An Economic Analysis Of Commercial Egg Production PDF Download

With Animal Welfare issues are becoming more prominent in the animal agriculture community, especially with the passing of California's Proposition 2 during the November 2008 elections. This proposition, known as the Prevention of Farm Animal Cruelty Act, mandates that laying hens, pigs and veal calves have the ability to stand up, turn around and lay down without any hindrance. In response, egg producers throughout the country are questioning what impacts regulations similar to Proposition 2 will have on their industry. This concern extends even to smaller egg producing states, including Oregon. To assess the possible impacts of these regulations, should they be applied to the Oregon egg industry, it was important to first analyze the current state of Oregon's egg industry including cage, cage free and free range production, followed by estimating the change in the cost of producing eggs if the California regulations were applied to the Oregon egg industry. Once these analyses were performed the economic importance of the existing industry before and after these new regulations, was assessed through the use of the IMPLAN Pro impact analysis software. The results of the research showed that Oregon's egg industry currently ranks 17th among agriculture commodities in Oregon with approximately 2.375 million hens producing eggs in the state in large commercial production. A survey of the Oregon free range industry, an alternative to commercial egg production, found that the majority of free range flocks are small with the average flock size of around 100 hens. The cost of production for both systems was determined with a commercial cost of 61.5 cents per dozen and a free range cost of around $7.40 per dozen for variable costs including labor. When the commercial costs were adjusted to meet the possible future floor space requirements, it was estimated that the cost of commercial eggs would increase from 61.5 cents to $1.30 per dozen. When the IMPLAN analysis was run to determine the impact of the egg industry on Oregon's economy it was noted that the egg industry in its current state has an exogenous demand, demand from outside of the state, of $16.15 million as compared to the exogenous demand of $1.39 million after adjusting the production system to meet a Proposition 2 type industry in Oregon.