Hobbs orders delay in cage-free rule to counter egg price increase

A plan by Gov. Katie Hobbs to use her powers to make eggs more affordable might not be all it's cracked up to be.
The governor on Friday ordered the state Department of Agriculture to delay its rules mandating cage-free eggs until 2034. Press aide Christian Slater said that delays any cost to producers and, by extension, what they have to charge grocers -- and customers who pay the ultimate tab.
But consumers counting on a big break in their breakfast budgets may be in for a disappointment.
The agency's own estimates prepared when the rules were first proposed pegged the cost of converting from the current 67-square-inch crates to letting hens roam in a barn at anywhere from a penny to 3.25 cents per egg. So that means a savings of anywhere from 12 to 39 cents a dozen on prices that are now running close to $6.
And using an estimate of annual per capita consumption of slightly more than 270 eggs a year, that pencils out to somewhere between $2.71 and $8.79 a person.
Slater acknowledged the limited nature of the fiscal relief his boss can provide, what with egg prices having been driven up by the bird flu leading to the destruction of potentially infected laying hens and the resultant shortage of eggs. But he bristled at a question of exactly how much relief the governor's move will provide to shoppers, calling it "insulting'' to ask whether the governor should not "save every single penny'' for Arizonans.
"People want their elected officials to take action on the issues that are affecting them every single day in their lives,'' Slater said. "That is what the governor is doing.''
Hobbs, in a prepared statement, cited data from the U.S. Department of Agriculture which concluded that the spike in eggs prices isn't over yet. That agency said costs could rise another 20% this year.
But the governor's action isn't occurring in a vacuum.
It comes just days before the House Committee on Land, Agriculture and Rural Affairs is set to consider a proposal by Sen. Shawnna Bolick to totally strip the Department of Agriculture of any power at all to regulate cage sizes. The Phoenix Republican said in a prepared statement that while the state can't do anything about the bird flu "we can pass a law for Arizonans to see some relief on their grocery bills.''
Her SB 1721 already was approved by the Senate last month on a party-line vote.
Slater said the timing of Hobbs' announcement on Friday has nothing to do with the upcoming hearing. But the governor's new directive to delay the rules until 2034 could give her political cover if she were to veto Bolick's legislation
None of this, however, deals with the underlying issue that led to the rule in the first place: the threat by the Humane Society of the United States to ask voters to prohibit the sale of eggs from caged hens -- and do it in a way that neither lawmakers nor the governor could override.
That led the industry, including Glenn Hickman, president of the company that bears his family name, to ask lawmakers in 2020 to step in. The idea was to come up with something more palatable to egg producers, including giving them more time to comply than the initiative would have allowed, and avoiding the criminal penalties that had been proposed.
When lawmakers balked, the Department of Agriculture picked up the cause and, with the support of the egg producers, came up with a plan to phase in a requirement for cage-free eggs.
Those rules were supposed to be in effect now. But the state agency, reacting to egg prices, agreed to delays, first until 2026 and, currently, until 2027.
Hobbs now wants to add another seven years to that in the name of savings.
What that also means, however, is that in the interim Arizona will continue to allow laying hens to be kept all their lives in those 67 square inch pens.
All this, however, could end up being legally moot.
The Goldwater Institute filed suit two years ago on behalf of Tucson restaurant owner Grant Krueger. He contends that the Department of Agriculture never had the legal authority in the first place to enact a rule about how much room laying hens have to have.
Krueger acknowledged that the department acted at the time with the blessing of the egg producers.
But he said that's irrelevant, arguing the power to adopt such rules lies only with the Legislature. And when lawmakers refused to act in 2020, Krueger said, that ended the matter.
His lawsuit survived its first legal challenge last year when Maricopa County Superior Court Judge Scott Blaney rejected a bid by attorneys for the state to toss out the case based on claims that he lacked legal standing to sue.
Key to that is Kruegel's claim he's more affected than the average consumer.
He argued that his three restaurants -- Union Union Public House, Reforma Modern Mexican Mezcal + Tequila, and Proof Artisanal Pizza and Pasta -- purchased 578 cases of eggs in a recent 12-month period, or 104,040 eggs. And using that 3.25 cents per egg estimate, that translates out to $3,380 a year.
Blaney said that means he would "suffer quantifiable economic harm as a direct result of the rule.''
But that's not the end of the matter. The judge said Krueger now will have to present evidence to support his claim.
No date has been set for a trial.