Cost To Convert To Cage-Free
From the July 21, 2005 issue of United Voices, the United Egg Producers Newsletter
In the last issue of United Voices we wrote about converting all cage layer houses to cage-free floor houses. This prompted emails and calls asking what the cost would be. So, while saying that there are probably many variables and many options for housing styles, and the fact that some producers could simply return to conditions of the 1950s while others would build very modern equipped houses, we will attempt to give some estimates of costs. To arrive at these assumed estimates, we solicited information from a few sources. Here is what we have come up with.
To convert a layer house to a cage-free floor house will first require the removing and disposal of existing cage equipment. In addition to the cost of removing the equipment, we have the problem of finding landfills or other burial sites to dispose of the equipment. Now we begin with new equipment for a cage-free floor system and our estimate of cost to remove the old equipment and install new equipment would be about $4.50 per layer based upon estimates from an equipment company.
Starting from the cage house measuring 50 ft. x 500 feet and once holding 100,000 layers we convert that to a cage-free floor system providing 1.2 square feet per layer. This house will then accommodate 20,833 layers. The cost to convert this house is about $94,000.00. If we assume that we currently have 2,800 existing cage houses, the industry cost would be about $263 million. If no new buildings are built, the industry has only 58,333,000 layers to supply the market.
In order to supply the market with the same number of eggs as when all birds were in cages, we will need to build 10,640 new houses of 20,833 layers each. Depending upon the style of house built and equipment installed in a new cage-free floor house, we learned that the costs could likely vary from about $12.00 per bird up to $25.00 per bird. For the sake of being conservative, let's use the low side of this range because producers tend to look for the least costs opportunities. Using the $12.00 per bird we have a total cost of $250,000.00 for each building holding 20,833 hens. These new buildings will then cost the industry about $2.7 billion. If, the industry decided to build the very best of housing and equipment, then the cost rises to about $5.5 billion. Now comes the problem of getting building permits for 10,640 new buildings.
If our calculations are reasonably correct, and depending upon the style of housing and equipment, then we estimate an industry cost to vary from $3 to $5.8 billion in building and equipment costs to convert to a cage-free floor production system. In reality, the industry would build larger buildings and reduce the per bird cost.
The animal activists then become concerned with birds being kept in confined spaces with no access to outdoors. We then provide openings in the buildings to allow birds to go outside. Following the EU standards, we will need to provide one acre of land area for each 400 birds. Your 20,833 size layer house now needs an additional 52 acres of pasture for the hens to roam freely. Depending on where you live, we could have an average land cost of $100,000.00 per house or $4.80 per layer. Then consider that 52 acres is needed for each of the 13,440 houses and we have nearly 700,000 acres that likely were once in crop production. Let's assume that the average size of a farm is 500 acres. If so, then we take 1,400 farms out of crop production.
You think none of this is possible. Then consider just how quickly things have and are changing in Europe.
The animal activists ultimate goal is to eliminate all animal agriculture production so to meet their desires you eventually discontinue the use of all layer houses. Good luck.