In a ruling on Tuesday, U.S. District Judge Steven Seeger in Chicago said the risk of unfair prejudice against the egg producers and marketers by showing the graphic videos was “extreme” and outweighed any minimal value in the antitrust litigation accusing them of curbing domestic supply in order to charge higher prices.

“After watching the videos, it would not take much for jurors to believe that the egg industry abuses chickens,” Seeger wrote.

Kraft and the other plaintiffs wanted to play the videos at the trial next month to bolster their claim that an industry-wide animal welfare initiative announced in 2002 was a “sham” and actually part of a broader scheme to restrain the supply of eggs.

Seeger’s ruling on the videos was among several orders he issued on Tuesday addressing the scope of what jurors will be allowed to see and hear at the five-week trial.

Kraft and the other plaintiffs, also including General Mills and Nestle, are seeking more than US$110 million in damages against United Egg Producers and other defendants, including two farms.

Lawyers for the defendants on Wednesday did not immediately respond to a request for comment.

Representatives for Kraft and the other companies either declined to comment or did not immediately respond to a request for comment.

Seeger is presiding over a case that was previously in Philadelphia federal court as part of a multidistrict litigation proceeding. Kraft’s case returned to the Northern District of Illinois in 2019.

Lawyers for Kraft and co-plaintiffs said they obtained the videos from the Humane Society of the United States. They purport to show “day-to-day operations within defendants’ facilities.”

In a court filing, attorneys for United Egg Producers and the other defendants said the videos were “surreptitiously” recorded by animal rights activists and include “highly edited footage.”

The attorneys also said the recordings were irrelevant to the plaintiffs’ claims.

Seeger said the plaintiffs’ lawyers do not need the videos to argue that the egg industry’s promotion of animal welfare was not genuine.

“After personally watching all of the videos, the court is convinced that the videos would undermine the truth-seeking function of the trial,” Seeger wrote.

— Mike Scarcella is a Reuters legal affairs reporter in Washington, D.C.

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International Layer Distribution (ILD), a subsidiary of German egg layer breeding firm EW Group, and Trouw Nutrition Canada, a livestock feed arm of Nutreco, on Monday announced their joint venture has acquired Clark’s Poultry for an undisclosed sum.

Clark’s, founded by Doug Clark in 1947 and sold to the Brandon-based Lawson family in 1970, sells layer chicks in Manitoba, Saskatchewan, and Alberta under the Lohmann Breeders brand.

“After 44 years in the industry, the time has come for me to move on and let the current management and sales team, along with the new ownership group, take Clark’s Poultry to the next level of excellence in the hatchery industry,” Clark’s president Brad Lawson said in a release.

“We feel the new ownership of the hatchery will allow us not only to invest in the Canadian community and the team we have built, but also to continue improving on our existing chick quality and customer support,” Greg Moorehead, who becomes Clark’s general manager, said in the same release.

Lohmann Breeders, another German-based international firm in the layer parent breeding business, has been part of ILD’s parent firm, EW Group, since 1987, when Lohmann was bought by what was then known as Paul Wesjohann and Co.

Livestock feed firm Trouw Nutrition Canada was formed in 2017 in the merger of the Canadian feed business of Nutreco with those of Shur-Gain, Landmark Feeds and Hi-Pro Feeds.

Maarten Bijl, managing director for Trouw Nutrition North America, and Albert Cordts, ILD’s managing director, jointly said Tuesday that “continuing the high quality, and the excellent service, customers know from Clark’s is very important to us. This acquisition also shows long-term and continued commitment to the Prairie provinces and their producers.” –– Glacier FarmMedia Network

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The grocer members of the Retail Council of Canada (RCC), which include Loblaw, Sobeys/Safeway, Metro and Wal-Mart Canada, said Friday they are “voluntarily committing to the objective of purchasing cage-free eggs by the end of 2025.”

However, David Wilkes, senior vice-president for government relations and the grocery division at RCC, said in a release that the grocers’ commitment is “made recognizing the restrictions created by Canada’s supply management system.”

The cage-free timeline, he said, thus “will have to be managed in the context of availability of supply within the domestic market.”

The RCC also noted the National Farm Animal Care Council (NFACC) expects to release a new Canadian code of practice for layer hens later this year.

When released, NFACC’s layer hen code is expected to guide Canada’s egg sector on various aspects of farm management and welfare practices, by way of “recommendations and requirements for housing, care, transportation, processing and other animal husbandry practices,” the RCC said.

The RCC, Wilkes said, “remains firmly committed to the NFACC process and will work with other participants to not only advance our voluntary commitment to move to cage-free environments by the end of 2025, but also by ensuring suppliers adhere to the code’s recommendations.”

Egg Farmers of Canada (EFC) last month announced a transition plan to move all Canadian layer hens away from conventional battery cage-style housing into “enriched housing, free-run, aviary or free-range” by 2036 — “assuming the current market conditions prevail.”

Without mentioning the RCC announcement, the national egg producer group said in a statement Friday it “look(s) forward to working with retailers to ensure high-quality Canadian eggs remain on grocery shelves everywhere, and we will continue to work with our supply chain to do so and to align our approaches as much as possible.”

EFC on Friday also noted its members have long supported and taken part in the NFACC process and brought last month’s industry plan forward for the NFACC review of the egg industry code or practice.

“We believe a code that takes into account what the egg industry analyzed, developed and proposed to be realistic will be stronger, and a tremendous framework on which to make many other enhancements to our industry for years to come,” EFC said.

EFC also said it’s committed to research on hen housing systems as well as consumer preferences, and to make sure decisions on industry practices are “evidence-based.”

Doing so, the egg producer group said, “ensures choice and price stability to shoppers while protecting the entire supply chain from shortages or the production of eggs for which there are no market.”

EFC also reiterated Friday that the various layer hen housing systems in use today “all have trade-offs across a host of sustainability factors including animal health and well-being, environment, food safety, worker health and safety and food affordability.”

Various non-government animal welfare groups on Friday hailed the RCC’s move, noting RCC grocer members account for 90 per cent of grocery store sales in Canada.

World Animal Protection Canada executive director Josey Kitson said in a separate release that the council’s decision “will have a transformative effect on the way that laying hens are housed in Canada.”

Nathan Runkle, president of the Canadian arm of Mercy for Animals, in another release, called RCC’s pledge “a watershed moment for farmed animals and caring consumers in Canada” and said it marks a “tipping point” for the egg sector.

“Any food company that has not yet adopted a cage-free egg policy is simply out of step with consumer expectations and business trends.”

Major quick-service restaurant chains operating in Canada have made announcements similar to the RCC’s in recent months, varying in the level of housing they expect for layer hens.

A+W said earlier this month it plans to get all its eggs from open-barn suppliers within two years. The owner of Tim Hortons and Burger King said last month it would take the chains’ North American egg supplies cage-free by 2025, and McDonald’s last fall pledged to shift to free-run eggs in the same time period. –– AGCanada.com Network

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The plan — announced Friday by Egg Farmers of Canada, an industry group that manages nearly all of the country’s egg supply — comes as various fast-food and quick-service restaurant chains set targets for only buying eggs that come from cage-free hens.

“This isn’t something we’ve done because of companies making announcements,” said Roger Pelissero, a farmer at West Lincoln, Ont., southeast of Hamilton, and first vice-chair for the national group. “We always have in our mind what is best for our hens.”

The organization, which represents over 1,000 egg farms across the country, mapped out a plan that immediately commits egg farmers not to install any new conventional cage housing.

About 90 per cent of egg production in Canada is now in conventional housing, commonly known as battery cages, which are slightly larger than filing cabinet drawers and hold several birds each. About 10 per cent is in enriched housing, free-run, aviary or free-range formats.

The plan, to be overseen by a national working group in collaboration with the entire egg supply chain, calls for a shift to about a 50-50 mix in eight years, moving to about 85 per cent alternative over conventional in 15 years.

“All production would be in enriched housing, free-run, aviary or free-range by 2036, assuming the current market conditions prevail,” the organization said in a release, adding those projections “represent a realistic forecast of what is achievable.”

Manitoba Egg Farmers, for one, already announced in late 2013 it would ban the installation of new conventional cages beyond 2014.

Egg Farmers of Canada said it also hopes to discuss, with stakeholders and consumers, the benefits of the enriched-housing model, “which do not seem to be well or widely understood outside of the industry.”

Enriched housing provides birds with more space per bird than conventional battery cages, along with perches, scratching surfaces and private nesting boxes.

While not free-run or free-range, the enriched model is meant to maintain food safety, reduce mortalities, limit cannibalism and other aggressive behaviours and ensure adequate feed and water for all birds.

“This announcement is a huge shift and we’re confident the market will make it happen before 2036,” said Sayara Thurston, a campaigner with Humane Society International, adding that U.S. farmers have not made a similar pledge.

Egg Farmers of Canada’s announcement follows a pledge Monday from Restaurant Brands International (RBI), operator of the Tim Hortons and Burger King chains, that it would move to 100 per cent cage-free eggs for its Canadian, U.S. and Mexican stores by 2025.

Ontario-based Cara Operations, whose chains in Canada include Swiss Chalet, Harvey’s, Milestones, Montana’s, Kelsey’s, East Side Mario’s, New York Fries and others, announced Thursday some of its brands will shift toward cage-free egg supplies starting this year, with all brands transitioning by 2020.

Mercy for Animals, an animal welfare group known for its releases of undercover video from meat packing plants and barns, had specifically called out Swiss Chalet and Harvey’s in its announcement Monday hailing RBI’s move.

Chains such as Subway, McDonald’s, Wendy’s and Starbucks have made similar commitments in recent months, giving various time frames.

Mercy for Animals president Nathan Runkle, in a separate statement Friday, described the Egg Farmers timeline as “simply outrageous… If egg producers truly care about animal welfare, they shouldn’t allow animals to languish in crowded, filthy cages for decades on end.”

The two-decade target is intended to protect farmers from financial hardship, as non-conventional systems are more expensive, Pelissero said.

Canadian farmers will move to several alternatives, including larger cages with amenities like nesting boxes and perches; housing that allow hens access to the entire barn floor; and farms that allow them outdoors.

The Humane Society is disappointed Canadian farmers aren’t phasing out cages entirely as the difference in welfare between birds raised in any type of cage compared with other methods is “night and day,” Thurston said.

Pelissero said there are downsides to any system. Chickens that have too much freedom can peck each other to death.

Canada, which manages supply and prices, produces eggs mostly for its domestic market. Prices paid to farmers reflect costs of production, meaning that egg buyers and possibly consumers will absorb higher prices, Pelissero said.

Most of a farmer’s cost of production is from feed, however.

— Rod Nickel is a Reuters correspondent covering the agriculture and mining sectors from Winnipeg. Includes files from AGCanada.com Network staff.

CORRECTION, Feb. 9, 2016: A previous version of this story misidentified Manitoba Egg Farmers as “Manitoba Egg Producers.” We regret the error.

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Subway, which already serves eggs laid by free-range hens at its outlets in Europe and eggs laid by cage-free hens in Australia, said it has already begun using such eggs in select areas in the U.S. and Canada.

The restaurant chain, owned by Doctors Associates Inc., has more than 30,000 outlets in North America.

The decision comes at a time when the food industry is under pressure from groups including the Humane Society of the United States, Mercy for Animals and World Animal Protection, which have successfully lobbied many companies to adopt animal welfare practices.

Both General Mills and Kellogg said earlier this year they will source 100 per cent cage-free eggs by 2025.

Fast-food companies have made similar announcements. McDonald’s said in September that its 16,000 U.S. and Canadian restaurants would serve only eggs laid by cage-free chickens within 10 years, while rival Burger King has committed to using such eggs by 2017.

Starbucks said in October that it would also make the switch in North America within five years.

Subway’s recent policy changes in livestock sourcing also included a pledge to serve only proteins from antibiotic-free sources in the U.S. by 2025.

In its release Monday, the company said it “continues to monitor layer hen housing research to identify future, best-practice menu and ingredient solutions that meet the highest standards of animal welfare.”

— Reporting for Reuters by Ramkumar Iyer in Bangalore. Includes files from AGCanada.com Network staff.

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The world’s largest food maker said it uses about 20 million pounds of eggs annually in products such as Toll House cookie dough, Haagen-Dazs ice cream and Stouffer’s breakfast items. Currently, none of Nestle’s U.S. egg supply is cage-free, Paul Bakus, president of U.S. corporate affairs, said in an interview.

The decision comes at a time when the food industry is under pressure from groups including the Humane Society of the United States, Mercy for Animals and World Animal Protection, which have successfully lobbied many companies to adopt animal welfare practices.

Companies have also said consumers are paying more attention to how the food they buy is made, prompting industry to change its sourcing of ingredients.

Bakus said the transition to cage-free eggs is backed by Nestle’s current suppliers and the change is not expected to significantly increase the cost of eggs for Nestle. The U.S. is Nestle’s biggest market.

“At this point, we’re not planning on passing through any costs associated with this to our consumers because we’re hopeful the costs will be minimal,” he said.

Both General Mills and Kellogg said earlier this year they will source 100 per cent cage-free eggs by 2025.

Fast-food companies have made similar announcements. McDonald’s said in September its 16,000 U.S. and Canadian restaurants will serve only eggs laid by cage-free chickens within 10 years while rival Burger King has committed to using only cage-free eggs by 2017.

“When the world’s largest food company speaks, their suppliers listen,” said Matthew Prescott, senior food policy director of the Humane Society of the United States, of Nestle’s announcement. “In the short term, any egg producer would have to be out of their right mind to build a facility with cages.”

He added, “What we hope Nestle will do is extend the timeline to the rest of its supply chain worldwide.”

Bakus said Nestle had prioritized making the transition to cage-free eggs in the U.S. International markets have separate supply chains, making it harder for them to commit to the same timeline, he said.

— Anjali Athavaley reports on the U.S. food and beverage sectors for Reuters from New York City.

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The ban, which follows similar moves by Burger King and food services company Sodexo, carries higher costs that may, at least initially, sting farmers.

For the egg industry, the transition to “cage-free” production will be slow and expensive. Only six per cent of U.S. hens, or about 18 million birds, are currently raised without cages, according to trade group United Egg Producers.

Having more food companies switch to cage-free eggs is “a mixed blessing because it strains supply,” said Deborah Hecker, a vice-president with Sodexo North America.

Sodexo went cage-free for eggs still in the shell last summer in the U.S. and Canada and aims to do the same for liquid eggs by 2020.

Cage-free eggs are produced by hens free to move around inside a barn, as opposed to conventional eggs that come from hens packed in cages alongside other birds.

Farmers say it can take up to five years to build new cage-free facilities or retrofit barns because they must obtain permits and raise money.

It is normal for U.S. farmers to provide about 80 square inches per bird in caged operations, which is less than the size of a sheet of notebook paper, according to the Coalition for Sustainable Egg Supply, an industry group. Cage-free facilities are often constructed with the equivalent of about 144 square inches per hen, the group said, though the chickens can move over larger areas.

Production costs overall are about 36 per cent higher for cage-free eggs because the hens get extra space and still require at least as much human labor for cleaning and care, according to the coalition.

Equipment alone for cage-free facilities costs about $25 to $30 a bird, compared to about $15 for a caged house, said Chad Gregory, CEO for United Egg Producers (all figures US$). For an egg producer with a million hens, that amounts to $30 million to outfit a new barn.

Cage-free barns usually feature different levels on which chickens can walk and movable perches on which they can sit. Without cages, the hens are more likely to be pecked to death by their fellow birds, researchers say.

Growing cage-free demand

A group called Citizens for Farm Animal Protection, which includes the Humane Society of the United States, is pushing for a vote in Massachusetts next year on a measure that would ban small cages for egg-laying hens. California has already prohibited the sale of eggs from hens raised in spaces not large enough to spread their wings.

McDonald’s, the world’s biggest restaurant chain, on Sept. 9 said it will switch to cage-free eggs by 2025 in the U.S. and Canada. However, the company does not plan to raise prices on its menu.

Costco and Wal-Mart also have said they will move to eggs from cage-free hens, but not announced timelines.

Privately held CKE Restaurants, parent of Carl’s Jr. and Hardee’s, are now likely to face pressure to make the switch too, given its breakfast sales, said Morningstar analyst R.J. Hottovy. CKE declined to comment.

To meet McDonald’s current demand for about two billion eggs a year to make McMuffins and other breakfast items, farmers will need to add about seven million hens to cage-free facilities, Gregory said.

Farmers are feeling that buyers switching to cage-free eggs “is kind of the new norm now,” he said.

Eggs were widely produced without caging hens until the 1960s, said Margaret Hudson, president of Burnbrae Farms, McDonald’s largest Canadian egg supplier. It’s unlikely conventional systems with cages will disappear immediately, she said.

“When preferences change, the challenge is to transfer those additional costs,” said Oak Bluff, Man. egg farmer Harold Froese.

The shift toward more expensive cage-free production comes as U.S. shoppers are already grappling with record high egg prices following the loss of more than 42 million egg-laying hens in the worst outbreak of bird flu in the nation’s history. McDonald’s is expected to further strain supplies by launching all-day breakfast in the U.S. next month.

Hickman’s Family Farms, which sells eggs to a company that supplies McDonald’s, plans to add about two million cage-free birds to its current flock of about 150,000 cage-free and organic chickens, said Billy Hickman, vice-president of operations.

“We need to go where the market is going,” Hickman said.

— Tom Polansek and Rod Nickel report for Reuters from Chicago and Winnipeg respectively. Additional reporting for Reuters by Lisa Baertlein in Los Angeles.

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