orton said. “But if you go back 15 years, people didn’t even understand the term.”

This story was originally published March 25, 2016 at 5:22 PM with the headline "Pasco’s Oakdell converting to more cage-free farming."