California Proposition 2 (2008) - Economic Effects

Economic Effects

In July 2008 the University of California, Davis conducted a study through their University of California Agricultural Issues Center (AIC). The study concluded that "the best evidence from a variety of sources suggests that (non-organic) non-cage systems incur costs of production that are at least 20 percent higher than the common cage housing systems". This is due to higher feed costs, higher hen laying mortality, higher direct housing costs, and higher labor costs. The study also estimated that almost the entire California egg industry would relocate to other states during the 5-year adjustment period. The study does not analyze implications for animal welfare. By demonstrating that most egg producers would leave the state, the report estimates that the initiative would not affect how eggs are produced, only where eggs are produced.

A study done by Don Bell of the University of California, Riverside estimated that eliminating battery cages for egg-laying hens will result in increased production costs of less than one cent per egg, and a recent economic study co-authored by former California finance director Tim Gage predicted, "Under Prop 2, consumers purchasing conventional eggs will likely see no change in price; consumers preferring California grown eggs could see around a penny per egg increase in cost; while those preferring cage-free eggs will see a drop in cost with a new California provider."

According to a May 2008 study by Promar International and commissioned by opponents to Prop. 2, 95% of the California $648 million egg industry and accompanying economic output would be lost by 2015, including equally significant loss of the three and half thousand jobs the egg industry employs. The study also stated that egg production costs would increase by 76%.