Oreggon's eggspensive reggulations

A costly new cage-free egg law shows how the state's regulatory zeal makes living in the state less affordable

Eggs are more expensive in Oregon because a new state law requires all eggs to be from cage-free hens.

A trip to the grocery store over the last couple years has been an outrage-inducing experience. Grocery prices are high, really high, compared to what they were before our recent and current experiment with transitory inflation that is not transitory.

Egg prices have been especially volatile, and have surged recently as the egg industry deals with an outbreak of bird flu that has forced one major producer to cull nearly 2 million hens and young chickens. Fewer chickens means fewer and thus more expensive eggs.

Even without the bird flu, egg prices would be higher, today, than they were in 2021 for the same reason everything is more expensive: there are more dollars chasing the same number of eggs (and everything else) because the federal government printed money with unrivaled zeal and persistence during and following the pandemic. That’s what we call inflation.

Unfortunately, if not surprisingly, the State of Oregon stomped its webbed foot on the egg price accelerator by enacting a new, price-hiking regulation on eggs just as prices were getting out of hand. The egg regulation is a small, but instructive, example of how the state’s penchant for substituting its values for those of individual consumers makes everything more expensive in Oregon.

Back in 2019, The legislature passed, and Governor Kate Brown, signed into law SB 1019, which prohibits the sale in Oregon of eggs laid by hens who live in cages. The law just went into effect January 1, 2024. Since that date, all eggs sold commercially in Oregon must be cage-free. Anyone who shopped for eggs before that date knows that cage-free eggs are more expensive than eggs from hens who live in cages.

I talked to several industry and legislative insiders to inform this story, all of whom talked to me on the condition of anonymity due to fear the Eye of Salem (my words, not theirs) might once again turn its wilting stare, again, at eggs.

In 2011, Oregon adopted a law requiring all eggs sold in the state to come from hens who live in “colony cages,” which are larger and accommodate more hens than “battery cages,” which confine a few hens to a smaller space. Back then, animal rights groups preferred colony cages to battery cages, although more recently cages of all types have come under fire for being inhumane.

Prior to the 2019 Oregon legislative session, the Humane Society of the United States, an animal rights group based in Washington, DC, threatened to put on the Oregon ballot a ban on eggs from caged hens and fund a campaign to pass it. The threatened ballot measure would have required immediate and very costly changes to egg producers’ operations, so the egg industry cooperated with HSUS to get a less stringent bill, HB 1019, passed. That’s the cage-free egg law that went into effect January 1, 2024.

Teasing apart the price effect of the cage-free law amidst inflation and bird flu effects can be challenging, but one industry source told me the cost to comply with the new law ran about $30 per bird. As of March 21, 2024, the day I spoke with this source, the price for a dozen eggs on the west coast (Washington and California ban the sale of eggs from caged hens, too) was $3.01, versus only $2.56 in the midwest, where states allow sale of eggs from caged hens. That 45 cent per dozen difference is a reasonable approximation of the cost to consumers of Oregon’s cage free egg law, the source told me.

Forty-five cents isn’t catastrophic to many, but it represents an 18% premium consumers in Oregon pay for the privilege of buying eggs, compared to consumers in states that do not have a cage-free egg law. Some consumers are, and were before January 1, happy to pay the cage-free egg premium, but others were not. Those folks now are forced to pay the higher prices. People who would, if allowed, choose to buy eggs from caged hens in order to save 18% are, very likely on aggregate, of lower income than those that prefer to pay the cage-free premium.

Oregon’s law forced the save-money crowd to adhere to the preferences of the cage-free crowd, making groceries even more unaffordable for them than they otherwise would be. And if animal rights groups had had their way, their ballot measure would have made eggs even more expensive.

And eggs are just the beginning. In addition to regulations on the sale and production of food, Oregon adds cost to groceries and almost everything else with its obsessive focus on regulation. The state’s famous land use law makes land, which Oregonians need to do most anything including sell groceries, more expensive. Its myriad efforts to address climate change make moving anything more expensive than it otherwise would be, and groceries are heavy and need to be shipped from farm to table, as the saying goes. The benefit of all those regulations is, at best, uncertain. Everything Oregon has or could do to “address” climate change would have zero (0) impact on global temperatures. But it makes some people feel good.

It’s expensive making people feel good via regulation, and the people whose spending is affected are often the people who can least afford it. If Oregon were serious about helping low-income people afford to live here, it would more often refrain from costly new regulations.

But then, low-income egg buyers seldom make campaign contributions and never have the resources to pass a ballot measure.