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An Economic Perspective on Caged Layer Well-Being Guidelines

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An Economic Perspective on Caged Layer Well-Being Guidelines

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    1. An Economic Perspective on Caged Layer Well-Being Guidelines Allan P. Rahn, Ph.D. Poultry Economist Michigan State University

    2. Floor and Feeder Space per Bird

    3. Cage Space Allowances in U.S. (1999 NAHMS survey)

    4. Effective Competition Nature of Commercial Egg Industry Low entry/exit barriers No firm is dominant Firms don't engage in collusion Firms are under constant pressure to reduce production costs

    5. Objective Assess the impact that the adoption of the UEP Guidelines by an autonomous producer is likely to have on white shell egg production, processing and marketing costs. - review UEP Guidelines - assess economic impacts of adoption

    6. UEP Animal Husbandry Guidelines for U.S Egg Laying Flocks (2000 Ed) Provides recommendations for: Housing and Cage Space Allowance Beak Trimming Molting Transportation and Handling

    7. UEP Housing and Space Allowance Recommendations

    8. UEP Housing and Space Allowance Recommendations

    9. UEP Beak Trimming Recommendations

    10. UEP Beak Trimming Recommendations

    11. UEP Molting Recommendations

    12. UEP Molting Recommendations involving feed withdrawal

    13. UEP Handling, Transport & Slaughter Recommendations

    14. UEP Handling, Transport & Slaughter Recommendations

    15. UEP Cage Stocking Density "Phase-In" Plan guidelines (initial)

    16. UEP Cage Stocking Density "Phase-In" guidelines for certification

    17. Other UEP “certified” status requirements

    18. Economic Impacts of Guidelines Adoption Analysis focus: -If the Guidelines recommendations are adopted, what additional receipts per dozen eggs –i.e. price premium– will be required to generate the same net receipts per 1,000 ft2 of cage space over time as prior to their adoption?

    25. Production Cost Items Feed Hen Labor Maintenance & Repair Utilities Facility Amortization Insurance Administration & Services Pullet Interest Working Capital Interest Other

    26. Processing and Marketing Cost Items Operating (fixed) and Administration Operating (variable) Carton Distribution or Delivery Grade, Yield and Size Loss Market Allowance Certification Other

    34. Conclusions As cage space allowances are increased progressively from 48 to 53,56,59,61,64 and 67 in2 per bird, white shell egg production, processing and marketing costs are projected to increase, respectively, 1.6, 2.6, 3.5, 4.1, 5.0 and 5.9 cents per dozen. Net receipts per 1000 ft2 of cage space over time breakeven price premiums increase absolutely with cage space allowances and relatively as egg prices to retailers increase. Net receipts per 1000 ft2 of cage space over time breakeven price premiums increase absolutely with cage space allowances but decrease relatively as feed and pullet prices increase.

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