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United Egg Producers won’t renew MOU with Humane Society

FARGO — A major regional egg producer says he’s glad the United Egg Producers won’t renew a Memorandum of Understanding with the Humane Society of the United States, and UEP is ceasing its efforts to pursue federal legislation on national cage standards, Egg Products Inspection Act of 2013, commonly referred to as the “Egg Bill.”

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UEP announced it will be “exploring a range of options with the objective of delivering much-needed business certainty to America’s egg farmers.”

This development follows a lawsuit filed earlier this month by Missouri’s attorney general in the Eastern District of California, challenging the constitutionality of California’s new egg regulations, set to go into effect next year, which would require farmers in other states to comply with California’s requirements for cage sizes.

Amon Baer, president of Baer Brothers, Inc., of Lake Park, says he is in favor of dropping the MOU. He says the Missouri lawsuit will have big effects on the market because if those eggs can’t go to California, consumers in that state will have a shortage of eggs. The rest of the country will have a surplus and the price will drop.

In 2008, California voters on a two-to-one margin approved Proposition 2, which calls for larger cages, despite the egg industry spending millions of dollars trying to defeat the ballot measure. The law doesn’t take effect until January 2015, so consumers aren’t yet effected by it at the stores, even though it is causing turmoil in the industry.

Proposition 2 created momentum for similar state laws, usually on the ballot through initiated measures. UEP was concerned that HSUS could effectively shut down the egg business in all of those states and entered the MOU, which meant the HSUS and UEP wouldn’t attack each other as long as the UEP was working toward a federal egg bill, which is no longer a possibility.

“I think the marketplace is where the response should come from,” Baer says, noting that there are many companies preparing to provide production to meet California consumer demands, but not all should have to. “That’s more preferential than a government mandate.”

Baer and associated family operations produce enough eggs to feed about 1 million people. The markets vary, but many of those eggs supply a “good share” of what northern Minnesota, and North Dakota consumers eat, Baer acknowledges.

Consumers can’t pay

Baer says that if national federal standards had passed, the farm would have had to replace its entire egg production system by 2027, a cost of roughly $35 million. The Baer cages have 53-square-inch-per hen levels, the industry standard that breeding companies have long recommended. A UEP committee had recommended 67-square inches but didn’t recommend the style of cage.

In July 2011, the UEP agreed to a deal with HSUS that would require the phasing in period calling for “enriched colony cage systems,” with nesting areas, a scratch pad and a roosting area, and 124 square inches. The UEP agreed to that federal standard, if HSUS would oppose state law efforts to require more space than the federal standard, even though the HSUS in the past had opposed cages of any kind.

One specific cage size might not fit every region of the country, Baer says. For example, larger cages might be more cost-effective in the South where they don’t have to heat buildings. In northwest Minnesota, changing to larger cages would mean greater heating costs for raising the same number of birds and producing the same number of eggs.

Baer says that while the California consumer base might be calling for chickens to be raised in larger cages, his consumer base is concerned about egg costs.

Baer says his clientele doesn’t include large urban metropolitan areas on the coasts, where money doesn’t seem to be an object.

“There are people who can afford to pay $5 a dozen for organic eggs. In the Midwest here, there are a lot of people who can’t afford to pay $5 a dozen for eggs. They need the lowest-cost protein available if they’re going to feed their families.”