Armstrong, who with 600,000 birds considers himself a medium-size egg farmer, had predicted he would have to leave the state rather than convert to cage-free housing.
The state egg industry has been on the decline because of overall reduced egg consumption. On Wednesday, Armstrong sounded gloomy about his future.
"We haven't quite figured it out. We'll probably in the next month or so let some employees go and slim down our operations," he said. "Our goal is probably not to stay in the egg business."
Asked if he would have been downsizing his labor force whether the measure won or lost, Armstrong said no. "We're going to have to cut birds and employees."
He said it would cost roughly $30 a bird to create new housing. But even if he didn't keep all his birds, it would still be too expensive, he said. "If I ask a banker today for $12 million, he would say don't bother filling out the application," he said.
The head of the Humane Society of the U.S., which sponsored the campaign, said farmers would adjust to meet an increasing demand for eggs from cage-free birds.
"For them to say, 'We're all going out of business because we have to let the birds stretch their wings,' is absurd. That's why the public rejected their argument," said Wayne Pacelle, the group's president.
Paul Shapiro, the Humane Society's farm animal welfare expert, said that when pork and veal crates were phased out in Arizona, "the pork and veal producers made the same apocalyptic predictions." But after Arizona voters passed the initiative, no pork producers left the state.
As the concept of treating farm animals humanely has become more accepted by the public, there has been an increase in demand for eggs from cage-free hens.
Restaurateur Wolfgang Puck said last year he would not use eggs from caged hens. Major chains that are using some cage-free hens' eggs include Denny's, Carl's Jr. and Hardee's. Numerous college and corporate cafeterias have switched to such eggs.
"Farmers are going to have to adjust their production strategies to accommodate this demand," Pacelle said. "Over these next six years, the market for cage-free is expected to increase."
Pacelle said the Humane Society was talking to egg producers in other states about changing their operations.
"It will force a lot of industrial farmers in other states to sit down and negotiate a phase-out because they don't want to go through what the egg industry went through in this state," he said. The egg industry spent "eight-and-a-half million bucks and they got a drubbing."
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carla.hall@latimes.com
jerry.hirsch@latimes.com
