Matching supply and demand for cage-free eggs in Asia
Dozens of food retail and hospitality companies in Asia made commitments to source cage-free eggs 5 years ago. Now, the deadline looms, as the transition needs to be completed by the end of 2025. Singapore-based Global Food Partners CEO Elissa Lane drives the initiative to match the supply and demand of cage-free eggs with the help of a cage-free credit system.
Asia, which is the world’s largest egg-producing region, is responsible for 64% of global egg production. Most producers focus on food availability and thus affordable production. Egg production in caged systems is still the norm, but change is in the air.
Many large corporations pledged to switch to cage-free eggs and cage-free egg products. Unilever, Ikea, Hilton, Sodexo and dozens of similar companies committed to a deadline by the end of 2025, while others have a horizon further away and want to change over by 2030 or 2035.
To meet the demand for cage-free eggs, producers all across Asia are gearing up production. That said, the market is dynamic, and supply and demand do not always match, either in volume or in geography.
A cage-free credit system, introduced by Global Food Partners, brings a solution that benefits both farmers and food companies. Poultry World spoke to Global Food Partners CEO Elissa Lane, who is driving an interesting initiative.
How do you see cage-free production developing right now?
Many egg producers see opportunities in switching to cage-free production and/or are in the process of doing so. One such example is Nguyen Gia Livestock Production Cooperative, one of North Vietnam’s largest egg producers that is spearheading the country’s largest transition from caged to cage-free egg production. Global Food Partners collaborated with them and other stakeholders from across the food industry to transition to 100% cage-free operations, beginning with a flock of approximately 50,000 laying hens.
A 3,000-hen training centre in Indonesia serves as a model farm for cage-free producers, as well as a research and development facility.”
What challenges do you see in production?
‘Cage-free production is different from caged production. It can be a disaster if good management isn’t in place. It’s not enough to simply rip out the cages. In the past we learned from the EU and implemented what we had learned in Asia. Nowadays, we have our own tailored approach with demo farms in the region.
As part of our partnership, the Global Food Partners’ Science and Extension team provides hands-on technical training and guidance, enabling farms to adopt high-welfare farming practices, retrofit existing facilities, implement effective cage-free management and achieve international welfare certification. Our training centre, a 3,000-hen farm in Indonesia, offers training in best practices in cage-free management and production and also serves as a model farm for cage-free producers, as well as a research and development facility.
How does supply meet demand?
Asia is an enormous region, and it is difficult to get supply to meet demand locally. That is why we implemented the world’s first egg credit trading scheme. This cage-free credit system separates the egg from its welfare claim and allows food and hospitality businesses to offset their use of conventional or caged eggs by buying certificates of cage-free eggs instead.
With the premium price the producer gets for the certificates, the food companies are supporting the current and future investments that local farmers make in higher-welfare certified cage-free production in their countries.
How does this work in practice?
The scheme takes a 2-prong approach. Firstly, food companies can purchase certified, physical cage-free eggs directly from the farm. Secondly, businesses can meet their cage-free commitments by purchasing so-called Impact Incentives, which are cage-free credits that directly support cage-free production and transition. For this second approach, the food business continues to supply conventional eggs but pays for the cage-free certificates. As there is a separation between the egg and the welfare claim, the cage-free eggs produced on the farm need to be physically sold as conventional eggs at a lower price, but the farmer gets the premium via the cage-free certificates.
Animal welfare advocacy groups are on board.”
What are the benefits of this system?
With the deadline for the cage-free goals approaching, the food companies feel the pressure to step up. That means demand is strong. However, for a farmer in the vast expanse of Asia, it can be daunting to make the huge investments in cage-free production without having access to a buyer. With the certificates there is no longer a need for physical trade, but it does ensure a 20-40% premium for cage-free eggs, no matter how you sell them or where you produce them. There is also a benefit for food companies: they can source their eggs locally, which saves on logistic costs, claim support for cage-free production in the region and fulfil their cage-free commitment, via certificates bought in another region or even another country in Asia. Animal welfare advocacy groups are on board with this system too.
What is your outlook on the future?
‘’In our conversations with food companies, we hear that they prefer physical delivery of cage-free eggs. We are indeed encouraging them to buy physical cage-free eggs wherever possible, but for the time being our credits fill a need. Ideally, there will be a shift toward cage-free eggs within the next 3-5 years, as more egg producers recognise the benefits of transitioning and making cage-free eggs available in the regions where food businesses operate. The good news is that with the help of our impact incentives, we are already seeing farmers confidently going cage-free and the positive impact on animal welfare that comes with it.
Join 31,000+ subscribers
Subscribe to our newsletter to stay updated about all the need-to-know content in the poultry sector, three times a week.
