The Difference is Half a Cent: Why the Ban on Cages Will Not Change Egg Prices 0 10

The analysis notes that Latvia is a net exporter of eggs and egg products with a high level of self-sufficiency and ranked second in the world in 2024 for egg exports per capita. The industry is already undergoing a rapid transition to cage-free production — major producers, including "Balticovo" and "Alūksnes putnu ferma", are implementing large-scale investments and plan to completely or almost completely abandon cage systems even before the ban comes into effect.

According to the analysis, the ban will directly affect about 6% of the total capacity for keeping laying hens in Latvia, mainly a few small farms. The cost of transforming these facilities is estimated at 10–12 million euros, which is significantly lower than previously stated estimates in the public domain.

The document emphasizes that the actual price difference between cage and free-range eggs in Latvian stores is small — about 0.5 cents per egg, and the price differences are mainly determined by retailer markups rather than the method of keeping the birds. Due to low price elasticity of demand, no significant decrease in egg consumption or negative impact on fiscal indicators is expected.

The analysis also notes that most retail and food companies in Latvia have already committed to phasing out cage eggs by 2026, while the import of eggs with low animal welfare standards, including from Ukraine, creates competitive and safety risks that the government should address more actively.

The authors of the report conclude that the ban on cage farming, with a sufficient transition period, will strengthen the ongoing market changes without creating a risk of industry collapse, and may simultaneously enhance the competitiveness of Latvian egg producers and their exports in the European market.

The report was prepared in connection with the bill on banning cage farming currently being considered in the Saeima, whose initial annotation, according to the responsible committee, did not provide sufficient economic justification for the proportionality of the proposed regulation. The authors of the analysis note that it was necessary to objectively assess the impact of the ban on the egg production industry, consumer prices, company investments, tax revenues, and the competitiveness of Latvia.

The report was prepared by economic analysts Gatis Eglitis and Arturs Kanepais. The analysis used microeconomic calculations, financial data from the industry, estimates of price and demand elasticity, as well as data from the Central Statistical Bureau, the Food and Veterinary Service, and European Union institutions.