Are Cage-Free Laws To Blame for High Egg Prices?
State laws banning caged eggs are cutting off millions from cheaper options.
America's current spike in egg prices has quickly become one of the central public policy issues of early 2025. But while the emphasis in much of the media and amongst policymakers has focused on the epidemiology patterns of the avian flu, the government itself also bears much of the responsibility for our current national egg panic.
The federal government is now forecasting that egg prices will rise by 41 percent this year—more than double the government's prior predicted annual increase that was put out just last month—and stories abound of outrageously priced eggs in grocery stores across America. Eggs in California are approaching $10 a dozen, while the national average is just under $5 a dozen.
In raw numerical terms, eggs cost 53 percent more today than they did at this time last year. But it's important to also conceptualize what that means on the ground: A family-owned café in Florida is reportedly spending $1,500 a week just on eggs—a threefold increase from last year—while chains such as Denny's and Waffle House have started implementing a surcharge for dishes made with eggs.
Most stories on soaring egg prices have concentrated on the spread of the bird flu since 2022 and whether any president can influence the price of eggs. Largely overlooked is the impact government regulations are having on the current price spike—namely, state-based "cage-free" laws that ban the sale of any eggs within state boundaries that are not laid by cage-free hens.
Since 2018, California, Massachusetts, and close to a dozen other states have adopted cage-free laws. Banning caged eggs is a classic example of a supposedly altruistic government policy resulting in detrimental unintended consequences.
Given that over 60 percent of the nation's eggs are still laid by caged hens, residents in these cage-free states are effectively cut off from two-thirds of America's egg supply. Predictably, in-state egg producers in these cage-free states have supported the laws, given that they are tantamount to sidelining the vast majority of out-of-state egg-producing competition, which in turn can allow the in-state farms to dominate local egg markets.
While cage-free mandates are obviously not the sole reason egg prices are skyrocketing, their impact can't be totally dismissed. In Royal Oak, Michigan—a cage-free mandate state—a dozen eggs went for $6.29 this past January. In comparison, just over the border in Toledo, Ohio, which has no such cage-free law, eggs could be found for under $4 a dozen.
In Nevada—also a cage-free mandate state—lawmakers were so concerned about the cage ban's impact on egg prices that they passed an amendment to their cage-free law that allows for its temporary suspension for 120 days in the event of an emergency. A study published in the American Journal of Agricultural Economics estimated that California's cage-free law would result in annual welfare losses of $72 million for Golden State households and losses of up to 18 percent of profits for the egg industry.
Cage-free laws could be viewed as justifiable if they created discernibly more humane habitats for the chickens. But as anyone who has viewed pictures of a "cage-free farm" can attest, they often consist of hordes of chickens jammed inside a large space, versus a caged farm, which consists of hordes of chickens each jammed in small individual spaces. Is one actually any better than the other? For years, terms like "free-range" and "cage-free" have been lauded as advances in humane farming, when in reality, few, if any, eggs with these designations involve chickens whimsically tromping through idyllic grass meadows, pecking at free-range bugs.
One potential development worth watching is Secretary of Agriculture Brooke Rollins' recent announcement that the Department of Agriculture under the Trump administration plans to examine "the best way to protect farmers from overly prescriptive state laws" like California's cage-free law. These state-level laws could potentially be susceptible to constitutional challenges on "dormant commerce clause" grounds, under the theory that these protectionist rules unduly burden interstate commerce. However, a recent similar case involving a protectionist pork-production law was barely upheld by the U.S. Supreme Court in a closely divided and heavily fragmented decision.
There is no doubt that the bird flu is spiking egg prices. But, as ever, the government's hands are far from clean in this scrambled mess.
