Too Chicken for Competition

Based on the actions of Iowa legislators, one would think that there is a shortage of conventional eggs being sold in the state of Iowa.

Both houses of Iowa’s legislature passed a law requiring any grocer or retailer to sell conventional eggs if he participates in the Women, Infants and Children (WIC) supplemental food assistance program and offers “specialty eggs.” “Specialty eggs” are defined as eggs from chickens that are raised in a free-range, cage-free, or “enriched colony cage” environment.

The justification for the law is that conventional eggs are generally less expensive than specialty eggs, as they cost less to produce. Yet this justification seems to suggest that WIC recipients are struggling to find grocery stores that sell inexpensive eggs — unlikely given that Iowa is the largest egg producer in the nation, with more than 20 million more hens than the number two state, Indiana.

What this regulation amounts to is a direct interference by the Iowa legislature in the market. The legislation is not aimed at protecting the health of the roughly 70,000 WIC recipients in the state of Iowa. Regulations on the eligibility of foods for the WIC program are generally based on the health benefits of the food. While debate continues on whether specialty eggs are healthier than conventional eggs, there is no evidence that conventional eggs are the healthier option. Instead, the poultry industry is pushing to ensure that conventional eggs be required in all of the 651 grocery stores in the state of Iowa that participate in the WIC program.

This law would also put a legislative hurdle in the way of growth in the specialty egg industry, which has seen a marked increase in recent years. Responding to public pressure to create more humane conditions for hens, more than 100 retailers and 60 restaurant chains have committed to transition to cage-free eggs over the next ten years. As demand for cage-free eggs from retailers grows, the need of the specialty egg industry to expand will increase, reducing prices.

Laws such as this would limit the chance for this natural competition to take place, forcing Iowa grocers to stick to conventional eggs for the foreseeable future. Many Americans still prefer the cheaper option, and will continue to purchase conventional eggs as long as they are less expensive. The conventional egg industry does not need this protection — it simply fears the growth of the specialty egg industry and wants to act quickly before specialty egg makers have the political muscle to fight back.

One need not have any particular concern for the welfare of chickens to defend the free market. Consumers should be allowed to choose which type of egg they prefer by voting with their wallets. Iowa in particular will have no problem offering inexpensive eggs for the foreseeable future, and does not need anti-competitive regulation such as this protecting its egg industry. A large and entrenched industry such as Iowa egg producers should have no problem competing in the market — unless they’re too chicken.

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