Search results

This case was primarily researched using academic research papers, industry reports (Egg Industry Center and others), and finance databases including Standard and Poor’s Capital IQ. Regarding the cost and investment budgets, the case relies mainly on an experiment conducted by the Coalition for Sustainable Egg Supply, updated by the authors of this case.

Eggs produced by cage-free birds, while more expensive than conventionally produced eggs, are gaining in popularity among consumers who want only eggs that are produced more humanely. A number of major distributors, including Whole Foods, McDonalds and Starbucks have pledged to sell only cage-free produced eggs by 2025. Several states including California, Oregon and Michigan have passed laws limiting conventional egg production. The case provides costs and industry information and needed to project free cash flows and risk-adjusted opportunity cost of capital and perform break-even capital budgeting analysis of the two egg production alternatives.

This case is appropriate for graduate corporate finance courses. It is particularly appropriate for agribusiness finance courses. A preliminary exercise was used during the fall 2018 in a land grant university, just after the “Prevention of Cruelty to Farm Animals Act,” also known as Proposition 12, was passed in California in favor of cage-free egg production. The exercise was revised and used in the fall 2019 in the same class. This extended version of the case, was classroom tested in the fall 2020 in an agribusiness finance graduate class, with agricultural economics and business students enrolled.

The food industry is faced by a crisis – perhaps sooner than had been feared. The evidence of widespread salmonella among poultry, it is argued, is a warning. It is suggested that two ways of avoiding the problem would be for the up‐market sector of the food industry to buy free‐range eggs only, and for it to demand that all the eggs it buys come from birds which have been fed with proteins other than pieces of dead animals.

The Board of Agriculture, by virtue of the powers conferred upon them by the Sale of Food and Drugs Act, 1899, have made regulations whereby it may be presumed, until the contrary is proved, that milk containing less than 8·5 per cent. of solids‐not‐fat, or less than 3 per cent of fat, is adulterated within the meaning of the Act. The suggested limit for fat in milk recommended by the special committee appointed by the Board of Agriculture was 3·per cent., and it will therefore be observed that the new regulations have fixed a standard for milk‐fat which is even lower than the low limit recommended by the committee. There are even rumours that a further lowering of this standard is to bo urged upon the authorities. Although from the point of view of Public Analysts and the officials responsible for the enforcement of the Food and Drugs Acts it is satisfactory that an official standard for the composition of milk has at last been set up, it is idle to suppose that the fixing of such a limit will materially improve the character of the milk‐supply as a whole. It should be remembered that milk which contains only 3 per cent of fat, although under the new regulations legally “genuine,” is, as a matter of fact, of the poorest quality, and is only produced by a cow when in bad condition, or by a particular breed of cow which is remarkable more for the quantity than for the quality of the fluid yielded. Producers and vendors of milk of good quality have been placed in a very unfortunate position by the new regulations, as the tendency of the trade will be to lower all milk to the official limits, with the result that those dealers who are still desirous of maintaining a high standard of quality will have to compete in the matter of price with less conscientious traders, who, taking advantage of the protection afforded by the regulations, will be enabled to sell to the public “genuine” milk, from which all “superfluous” fat has been removed. Gradation of quality in an article of food cannot, of course, be provided for by official regulation, and for the purpose of legal classification it is only possible to differentiate between legally “genuine” and adulterated articles. Therefore, in a legal sense, and also in a popular sense, a milk containing 4 per cent. of fat is no more “ genuine ” than one containing 3 per cent., although the former is, of course, a superior article. Competition in the dairy trade, which has of late years become very keen, will, as the result of the fixing of this standard, become more acute than before, and to keep their position it will be necessary for those milk‐vendors who are desirous of maintaining their reputation as vendors of milk of good quality to give to their customers some guarantee that their product is indeed superior to the legalised article. Any statements of the traders themselves upon this point will naturally be received by customers with reserve, as proceeding from an interested source, and the guarantee, to be effective, must therefore be given by an authority whose statements are above suspicion. It is hero that the system of Control will be found to be a necessity both to the milk dealer and milk consumer.

Greater attention to and anxiety about farm animal welfare emerged at the end of the 20th century, as worries over food safety and food quality (connected to the BSE, FMD, avian influenza and other epidemics) pushed farm animal welfare into public discourse and political debate. This chapter looks at one of the ways in which consumers’ concerns and anxieties about animal welfare are addressed by the Soil Association (the United Kingdom), whose standard is based on a scheme of production that endorses animals’ natural life in the case of certification of organic eggs in the United Kingdom. Drawing on STS approaches it addresses the processes of producing ‘naturalness’ as food ‘attribute’ (to borrow from economics) and how ‘the natural life of hens’ is achieved in the context of eggs’ production.

The purpose of this paper is to understand which factors and resources free-range egg consumers believe are important for hen welfare.

An online survey was distributed via the mailing list of a UK free-range egg brand receiving 6,378 responses. The survey was mostly five-point Likert-scale based. The same survey was also distributed to a group of animal welfare specialists receiving 34 responses.

Respondents bought free-range eggs because hens are “happier” (74.2 per cent) and “healthier” (69.0 per cent) and because they believed such eggs to taste better (57.9 per cent). They rated all the suggested factors that might contribute to hen welfare as “important” or “very important” (on average) but believed outside access and fresh air to be most important. Respondents rated the suitability of resources relating to behavioural needs high (“suitable” or “very suitable”) indoors and shelter as the most suitable outdoors. Consumers differed from welfare specialists in their views on factors contributing to hen welfare, but their views on resource suitability were similar.

The sample was biased towards free-range egg consumers who had expressed an interest in a brand marketed as high welfare.

This is the first study to ask consumers what they consider to be important for hen welfare and how they think hen welfare can be improved. Because consumers can affect on-farm welfare through their purchasing habits assessing the degree of agreement between consumers and animal welfare specialists is important.

Since 2010, Swiss slaughterhouses have no longer accepted end-of-lay chickens, so egg producers have had to slaughter the animals on the farm and deliver them to biogas plants for gasification. However, the producers’ association, GalloCircle, has recently contracted a German slaughterhouse to process end-of-lay chickens into meat. As a consequence, an increasing number of these animals are now transported abroad. The purpose of this paper is to compare the two chains from a utilitarian perspective.

An interview with a central actor is analyzed by objective hermeneutics. In addition, a utilitarian comparison of the two chains is carried out.

The interview with a core stakeholder reveals that he considers this to be worse for both the animals and the farmers. The system change has been motivated by the (either merely perceived or actual) ethical preferences of consumers. The authors ethical evaluation of the system change shows, however, that highly controversial assumptions would need to be made in order to justify it. The authors doubt that the (alleged) consumer preferences are based on a proper ethical analysis of the two options.

The authors make a case for rationally reconsidering the choice of sending the chickens abroad.

The paper shows that utilitarian analysis is useful to consciously choose between different value chains.

This study investigates UK consumers’ perception and willingness to pay (WTP) for egg attributes associated with laying hen welfare, namely with beak-trimming practices and injurious feather pecking (IP). The aim is to examine any change in WTP after improved consumer awareness.

Building upon existing literature, the authors designed an online survey in which the method of discrete choice experiment (DCE) was employed. The study includes two identical DCEs with the second being introduced after respondents were presented with an educational excerpt about beak-trimming practices, on farm IP occurrence and the docile nature of white egg laying hens – reducing IP.

The mixed logit regression model demonstrated that consumers' WTP for egg attributes associated with beak trimming and IP decreased in the second DCE (12.6% for organic and 2.55% for free-range). For eggshell colour, the analysis revealed a shift from a preference to brown eggs to indifference between eggshell colours.

Overall, UK consumers have a preference in higher hen welfare resulting in a decrease in WTP once they are aware of welfare losses in current systems; however, more insights are required in terms of the promotion of white shelled eggs as a means of reducing IP on UK farms.

Through the energetic initiative of “The Globe” newspaper a Middle Classes Union has been formed for the purpose of organising that great body of people into an Alliance that shall be capable of making its power felt. A preliminary meeting was held recently under the presidency of Major J. R. Pretyman Newman, M.P., of gentlemen interested in the scheme recently outlined in “The Globe” for combining the Middle Classes in a Union for their own protection. All present were unanimous as to the necessity for the formation of such an organisation, and after discussion it was provisionally agreed that its title should be—

This research shows how the perception of quality differs through the table egg chain and highlights the main quality characteristics for each studied chain participant (farm, retail, consumer).

Observing the change in perception starts from the farm, through retail to the end consumer using the customer–supplier interaction, while looking back from the consumer to the farm, the application of the quality function deployment (QFD) was used. The study included 30 farms, 50 retail stores, 1,000 customers and 300 households.

The farm–retail comparison highlights the type of production as the dominant factor affecting egg quality for both of these participants, followed by hen diet and the type of laying hen hybrid from the farmer's point of view, while retail focuses on packaging and egg damage. Egg quality aspects from the retail–household perspective emphasize the shell appearance and the origin of the eggs, while shelf life and egg class are equally important characteristics for both participants. The application of the QFD throughout the entire egg chain emphasizes quality vs price as the most important characteristic.

This study could serve to food policy makers as an introduction to further research and production orientation in relation to the set of quality requirements associated with the egg supply chain.