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State and federal regulations, as well as two lawsuits, are under way that could change how eggs are produced and sold in the former egg basket of the world — and how much they cost.

The changes are widening the market for smaller egg producers who raise their hens in a "pastured" environment where the birds are free to roam and eat insects and grasses, while causing Petaluma's more traditional farms to struggle to continue providing low-cost eggs.

A day before many Petalumans took to the streets on April 27 to commemorate their agricultural heritage in the Butter & Egg Days Parade, The Humane Society of the United States and the United Egg Producers, which represents farmers who produce more than 90 percent of the eggs in America, announced their support for bipartisan federal legislation aimed at improving the treatment of 280 million laying hens.

It's called The Egg Products Inspection Act Amendments of 2013 and it sets a national standard for larger hen cages.

If passed, the federal legislation would change hen cages by Jan. 1, 2015, in tandem with the mandates of California's Proposition 2. That law was passed by voters in 2008 to create more humane standards for farm animals and requires that hens be given room to turn around, lie down, stand up and fully extend their limbs.

Concerns about the effects of Prop. 2 on egg producers in California prompted passage of another law that requires all eggs sold statewide, even if they were produced in another state, to comply with the hen housing requirements by 2015.

Chad Gregory, president of United Egg Producers, said that federal laws are needed because all the differing state requirements "threatens to eliminate interstate egg commerce, destroying our businesses and potentially leading to egg shortages and consumer price spikes in many states."

The federal legislation also calls for a national labeling standard for egg cartons designating the method used to produce the eggs, including "caged hens," "eggs from cage-free hens," and "eggs from free-range hens."

Labeling has become an increasing concern as consumers grow more interested in how the hens are cared for — and are willing to pay more for "free-range," "cage-free" or "pastured" eggs.

Local producers agree that producing eggs using those methods is more expensive and that those costs are passed on to retailers and consumers.

Still, Jamie Downing, general manager at the Petaluma Market, said local shoppers have become increasingly interested in eggs produced by cage-free hens: "It is something I hear more about...something people ask and talk more about."

Downy said that about half the customers at Petaluma Market ask for cage-free eggs but acknowledged that many customers remain confused by what all the labeling means.

Steve Mahrt, owner of the mid-sized Petaluma Egg Farms, found himself in the middle of a debate over what, exactly, all the labeling means when the Animal Legal Defense Fund filed suit against him last October.

The ALDF claimed the images of hens, grass and sunshine on egg cartons for one of Mahrt's egg brands, Judy's Family Farm, misrepresented the conditions for hens on the farm.

Mahrt countered by saying that the hens that produce eggs for Judy's Family Farm are raised cage-free and that the images on the carton are not a misrepresentation.

Not stopping with Mahrt, the ALDF joined the animal rights group Compassion Over Killing in filing another lawsuit against federal agencies requiring that they regulate animal welfare labeling on egg cartons. Cheryl Leahy, legal counsel for Compassion Over Killing, said this was important "since research shows many consumers are willing to pay more for eggs they perceive to have been produced by hens treated with a higher level of animal welfare."

Arnie Riebli, a fourth generation egg farmer and owner of Sunrise Farms, who has been in business here for decades, said Proposition 2 and laws like it are "well-intended," but like many well-intended things could have "unintended consequences," like driving some producers out of business.

Riebli, who is also the president of the California Association of Egg Farmers, maintains that the nutritional value of an egg is the same no matter how it is produced.

The difference, he said, is the cost, which jumps from $3 to $5 per dozen for caged or cage-free productions to the $7 to $8 range for "pasture" produced eggs.

Despite the price, Petaluma Farmer's Market co-manager Alyx Cucci said that demand does seem to have increased for eggs that are raised using more hen-friendly methods.

"Even at $7 or $8 a dozen people are buying them," Cucci said.

As a consumer of eggs, she added that she understands how the price tag could prevent some buyers from buying pasture-produced eggs.

A Petaluma producer of pastured eggs, Patricia Sullivan, owner of Happy Hens Farm, sells her eggs at six local farmers markets, including the new Tuesday Eastside market. She said she began labeling her egg cartons a few years ago because "transparency is important to me...and I am proud of the way my eggs are produced."

Sullivan said she thinks the increased demand for better egg production methods is a nationwide trend, a result of "consumers becoming more educated and making more informed choices."

"If you care about the egg you care about the hen," she said.

(Contact Marsha Trent at argus@arguscourier.com.)