DEPARTMENT OF FOOD AND AGRICULTURE 
PROPOSED CHANGES IN THE REGULATIONS 
Title 3. Food and Agriculture 
Division 3. Economics 
Chapter 1. Fruit and Vegetable Standardization 
Subchapter 3. Eggs 
Section 1354. Marking Requirements 
INITIAL STATEMENT OF REASONS 
The California Department of Food and Agriculture (the Department) proposes to amend 
the California Code of Regulations (3 CCR), Title 3, Division 3, section 1354. 
PROBLEM STATEMENT 
The Department’s Egg Safety and Quality Management (ESQM) Progr am is responsible 
for the regulatory authority for shell eggs and egg products produced, shipped, or sold in 
California. They review package labeling to ensure it is truthful and in compliance with 
marking requirements. Pursuant to Food and Agricultural Co de Section 27521, ESQM 
ensures eggs have been properly handled, labeled, transported, refrigerated; and are 
wholesome and safe to eat. 
California Consumers make purchasing choices based on labels such as “Organic” or 
“Cage Free”. While the former has cle ar standards that assure truth in labeling , the latter 
does not. California consumers expect that “Cage Free” means something and is not a 
nebulous statement that creates perceived value. The ambiguity around this term is 
becoming increasingly important as sales in California shift to eggs from housing th at can 
be described as “cage free.” When the label says “cage free,” consumers expect it to 
mean something in particular and be truthful. 
The market for “Cage Free” eggs drives a higher price, in many cases. In general, a cage 
free egg is more expensive to produce than conventional cages. Total operating costs in 
the cage free aviary system were 23% higher than conventional cages. In between 
conventional cages and cage free is what the industry refers to as Enriched Colony Cage. 
An Enriched Colony cage houses a larger number of birds in confinement but does not 
adhere to the definition of cage free. This leads to producers labeling their egg s as cage 
free when in fact they are not. While the operating costs of the enriched colony were 
slightly higher (4%) than conventional cages, the correlating costs are not equal to a true 
cage free operation. Therefore, it creates the opportunity for eggs from Enriched Colony 
Cages to be sold as cage free at cage free prices. Current USDA Egg Market data shows 
cage free egg prices at an average range of 111% -125% more expensive. This gap 
increases greatly if they are organic cage free (295% -342%). The h igher value of a “Cage 
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 Free” carton of eggs opens the door to labeling eggs as “Cage Free” when they aren’t in 
fact cage free and could result in an unfair market. 
In fiscal year 2019 / 2020 ESQM formed a labeling claim focused workgroup that 
investigated labeling claims such as “Omega 3’s” and “lower saturated fat”, “Choline”, and 
enclosure type statements. In order to ensure a fair marketplace, and provide consumer 
clarity, clearly defined parameters and definitions are necessary. ESQM does not have a 
regulatory avenue to determine whether egg firms are raising their animals in a “cage 
free” environment . 
Beginning in 2015 there has been a gradual industry progression to provide the market 
with “Cage free” options. Over time California Consumers have dictated their desire to 
prioritize animal welfare when consuming animal products. This was reflected in the 2018 
general election when California voted in favor of Proposition 12 which required that 
certain animal species be confinement free by 2022. This can further be extrapolated to 
reflect that California Consumers make purchasing choices based on the humane raising 
of animals , and labeling statements are how consumers are able to make that 
determination. Additionally, the industry at large supports codify ing an industry standard 
definition of “Cage Free”. On April 21, 2021 the Shell Egg Advisory Committee voted 
unanimously in favor of the definition proffered in this rulemaking . 
Cage Free has been interpreted differently across industry and among consumers. There 
are a wide variety of housing types and styles across the Shell Egg industry. In order to 
provide clarity to the industry, as well as consumers, there is a clear need for the 
Department to provide minimum requirements for use of the term, “Cage Free”. Labeling 
regulations cannot be enforced without minimum requirements established in regulation. 
PURPOSE 
This regulatory action is intended to provide a definition of “cage free” to ensure that eggs 
labelled cage free meet the minimum standards in the definition. Defining cage free and 
establishing minimum requirements ensures that the consumers of California are 
purchasing eggs that are being ma rketed fairly and equitably. Promulgating regulations 
which align and interpret changed market demands and label statement is determined to 
be the most effective mechanism to protect and promote the fair and equitable marketing 
of shell eggs in California. 
BENEFITS 
Consumers of California will be assured that when they purchase eggs that are labeled 
“cage free” that they meet the minimum standards outlined in the cage free definition. 
Producers will have a consistent standard applied equally across the in dustry for eggs 
sold to California consumers. 
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  SPECIFIC PURPOSE AND RATIONALE FOR EACH SECTION, PER GOVERNMENT 
CODE 11346.2(b)(1): 
1354. Marking Requirements. 
Subsection 1354(d)(3)(A), (d)(3)(B), (d)(3)(C) are adopted to specify the minimum 
standards that must be met in order to label consumer containers with the term “cage 
free”. 
1354(d)(3)(A) specifies the enclosure space required for laying hens , to meet the 
definition of “Cage Free”, in two different cage free system types . 1 (one) square foot per 
bird in a multi -tiered aviary or partially slatted system and 1.5 (one point five) square feet 
per bird for egg laying hens in a single -level all -litter floor system. This will ensure 
adequate space for hens to move naturally and safely in their space . 
1354 (d)(3)(B) specifies the movement allowances and housing enrichments that an 
enclosure must have to meet the definition of “cage free”. This allows for external walls 
to keep hens saf e from predators and inclement weather and still practice their natural 
behaviors like perching, scratching, dust bathing, etc. 
1354(d)(3)(C) requires that farm employees must be able to stand -up in the laying hen’s 
enclosure while providing them care, to meet the definition of “cage free”. This will ensure 
a safe and comfortable work environment for hens while employees are providing care . 
TECHNICAL, THEORETICAL, AND/OR EMPIRICAL STUDY, REPORTS, OR 
DOCUMENTS 
• Lewis, Tara . “Free Range or Free Reign? False Advertising in the Egg Industry ”. 
2017 
• USDA “Egg Market News Report” June 16, 2021. 
▪https://www.ams.usda.gov/mnreports/pybshellegg.pdf 
• General Election – Statement of Vote , November 6,2018. 
▪www.sos.ca.gov/elections 
• Shell Egg Advisory Committee (SEAC) Meeting Minutes. April 21st, 2021 
ECONOMIC IMPACT ASSESSMENTS /ANALYSIS 
In accordance with Government Code §11346.3(b), the Department has made the initial 
determination that the proposed regulations would not have an impact on the general 
public or protection of public health and safety; the creation or elimination of jobs; t he 
creation of new businesses; the elimination of existing businesses; the expansion of 
businesses currently doing business within this state, that would insignificantly affect a 
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 private person or business, and would not impact the ability of California bu sinesses to 
compete with businesses in other states, or on representative private persons. 
Expanding on the Marking Requirements regulations to include the definition of the term 
“cage free” will be an effective way to promote the fair and equitable mark eting of eggs 
and ensure that the market is free of fraud, deception and mislabeling . Therefore, this 
regulation will contribute to an already robust body o f statutory and regulatory precedent 
which will promote consumer confidence in the Egg Industry and enhance the conditions 
for an equitable marke tplace , thereby supporting continued growth of the Egg Industry. 
Convers ely, if these regulations are not promulgated , enforcement activities would lack 
the tools to ensure that th e sale of shell eggs is free of fraud, deception and mislabeling. 
This could lead to a lack of consumer confidence and could be harmful to the industry. 
EVIDENCE SUPPORTING FINDING OF NO SIGNIFICANT STATEWIDE ADVERSE 
ECONOMIC I MPACT DIRECTLY AFFECTING BUSINESSES 
Based upon the reasons stated in the economic impact assessment/analysis, the 
Department has initially determined that these proposed changes to the regulations would 
not have a significant adverse economic impact to persons that are compliant with the 
FAC and 3 CCR. This determination is supported by the addition of a definition includes 
no mandates that require producers to change any existing or future layer facility to cage 
free but rather intends to define what “cage free” means for labeling purposes . The Cage 
Free labeling is an opt -in marketing term. 
REASONABLE ALTERNATIVES TO THE REGULATION AND THE AGENCY’S 
REASONS FOR REJECTING THOSE ALTERNATIVES 
The Department must determine that no reasonable alternative c onsidered by the 
Department or that has otherwise been identified and brought to the attention of the 
Department would be more effective in carrying out the purpose for which the action is 
proposed, would be as effective and less burdensome to affected pri vate persons than 
the proposed regulatory action, or would be more cost -effective to affected private 
persons and equally effective in implementing the statutory policy or other provisions of 
law. The alternative to not pursue this regulatory action would result in deceptive or 
fraudulent labeling and an unfair marketing of the eggs. The adoption of a different 
definition from the one proposed here could cause conflict and confusion as this definition 
supports the most common understanding of cage free. 
DUPLICATION OR CONFLICT WITH FEDERAL REGULATIONS 
The proposed regulations do not duplicate or conflict with federal regulations. 
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