Is California Egg Law the Wave of the Future for Farming?
A recent Business Week article highlighted the current California law regarding the amount of area that chickens are required to have in order for producers to sell eggs into California. The law was passed a couple of years back requiring at least 116 squares inches of space for each laying hen which was almost a 73% increase from the old industry standard of 67 square inches. The original law mandated this only for California producers, however, it was updated to mandate these changes for any producer shipping eggs into California as of the beginning of 2015.
Although these changes will add costs to the producer, it is expected that most of these costs will be ultimately borne by the consumer and there appears to be some possible “excess” profits that will be earned by the producers early in 2015. Other changes similar to this provision have been tried in several other states and so far farm organizations have been able to defeat the measures. However, the consumer continues to want more “natural” food and the perception in many cases is more important than the reality.
It may not pay to fight it in the future.
Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a principal with CliftonLarsonAllen in Walla Walla, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. Paul and his wife purchase an 180 acre ranch in 2016 and enjoy keeping it full of animals.
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