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What are your favorite egg dishes?
Egg dishes? Yeah, oh, I like fried eggs. I have fried eggs every morning sunnyside up, yep. And we make a lot of kish so that's good too.
Today, like everyone else, you know, we're talking about the price of eggs.
I'm Jim Hayes. I work at my farm with my family, and it's located in West Fulton, New York. It's upstate New York.
And how many egg laying hens do you have?
We have right now we have about one hundred and fifty.
Jim's a small scale farmer on Sapbush Hollow farm. He raises chickens for eggs and meat. He also has hogs and sheep. He sells locally, not to national grocery stores, but like many poultry farmers in the US right now, he feels his business is under threat from bird flu.
Well, we go in and out of the barn, you know, we wash our feet and with the disinfectant and try to be as calutious as we possibly can. The main problem where we might get birds the infected is from traveling waterfowl, and in fact, in our area we had two identified with bird flu about six or seven miles from here last week, so we're pretty concerned.
Jim's hens are healthy for now, but he knows how quickly that could change if.
The disease gets into your flock. All right, As a state vet says, you don't have to worry about treating him. You identify it, call him as soon as possible. But yeah, I sorry that the majority of the birds will be dead within forty eight hours. And if they're not, they come in and they will kill all the birds, all right, I mean dispose of them.
The state vet will kill them.
Yeah, the state will come in and kill them if they're not dead already.
And what would that mean for you if bird came to your flock and all your chickens had to be killed.
It's the poultry is diversified. It wouldn't wipe us out, but it would be a significant hit to our operation, all right. I would say it would cut our income by at least thirty five percent.
Jim says he's recently raised his egg prices a little bit, but if you've been to the grocery store recently, you've probably seen eggs with eye popping new markups. And even limits on Carton's per customer. Bird flu is having a serious effect on the chicken industry, and so in this episode, we're turning to Bloomberg's Joe Wisenthal and Tracy Alloway. They're the hosts of the odd Locks podcast, and they've recently reported out a special series called Beak Capitalism. It's all
about the poultry supply chain. We'll talk about how this latest outbreak of bird flu is rocking the chicken and egg markets in the US and what it means for inflation. I'm Sarah Holder, and this is the big take from Bloomberg News. Joe, Tracy, have you tried to buy eggs recently? How did that go?
You know what, I'm gonna tell you a secret, which is I could see this coming months ago, and I stocked up on a bunch of eggs, So if anyone needs them, I have a whole fridge filled with eggs.
I feel guilty about buying eggs like these are like really hard to get. Or when I go to a restaurant and I order an omelet, I'm like, Oh, I wonder if they're now losing money on this because they haven't updated their menu prices. And stuff like I have this like every time I just sort of enjoy an egg, it's like, oh, this is I'm really indulging in a luxury here.
The price of pretty much everything at the grocery store has gotten more expensive over the last few years. But lately the price of eggs has been hitting record highs, and Joe and Tracy say bird flu is to blame. I don't think.
There's any other real catalyst for some of the increases we've seen, like, you know, fifteen percent jump in January. I think over seven dollars as of February seventh average for a dozen eggs with seven thirty four. You know, obviously when egg prices went up a lot in twenty twenty one during the general inflation, you know, there was a bird flu, but it was also widespread inflation, and the were issues with feed and there were issues with fertilizer.
This is not really a story of general inflation right now. This is relative prices and it's eggs specific. It is unambiguously the bird.
Flu story at a basic level, how do producers set the price of eggs?
So this is interesting. It's actually more complicated than maybe you would have thought. There is an egg board. They sort of set either baseline prices or wholesale prices the farmers. The egg farmers will sell their eggs, they'll agree contracts to sell to wholesalers, think about the big grocery stores like a Walmart or something like that, and then Walmart
will decide what the final retail price is going to be. Obviously, they want to make a profit over the wholesale price that they paid the farmer, and so that's where there's a decent amount of discretion. I would say for farmers, some of their contracts they might be locked into a specific price for a longer period of time, so they might not necessarily be able to adjust their prices as
quickly if there's a shortage. But certainly on the retail side, nowadays people can change prices very very quickly in ways that maybe twenty years ago you really weren't able to do that much.
Right.
What about how do producers set the price of chicken? Is that a similar process? Is there a chicken board?
I am not sure if there's a chicken board, But what I would say a lot of people have been asking, well, if there's all this bird flu and there's an egg shortage. Why is there not a chicken shortag? Why aren't we seeing the price of meat go up? And the answer to that is very simple. It takes a lot longer to grow an egg laying hen than it does to grow a meat chicken. Meat chickens, if you don't know, live very sad and very short lives. They're killed after
basically a few weeks. They hatch, they eat a lot to get big and fat, and then they're killed and that takes like a month or a little over a month. Egg laying chickens you have to wait for them to mature, and that takes something like six months at least, And so that's why you're getting this gap. When farmers have to destroy chickens because they found bird flu in their flock, it takes them half a year to rebuild that egg laying flock.
If a farmer does have to kill all of their chickens in accordance with federal rules, they will get some compensation for that loss, but as the upstate New York poultry farmer Jim Hayes says, that money likely won't replace the loss in profits.
I don't know what it would be, but I assure you. Historically, all over the world where they've had to do this, none of the farmers has been happy.
If this government response of killing birds and compensating the farmers sounds drastic, it's because bird flu has proven to be highly contagious.
Once it gets in, all right, they come and contact each other when they go to feed, all right, they'll go to a feeder, peck a little feed, and then they'll leave, and then another will go there and they'll leave, you know, the disease and it's highly contagious, and it transfers very rapidly, and the morbidity mortality rates morbidity and mortality are exceedingly high.
Would that be emotional for you if all your chickens doyn.
Of course, yeah. Anytime you know, you've got birds, you got any animal, all right that dies like that, then we try to do our best to put it up with it. Like my grandchildren, the two that are operating on the farm, all right, once twenty one and one sixteen, but they each have a couple of pet chickens, all right, and a pet goose, and they would all go, you know, so it would be a be significant, all right. It's a public health situation, and there is the concern now
that this flu has jumped to Derek Cows. One person's died from it. But as the state that indicated, this is a flu which is mutating very rapidly, so we don't know what's going to happen. They could jump into humans and be a real problem, and that's a concern and why they're trying to control it.
Coming up after the break, Joe and Tracy on what bird flu means for the eggs on your plate, whether you're cooking them at home or eating out, and what if anything, the Trump administration can do to bring soaring egg prices back down. I wanted to ask Oddlot's hosts Joe Wisenthal and Tracy Alloway about how this disease is starting to impact a few very important stakeholders, the people and companies who buy eggs.
Restaurants would be an obvious one, and in fact, we've seen some restaurants respond to this. Waffle House famously has now instituted a fifty cent surcharge on its egg dishes, which is disappointing for me and Joe because we're big waffle House fans, But again, you know, the consumer, the customer is mostly willing to accept these price hikes because we know, we all listen to the news and we hear how big a deal Avian flu is.
I mean, look, the other thing is part of the point of price increases is demand destruction, right Like, there are obviously going to be people at the margin, unfortunately for whom the price hits a point where like, I'm going to buy fewer eggs because market it's a balance out buyers and sellers, and so part of the you know, one of the things that a price increases do is decrease the amount of buyers. Now, how many people aren't ordering an egg at waffle Houser, aren't ordering an omelet
or sunnyside up eggs because of the search arge. I have no idea, but of course these things will have an effect on demand, and we you know, we've talked about it, just like people buying fewer eggs right now because of the reality of.
This great eggs are considered an essential but that could start to change if it hits a certain threshold.
Yeah, that's why this is so like such a serious existential issue for the econversy. Yeah, I know, I didn't mean to eggs stential, but like you know, we're not talking about the price of persons here, where it's like.
A liver, you can live a great shortage of five.
This is like an essential end product eggs, and also an ingredient into all kinds of things.
One of Donald Trump's promises coming into the White House was to lower the price of eggs. It was a campaign issue, but the Consumer Price Index shows inflation is getting worse in general, and in January, egg prices hit another record high. Is there anything the Trump administration can do to ease inflation on egg prices? And is he doing it?
So this has been the big talking point basically since the pandemic. Inflation went up for a whole bunch of reasons that you know, largely were outside of policy makers control. So it's a little bit ridiculous to see JD. Vance standing in a grocery aisle saying stuff like from day one, we're going to lower egg prices, because as we've seen, it's not that easy. These are very complicated real world problems.
They're difficult to solve, and they certainly take time to solve, and there's always the risk that bird flu might come back. That said, you know, there are some things that could help. So there is a bird flu vaccine specifically for birds, and some places around the world they use it. The reason the US doesn't vaccinate its chickens is because of the export market.
The US exports a lot of chicken meat and products, about five point five billion dollars last year, but many of our trading partners won't import chickens that have been vaccinated. This has put players within the US poultry industry at odds with each other. Egg producers tend to be in favor of a national vaccine strategy, while meat processors are largely opposed.
Well.
Other parts of the world have been affected by bird flu outbreaks in the past. Do we know what the lasting effects of the virus have been on their economies?
You know what? My favorite example of this is actually swine fever in China, and this had a really interesting economic effect. So China had a really bad outbreak of swine fever. A lot of pigs died, and then the government basically said, well, we need you to rebuild all your pork supplies because we don't have enough meat. Meat is very expensive, and so you saw a bunch of new pork companies start up business and basically say we're going to do what the government wants us to do,
and we're going to produce a bunch of pigs. And then lo and behold, you had an explosion in pork meat in China and suddenly there was too much capacity, and so a bunch of these new pork companies ended up failing because prices went down. Too many of them failed, and then pork got expensive again, and then ever since then,
this has been going on for years now. You've sort of seen this boom bust dynamic in China's swine industry, which kind of highlights again these are difficult problems to completely eradicate, but also you can be dealing with downstow stream effects for many many years. Once the economy is disrupted or a particular industry is disrupted in these types of ways, it can reverberate for a long time.
My last question for you too is have we hit peak eggflation or could things get worse before they get better.
Certainly things can get worse before they get better. I think the bigger concern is probably can they get better for how long? If that makes sense. So, again, the pattern that we've seen is we have these outbreaks, people kind of get a handle on them, but then maybe a year or a couple years later, they come back. And that's a big issue for farmers over the long run. You know, it's going to make the business not as profitable. People might decide, you know, it's not worth it being
a chicken farmer anymore. And it certainly makes it difficult to calibrate how much space they need, how many commercial houses for chickens, how much investment they should put into the business. So that's really the big difficulty.
People at Bloomberg would understand this. Normally, high risk business has the potential for high return. Agriculture doesn't work that way. High risk. You're very high risk business, but the return is very low.
Why do you do it then?
Because you love it?
Yeah? Yeah, And as I always tell people to visit, you know, if you can't stand up in the middle of it today and look around you and enjoy that, then you'd better not do it.
Well, thank you so much.
Jim, You're welcome. Have a good day.
This is the Big Take from Bloomberg News. I'm Sarah Holder. This episode was produced by Alex Hye and David Fox. It was edited by Tracy Samuelson and Millie Mumshi. It was fact checked by Adrian A. Tapia and mixed and sound designed by Alex Sugia. Our senior producer is Naomi Shaven. Our senior editor is Elizabeth Ponso. Our executive producer is Nicole beemsterbor Sat Bauman is Bloomberg's head of podcasts. If you liked this episode, make sure to subscribe and review
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