Egg farmers face uncertainty as deadline looms

When Sonoma County egg farmer Arnie Riebli looks to the future, one date looms particularly heavy on his mind: Jan. 1, 2015.

"That's when the other shoe is going to drop," he said, referring to the deadline for complying with Proposition 2, which places new mandates on how California egg farmers may house their hens.

For Riebli, the first shoe dropped in 2008, when California voters approved the initiative. Since then, producers have tried unsuccessfully through several legislative and legal efforts to clarify what the law requires.

Proposition 2 prohibits specific farm animals, including egg-laying hens, from being confined in a way that prevents them from being able "to turn around freely, lie down, stand up and fully extend their limbs" without touching the enclosure.

But producers have maintained the language in the law is so vague that they don't know how much space they need to provide their hens in order to comply. Now, with less than 16 months left to sort it out, many of them are scrambling to make changes to their operations, with many unknowns plaguing their decisions.

"My guess is that different people are going to try to comply in different ways," said Riebli, who produces both conventional and specialty eggs and is president of the Association of California Egg Farmers.

He said some farmers will probably update their barns to provide more space for their birds; some will go cage-free, while others will simply go out of business. He and others predict California egg production could be reduced by half when Proposition 2 takes effect.

On his own farm, Riebli has been renovating barns for the last two years, replacing some with cage-free systems.

He also plans to build what's known as enriched colony housing systems, which are widely used in Europe and provide larger enclosures with features such as perches, nesting boxes and scratching areas.

For now, his plans for the enriched systems are on hold because of another unknown: The fate of a federal farm bill amendment introduced by Republican Rep. Steve King of Iowa—the nation's largest egg-producing state—that would prevent states from imposing their own standards on food production. The amendment would nullify 2010 California legislation that requires eggs sold in the state to conform to Proposition 2 standards, therefore allowing California farmers to compete fairly with out-of-state eggs.

Riebli said if the King amendment becomes law, then it doesn't make sense for him to invest the money on the enriched housing, even though there is currently a general consensus among U.S. egg farmers that these systems will become the norm in the future.

United Egg Producers came to an agreement with the Humane Society of the United States, which sponsored Proposition 2, to back federal legislation that would make the enriched colony systems a nationwide standard, allowing U.S. farms 15 to 16 years to complete the transition; California farms would still have to comply with Proposition 2 by 2015.

California farmers say HSUS has sent mixed messages about Proposition 2 requirements, at times saying only cage-free systems are acceptable but then agreeing to the enriched colony systems in the proposed federal legislation.

JS West in Modesto, a plaintiff in the lawsuit seeking clarification, built two new facilities with the enriched units in 2010. Jill Benson, JS West vice president, noted that U.S. producers who have built new facilities in recent years have opted for enriched housing or "enrichable" systems that could easily accommodate the additional furnishings at a later date.

She noted that JS West is now remodeling its existing barns with enrichable housing that would be big enough to accommodate the bird behaviors that Proposition 2 mandates.

"As far as I'm concerned, we would be in compliance," Benson said, but noted that JS West hen numbers are expected to shrink from 1.8 million to 1.2 million when the renovations are complete.

Like Riebli, San Joaquin County egg farmer Richard Jenkins also is remodeling some existing barns and putting in cage-free systems to double his organic production, "because we know that is legal no matter what," he said.

Jenkins said he also hopes to finish building "what we deem as Prop. 2-compliant" facilities by the end of 2014. These new facilities, he said, will replace the production of three farms that had been supplying eggs to his company but are now closing due to financial challenges associated with Proposition 2 compliance.

"Prop. 2 was supposed to help the family farm, but it's doing the exact opposite," Jenkins said. "With what we're spending on these systems and what you get paid for your egg, it's hard for the little guy to stay in anymore."

Peter Schue, another San Joaquin County farmer, said he has not started construction on his facilities because he hopes to receive more clarification on what type of system would be considered compliant.

"It would not be very wise to put up a new system today without knowing what would actually work," he said. "I'm not going to invest a couple of million dollars in new equipment and buildings if I don't know what to put in."

(Ching Lee is an assistant editor of Ag Alert. She may be contacted at clee@cfbf.com.)