Burger King goes cage-free: What it means for egg suppliers

Here's some super-sized news in the world of food sustainability and the humane treatment of livestock. Burger King (NYSE: BKC), the world’s second-largest fast-food chain, is making changes that will dramatically affect the welfare of the millions of chickens and pigs it uses annually.

The Miami-based company is pledging to switch to 100 percent cage-free eggs by 2017 and to eliminate gestation crates for breeding pigs. While other chains already use some cage-free eggs, the news marks the first time a major U.S. fast-food chain is going completely cage-free.

“For more than a decade, Burger King Corp. has demonstrated a commitment to animal welfare,” said Jonathan Fitzpatrick, the company’s chief brand and operations officer, in a press release. “We are proud to announce these new, industry-leading commitments that support meaningful standards of humane treatment in our U.S. supply chain.”

The moves, which are supported by the Humane Society of the United States, could give cage-free farms an advantage and reduce the market for non-cage-free suppliers unless they make the switch -- especially if other large companies get on board. No word yet whether other fast-food chains might jump on the cage-free bandwagon.

But Burger King alone uses "hundreds of millions" of eggs -- and tens of millions of pounds of pork -- annually, notes The Christian Science Monitor. While that's a small portion of the 250 billion eggs produced yearly in the U.S., it's still enough to make Burger King a large egg customer and to potentially grow the cage-free-egg market. According to The Wall Street Journal, less than five percent of the nation’s 10.5 million egg-laying hens were cage-free last year.

Of course, Burger King's new goals come with some risk. Cage-free eggs, for instance, can cost an extra 25 per 40 cents per dozen to produce cage-free eggs, United Egg Producers CEO Gene Gregory told the Journal. For even just 100 million eggs, that would equal an increased production cost of at least $2.1 million (if it costs 25 cents per dozen) – and that's the cost of producing these eggs, not the price of buying them, meaning that Burger King's cost would likely be higher.

With the economies of scale on its side, though, Burger King's purchases could end up reducing the costs of producing cage-free eggs, which could in turn make it easier for other restaurants to buy them too. If that happens, of course, the market for these cage-free eggs could hatch in a big way.

Photo of chicken eggs in straw nest by Mariusz Szachowski via Shutterstock.