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USA: McDonald’s cage-free eggs’ impact on market

A THIRD of eggs in McDonald’s American supply chain are now produced in cage-free systems, the company has said.

It first announced a transition to cage free in September 2015 with a target of 2025 for the conversion. In the US, the restaurant uses some two billion eggs a year – the equivalent to almost 2% of the entire country’s annual production.

And the announcement had a huge impact on the market, with more than 200 other food businesses announcing they too would stop sourcing eggs from caged hens.

The replacement system McDonald’s is employing is aviary-style barn sheds, according to supplier Peter Forsman.

Today, according to the USDA, 61 million birds are in cage-free systems and the price differential between conventional caged egg and cage free has dropped from about $1.80/doz at the beginning of 2017 to $0.81/doz late last year, according to Bloomberg.

Cargill, too, said strong demand for its eggs in the US had put a shine on its fiscal Q3 results, which were posted in March. It is the sole egg supplier to McDonalds in the States.

“McDonald’s works hard to know its supply chain well and understand the challenges producers face,” says Kristin Tupa, egg sustainability lead at Cargill. “This is important because together we are literally creating the supply of cage-free eggs.”

“The supply-and-demand equation will change such that pricing will go down,” Marion Gross, head of supply chain at McDonald’s in the US told Bloomberg. “More people will be able to afford cage-free eggs.”