November 06, 2008 at 12:00 pm by Tom Lydon
The ballots have been counted and and Proposition 2 has passed, no doubt having implications for livestock exchange traded funds (ETFs).
But what kind of implications is a matter of much debate.
Californians voted yes on the proposition to free around 20 million egg-laying hens from their tiny cages, but the farmers are the ones with their feathers ruffled. For months farmers had contended that the measure would drive up egg prices or even put them out of business because of the high cost of retrofitting their farms with cage-free facilities, report Carla Hall and Jerry Hirsch for The LA Times.
California already imports around one-third of their eggs from farms outside the state, which are not subject to these limitations, so most suspect there will not be any jump in egg prices. The measure does not take effect until 2015, either, so there is plenty of time for farmers to shore up and retrofit their farms. Typically, eggs from cage-free hens cost at least 25% more than conventional aggs.
The measure also bans confining crates and cages for hens, pregnant pigs and veal calves that don’t allow the animals to turn around, lie down and extend their limbs. The largest pork producer here already went crate-free and there are few veal producers in California.
Many of the larger fast food chains, such as Burger King and Denny’s already use cage-free eggs.
- MLCX Livestock ELEMENTS ETN (LSO), down 16.5% since April 15 inception
- E-TRACS UBS Bloomberg Food (FUD), down 25.7% since April 4 inception
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