WEBVTT - A Major American Egg Farm Just Lost 90% of its Chickens

0:00:02.720 --> 0:00:16.480
<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio News.

0:00:18.560 --> 0:00:21.720
<v Speaker 2>Hello and welcome to another episode of the Odd Lots podcast.

0:00:21.840 --> 0:00:23.239
<v Speaker 2>I'm Tracy Allaway and.

0:00:23.160 --> 0:00:24.239
<v Speaker 3>I'm Joe whisenth Thal.

0:00:24.480 --> 0:00:28.360
<v Speaker 2>So Joe, just a few months ago, you will remember,

0:00:28.600 --> 0:00:32.040
<v Speaker 2>I'm sure egg prices were a really big deal, and

0:00:32.120 --> 0:00:35.560
<v Speaker 2>we had all these headlines about eggs costing like ten

0:00:35.640 --> 0:00:39.519
<v Speaker 2>dollars a dozen and shortages of eggs at supermarkets or

0:00:40.000 --> 0:00:43.559
<v Speaker 2>eggs being rationed, and it even became a sort of

0:00:43.680 --> 0:00:48.640
<v Speaker 2>political touchstone. It featured in the elections. And fast forward

0:00:48.680 --> 0:00:51.400
<v Speaker 2>to today and it feels like no one's really talking

0:00:51.400 --> 0:00:54.480
<v Speaker 2>about egg prices anymore. Egg price is paid to be

0:00:54.520 --> 0:00:58.720
<v Speaker 2>at West Producers. They've gone from like eight dollars twenty

0:00:58.720 --> 0:01:01.560
<v Speaker 2>four cents to something like three dollars forty four cents.

0:01:01.560 --> 0:01:05.160
<v Speaker 2>So we've seen a really dramatic decline. We're recording this,

0:01:05.360 --> 0:01:07.600
<v Speaker 2>by the way, on June third, which happens to be

0:01:07.720 --> 0:01:08.600
<v Speaker 2>National Egg Day.

0:01:08.959 --> 0:01:11.119
<v Speaker 3>When you look at the price, you can see why

0:01:11.120 --> 0:01:12.840
<v Speaker 3>I know how to talk about it anymore. Right, There

0:01:12.840 --> 0:01:15.319
<v Speaker 3>are certain charts in the world that we only talk

0:01:15.400 --> 0:01:16.520
<v Speaker 3>about when they're going.

0:01:16.319 --> 0:01:17.120
<v Speaker 2>On they're parallel.

0:01:17.480 --> 0:01:19.320
<v Speaker 3>There's others that we only talk about when they're going

0:01:19.360 --> 0:01:22.560
<v Speaker 3>down prices for things like certain food items we tend

0:01:22.560 --> 0:01:23.840
<v Speaker 3>to only talk about on the way up.

0:01:23.959 --> 0:01:26.600
<v Speaker 2>Yeah, but here's my big question. As far as I

0:01:26.640 --> 0:01:29.959
<v Speaker 2>can tell, bird flu is still very much wet. Yes,

0:01:30.160 --> 0:01:32.959
<v Speaker 2>so you know the thing that caused egg prices to

0:01:33.080 --> 0:01:36.440
<v Speaker 2>spike in the first place, And so I'm very curious

0:01:36.680 --> 0:01:39.000
<v Speaker 2>why prices have come down. How much of it is

0:01:39.080 --> 0:01:42.440
<v Speaker 2>just people who stopped buying eggs because they were so expensive,

0:01:42.520 --> 0:01:45.400
<v Speaker 2>versus how much of it is maybe the poultry supply

0:01:45.640 --> 0:01:49.680
<v Speaker 2>got built back up. And I'm happy to say we

0:01:49.800 --> 0:01:52.320
<v Speaker 2>have the perfect guest to discuss all of this, although

0:01:52.320 --> 0:01:55.919
<v Speaker 2>the context in which we're talking is actually very sad.

0:01:56.200 --> 0:01:58.360
<v Speaker 2>We're going to be speaking with Glenn Hickman. He is

0:01:58.400 --> 0:02:02.320
<v Speaker 2>the president of Hickman's Egg in Arizona, one of the

0:02:02.400 --> 0:02:05.400
<v Speaker 2>largest egg producers in the US. And you might remember

0:02:05.440 --> 0:02:09.480
<v Speaker 2>Glenn from our special three part series Beat Capitalism, in

0:02:09.480 --> 0:02:13.359
<v Speaker 2>which we talked about soaring egg prices and Avian flu.

0:02:13.520 --> 0:02:17.360
<v Speaker 2>And unfortunately, there's been a pretty dramatic development for the

0:02:17.440 --> 0:02:20.920
<v Speaker 2>egg ranch since then, and they have just lost ninety

0:02:21.000 --> 0:02:23.400
<v Speaker 2>five percent of their chickens to the flu.

0:02:23.680 --> 0:02:26.640
<v Speaker 3>Yeah, I mean, it's an absolutely staggering number one thing

0:02:26.880 --> 0:02:29.680
<v Speaker 3>before we get into the conversation that I think is

0:02:29.720 --> 0:02:32.440
<v Speaker 3>really striking is that you mentioned that prices have come

0:02:32.480 --> 0:02:35.040
<v Speaker 3>down by basically any measure, And I'm looking at that

0:02:35.240 --> 0:02:38.800
<v Speaker 3>Midwest delivery number that's gone from over eight hundred to

0:02:38.840 --> 0:02:42.280
<v Speaker 3>three forty four, I mean compared to years before it.

0:02:42.320 --> 0:02:45.440
<v Speaker 3>I mean that was below one hundred for a long time.

0:02:45.520 --> 0:02:48.600
<v Speaker 3>So even though prices have come down from that recent spike,

0:02:49.000 --> 0:02:51.520
<v Speaker 3>eggs are just they're very expensive these days. And so

0:02:51.600 --> 0:02:55.280
<v Speaker 3>there's clearly this like persistent issue and something has changed,

0:02:55.480 --> 0:02:58.560
<v Speaker 3>maybe it's bird flu, something else that continues to put

0:02:58.600 --> 0:03:00.000
<v Speaker 3>sustained upward price on eggs.

0:03:00.200 --> 0:03:02.280
<v Speaker 2>Yeah, so we need to talk about all of this.

0:03:02.560 --> 0:03:05.400
<v Speaker 2>So Glenn, welcome back to the show. I wish it

0:03:05.440 --> 0:03:07.639
<v Speaker 2>were under better circumstances.

0:03:07.919 --> 0:03:09.040
<v Speaker 4>Well, thank you for having me.

0:03:09.600 --> 0:03:11.880
<v Speaker 2>So why don't you go ahead and tell us what

0:03:12.000 --> 0:03:14.800
<v Speaker 2>exactly is going on, Like what's the situation over at

0:03:14.800 --> 0:03:15.360
<v Speaker 2>the egg ranch.

0:03:15.639 --> 0:03:18.480
<v Speaker 5>Sure, we have four laying farms here in the state

0:03:18.480 --> 0:03:23.360
<v Speaker 5>of Arizona. Our farm down south in the city of Maricolo,

0:03:23.400 --> 0:03:27.000
<v Speaker 5>but got sick with bird flu in November, and then

0:03:27.200 --> 0:03:30.200
<v Speaker 5>was when we tried to refill the farm in January,

0:03:30.240 --> 0:03:34.640
<v Speaker 5>it got reinfected again, so that farm is still just

0:03:34.680 --> 0:03:37.720
<v Speaker 5>barely populated. They've got three hundred and forty thousand chickens

0:03:37.720 --> 0:03:41.800
<v Speaker 5>down there. But two weeks ago, on Friday, our biggest

0:03:41.840 --> 0:03:46.000
<v Speaker 5>farm in Tona Pie, Arizona, got sick with bird flu.

0:03:46.120 --> 0:03:49.520
<v Speaker 5>And subsequent to that, our two other farms in Arlington,

0:03:49.560 --> 0:03:52.720
<v Speaker 5>Arizona have gotten bird flu, and virtually all of our

0:03:52.760 --> 0:03:56.840
<v Speaker 5>replacement bullets have gotten bird flu. So right now today

0:03:56.880 --> 0:03:59.760
<v Speaker 5>we've got a total infection of about six million birds

0:03:59.840 --> 0:04:02.880
<v Speaker 5>that we're in the process of depopulating.

0:04:03.760 --> 0:04:06.360
<v Speaker 3>Bird Flu comes and goes from time to time in

0:04:06.360 --> 0:04:08.520
<v Speaker 3>the US. Can you talk a little bit about this

0:04:08.680 --> 0:04:11.040
<v Speaker 3>current what seems to be a sustained wave, And of course,

0:04:11.080 --> 0:04:12.680
<v Speaker 3>the first time we talked to I think was either

0:04:12.720 --> 0:04:14.400
<v Speaker 3>in late twenty twenty two or.

0:04:14.400 --> 0:04:16.040
<v Speaker 6>Late twenty two, late twenty.

0:04:15.840 --> 0:04:18.000
<v Speaker 3>Twenty two, and then that went away and then it

0:04:18.040 --> 0:04:20.320
<v Speaker 3>came back. Do you have an explanation of what is

0:04:20.320 --> 0:04:24.360
<v Speaker 3>going on big picture that this is a sustained, persistent

0:04:24.600 --> 0:04:25.799
<v Speaker 3>problem in bird health.

0:04:26.279 --> 0:04:28.880
<v Speaker 5>Sure, when this round of bird flu started on the

0:04:28.920 --> 0:04:32.120
<v Speaker 5>East Coast in February twenty twenty two, it was still

0:04:32.160 --> 0:04:36.279
<v Speaker 5>thought to be a seasonal challenge that was carried by

0:04:36.640 --> 0:04:40.719
<v Speaker 5>a migratory waterfowl. Now, I wouldn't say that it's gone

0:04:40.760 --> 0:04:43.919
<v Speaker 5>away and came back. I'd say it's more a little

0:04:43.920 --> 0:04:48.400
<v Speaker 5>bit joe that we've never ever since those first flocks

0:04:48.640 --> 0:04:51.920
<v Speaker 5>got sick in twenty twenty two, we have not been

0:04:51.960 --> 0:04:55.240
<v Speaker 5>able to fully rebuild our nation's laying flock before the

0:04:55.279 --> 0:04:58.880
<v Speaker 5>next wave of bird flu starts. So right now, what

0:04:59.040 --> 0:05:03.520
<v Speaker 5>we know to be true is it's endemic in several environments.

0:05:03.640 --> 0:05:07.960
<v Speaker 5>We know that we've had wildlife services out trapping sparrows

0:05:07.960 --> 0:05:12.520
<v Speaker 5>and pigeons and vermin and ground squirrels, those kind of things,

0:05:12.520 --> 0:05:15.680
<v Speaker 5>and it's all testing positive for bird flu. So it's

0:05:15.760 --> 0:05:19.080
<v Speaker 5>now endemic in our environment, and it's something that you know,

0:05:19.120 --> 0:05:21.680
<v Speaker 5>the pressure to get inside the barns where the chickens

0:05:21.720 --> 0:05:24.560
<v Speaker 5>are is the twenty four to seven three sixty five pressure.

0:05:25.120 --> 0:05:27.719
<v Speaker 2>So on this note, this is basically my question. Egg

0:05:27.800 --> 0:05:31.320
<v Speaker 2>prices have come down a lot. Why exactly is that

0:05:31.400 --> 0:05:33.599
<v Speaker 2>if bird flu is still with us, if we haven't

0:05:33.640 --> 0:05:38.039
<v Speaker 2>really rebuilt the nation's chicken supply, is it down to

0:05:38.240 --> 0:05:41.279
<v Speaker 2>demand destruction and eggs just getting too expensive or is

0:05:41.320 --> 0:05:44.760
<v Speaker 2>it all the eggs we started importing? What exactly accounts

0:05:44.760 --> 0:05:46.000
<v Speaker 2>for the big fallen.

0:05:45.720 --> 0:05:48.440
<v Speaker 5>Price Tracy, I'm not an economist, but I will tell

0:05:48.440 --> 0:05:51.240
<v Speaker 5>you that the high prices did cause some people to

0:05:51.240 --> 0:05:54.640
<v Speaker 5>seek alternatives for breakfast, whether it's yogurt and berries or

0:05:55.279 --> 0:05:58.159
<v Speaker 5>you know, peanut butter on some toast. And we've also

0:05:59.040 --> 0:06:03.039
<v Speaker 5>had eggs allowed in from other countries that have taken

0:06:03.080 --> 0:06:07.760
<v Speaker 5>over some of the industrial needs. And so we also

0:06:08.320 --> 0:06:13.960
<v Speaker 5>traditionally in the summertime, egg prices are softer because of

0:06:14.000 --> 0:06:17.000
<v Speaker 5>a lessing in demand. People just don't have the same

0:06:17.080 --> 0:06:19.279
<v Speaker 5>routines in the summertime where they get up and eat

0:06:19.279 --> 0:06:21.479
<v Speaker 5>a hot breakfast before heading out the door.

0:06:22.000 --> 0:06:23.560
<v Speaker 3>I have to say, I just find this to be

0:06:23.600 --> 0:06:27.640
<v Speaker 3>a very disturbing, like a deeply disturbing story about the

0:06:27.720 --> 0:06:31.320
<v Speaker 3>US economy or something about the US, which is that

0:06:31.440 --> 0:06:33.479
<v Speaker 3>you look at this chart and I extended it going

0:06:33.520 --> 0:06:37.040
<v Speaker 3>back further, and you just have this very quiet, sideways

0:06:37.120 --> 0:06:39.880
<v Speaker 3>line in egg prices that moves around very little bit.

0:06:39.920 --> 0:06:42.479
<v Speaker 3>There are a couple of modest spikes, and then in

0:06:42.560 --> 0:06:46.000
<v Speaker 3>the last few years there's been the surge. And so

0:06:46.120 --> 0:06:48.120
<v Speaker 3>even with this big price drop has come down and

0:06:48.160 --> 0:06:52.640
<v Speaker 3>you mentioned that it's become endemic, Like is it a

0:06:52.680 --> 0:06:56.480
<v Speaker 3>policy failure? Is there something we could substantively do different?

0:06:56.920 --> 0:07:00.240
<v Speaker 3>And in your view, is there any prospect for like

0:07:00.600 --> 0:07:04.040
<v Speaker 3>a twenty thirteen style supply and demand equation.

0:07:04.680 --> 0:07:06.119
<v Speaker 4>Joe, We'd like to have nothing better.

0:07:06.720 --> 0:07:09.120
<v Speaker 5>We can protect our flocks, and I'm just going to

0:07:09.160 --> 0:07:13.400
<v Speaker 5>say we're very, very frustrated right now. Today, our country

0:07:13.440 --> 0:07:19.600
<v Speaker 5>manufactures vaccine for poultry to protect them against avian flu,

0:07:19.800 --> 0:07:20.720
<v Speaker 5>and we ship it.

0:07:20.640 --> 0:07:23.800
<v Speaker 4>To countries in Europe and other places.

0:07:23.880 --> 0:07:27.400
<v Speaker 5>So we're making the vaccine here every day, and we're

0:07:27.400 --> 0:07:31.720
<v Speaker 5>protecting flocks in other countries. We've been unable to access

0:07:31.800 --> 0:07:34.480
<v Speaker 5>that same vaccine. I think we have it caught up

0:07:34.520 --> 0:07:38.760
<v Speaker 5>in some kind of bureaucratic merry go round, and we

0:07:38.840 --> 0:07:41.120
<v Speaker 5>just can't seem to get it pushed over the fence line.

0:07:41.160 --> 0:07:45.360
<v Speaker 5>I know that we have industry officials meeting with the USDA,

0:07:45.880 --> 0:07:48.720
<v Speaker 5>but I think it's going to come down to President

0:07:48.720 --> 0:07:50.600
<v Speaker 5>Trump is going to have to say, we want this

0:07:50.800 --> 0:07:54.000
<v Speaker 5>nonsense to stop and we want to start vaccining these flocks.

0:07:54.480 --> 0:07:58.040
<v Speaker 2>Has the Trump administration done anything in terms of bird flu,

0:07:58.120 --> 0:08:01.360
<v Speaker 2>because I know Trump has talked about vices and taking

0:08:01.400 --> 0:08:06.400
<v Speaker 2>credit for it, but I've been having difficulty identifying specific

0:08:06.440 --> 0:08:10.160
<v Speaker 2>policies or changes that they've actually done since January.

0:08:10.880 --> 0:08:14.640
<v Speaker 5>Yes, very much. They've become involved. They allocated I think

0:08:14.680 --> 0:08:18.880
<v Speaker 5>it was eight hundred million dollars towards different mitigation, you know,

0:08:18.880 --> 0:08:23.880
<v Speaker 5>biosecurity programs, research and such like that. But there needs

0:08:23.880 --> 0:08:27.240
<v Speaker 5>to be no more research on vaccine. It's available right now,

0:08:27.880 --> 0:08:31.120
<v Speaker 5>and basically it's being held up because of the meat

0:08:31.160 --> 0:08:35.160
<v Speaker 5>bird industry that doesn't want to vaccinate their flocks.

0:08:35.200 --> 0:08:37.880
<v Speaker 2>Right because then they can't export them to certain countries

0:08:37.880 --> 0:08:39.520
<v Speaker 2>that don't allow vaccinated birds.

0:08:39.679 --> 0:08:44.240
<v Speaker 5>Yeah, they cannot export their surpluses to other countries if

0:08:44.360 --> 0:08:46.840
<v Speaker 5>they were locked out of those markets because they were

0:08:46.960 --> 0:08:47.960
<v Speaker 5>vaccinating their birds.

0:08:48.120 --> 0:08:50.520
<v Speaker 3>This is such an amazing example of some of the

0:08:50.559 --> 0:08:55.000
<v Speaker 3>pickles of international trade. It's like we sell vaccines abroad

0:08:55.440 --> 0:08:59.080
<v Speaker 3>so that other countries can you avoid the bird flu

0:08:59.160 --> 0:09:01.520
<v Speaker 3>for eggs, and then we don't want to use it,

0:09:01.600 --> 0:09:04.040
<v Speaker 3>not because the eggs, but because those countries don't want

0:09:04.040 --> 0:09:08.080
<v Speaker 3>to take vaccinated chicken. Before we get into what happens

0:09:08.080 --> 0:09:10.520
<v Speaker 3>now in terms of rebuilding the flock, can you just

0:09:10.640 --> 0:09:14.080
<v Speaker 3>walk us through a little bit more the last several weeks,

0:09:14.080 --> 0:09:16.920
<v Speaker 3>like when did you realize, Like what is the moment

0:09:16.960 --> 0:09:19.720
<v Speaker 3>where you realize you have to do a massive call in.

0:09:19.800 --> 0:09:20.440
<v Speaker 4>What's that like.

0:09:21.080 --> 0:09:23.480
<v Speaker 5>Well, we started to see a few sak chickens on

0:09:23.760 --> 0:09:28.240
<v Speaker 5>May fourteenth, and you know, it wasn't a big increase,

0:09:28.600 --> 0:09:30.440
<v Speaker 5>and so we didn't think too much about it. On

0:09:30.480 --> 0:09:33.880
<v Speaker 5>May fifteenth, we saw a bigger increase. We took swabs

0:09:33.920 --> 0:09:36.960
<v Speaker 5>of the sak chickens down to the University of Arizona.

0:09:37.040 --> 0:09:40.559
<v Speaker 5>Their lab detected bird flu on the sixteenth, and then

0:09:40.600 --> 0:09:44.920
<v Speaker 5>we've been in a massive operation to depopulate our farms

0:09:44.960 --> 0:09:45.839
<v Speaker 5>ever since then.

0:09:46.520 --> 0:09:49.760
<v Speaker 2>Do you have any idea of how the flu got

0:09:49.760 --> 0:09:52.040
<v Speaker 2>in because I know you had a lot of protective

0:09:52.080 --> 0:09:56.240
<v Speaker 2>measures in place, including laser beams to scare away wild

0:09:56.280 --> 0:09:59.200
<v Speaker 2>birds and things like that. What's your theory for how

0:09:59.320 --> 0:10:00.280
<v Speaker 2>the chickens got thick?

0:10:01.080 --> 0:10:01.440
<v Speaker 4>Tracy?

0:10:01.520 --> 0:10:04.280
<v Speaker 5>I don't know why the government wants to say this

0:10:04.480 --> 0:10:07.760
<v Speaker 5>virus is not airborne. But it is airborne. We didn't

0:10:07.840 --> 0:10:11.360
<v Speaker 5>track this in on someone's shoe. We didn't have a

0:10:11.400 --> 0:10:14.440
<v Speaker 5>wild bird that was sick get into one of the barns.

0:10:14.640 --> 0:10:18.520
<v Speaker 5>That's just not happening. What happens is it's airborne. It

0:10:18.600 --> 0:10:21.440
<v Speaker 5>rides in on a dust particle, and you know these

0:10:21.480 --> 0:10:23.320
<v Speaker 5>barns we have to ventilate and we have to bring

0:10:23.320 --> 0:10:25.280
<v Speaker 5>in fresh air for the birds to breathe, and there's

0:10:25.360 --> 0:10:30.160
<v Speaker 5>just no way to filter that kind of volume at

0:10:30.320 --> 0:10:32.079
<v Speaker 5>that kind of filtration level.

0:10:32.200 --> 0:10:34.439
<v Speaker 4>So that's why we need a vaccine.

0:10:34.480 --> 0:10:39.480
<v Speaker 5>There's no mechanical ways left that our industry has not

0:10:39.679 --> 0:10:42.199
<v Speaker 5>tried to keep the virus on the outside.

0:10:42.600 --> 0:10:46.680
<v Speaker 3>Talk to us about the process of rebuilding a flock

0:10:47.160 --> 0:10:49.080
<v Speaker 3>step by step, what do you actually have to do

0:10:49.120 --> 0:10:50.080
<v Speaker 3>and how long does that take?

0:10:50.679 --> 0:10:56.280
<v Speaker 5>Well, generally speaking, our replacement flocks are geared to replace

0:10:56.400 --> 0:10:59.880
<v Speaker 5>our flock every twenty months. So for us, it's roughly

0:11:00.040 --> 0:11:02.520
<v Speaker 5>three hundred thousand birds a month that we bring in

0:11:02.679 --> 0:11:06.360
<v Speaker 5>and we grow to adult size to put in the

0:11:06.800 --> 0:11:10.360
<v Speaker 5>in the layer barns. That's a staggered five percent per

0:11:10.400 --> 0:11:11.640
<v Speaker 5>month for twenty months.

0:11:11.360 --> 0:11:13.000
<v Speaker 4>To get our flosh replaced.

0:11:13.040 --> 0:11:17.160
<v Speaker 5>So when we've lost everything basically within a two week

0:11:17.280 --> 0:11:20.000
<v Speaker 5>time span, it's still going to take us twenty months

0:11:20.040 --> 0:11:22.840
<v Speaker 5>totally rebuild that flock. We're going to be suffering through

0:11:22.880 --> 0:11:24.160
<v Speaker 5>this for quite a while.

0:11:39.440 --> 0:11:43.320
<v Speaker 2>Okay, So I believe you get compensated for chickens that

0:11:43.400 --> 0:11:46.840
<v Speaker 2>you have to call, although maybe it changes when we're talking.

0:11:46.960 --> 0:11:50.680
<v Speaker 2>You know, six million chickens versus one hundred thousand or

0:11:50.679 --> 0:11:54.160
<v Speaker 2>something like that. And I know that you've said that

0:11:54.200 --> 0:11:57.080
<v Speaker 2>you're not going to be able to fulfill your contracts

0:11:57.120 --> 0:12:00.680
<v Speaker 2>with customers going forward because of all of this. Talk

0:12:00.720 --> 0:12:03.839
<v Speaker 2>to us about the financial position that this leaves you in.

0:12:04.320 --> 0:12:06.840
<v Speaker 5>Well, we're part of an egg marketing cooperative, so we

0:12:06.920 --> 0:12:09.520
<v Speaker 5>do have access to some of our other members' eggs,

0:12:09.520 --> 0:12:11.680
<v Speaker 5>and that's what we're doing right now and bringing those

0:12:11.720 --> 0:12:15.400
<v Speaker 5>eggs in and making sure that the store shelves stay full.

0:12:16.040 --> 0:12:20.160
<v Speaker 5>With regards to the compensation from the government, we get paid,

0:12:20.640 --> 0:12:23.120
<v Speaker 5>not just we, but anyone in our industry gets paid

0:12:23.160 --> 0:12:28.240
<v Speaker 5>to depopulate the flock, clean the facilities, eliminate the virus,

0:12:28.880 --> 0:12:31.719
<v Speaker 5>and they approximate the costs of the chicken to repopulate

0:12:31.760 --> 0:12:35.160
<v Speaker 5>that they don't compensate you for the loss of income.

0:12:35.559 --> 0:12:37.320
<v Speaker 4>Like again, in our instance.

0:12:37.000 --> 0:12:40.439
<v Speaker 5>We will be below full production for the next better

0:12:40.440 --> 0:12:41.320
<v Speaker 5>part of two years.

0:12:41.640 --> 0:12:43.920
<v Speaker 3>Well, how are you going to as a business? What

0:12:44.040 --> 0:12:46.199
<v Speaker 3>is that going to mean when you think about the

0:12:46.240 --> 0:12:48.600
<v Speaker 3>future of the business. But the short term to have

0:12:48.840 --> 0:12:50.480
<v Speaker 3>so many months of lost income.

0:12:50.520 --> 0:12:53.040
<v Speaker 5>Now, well, thankfully we have you know, we have good

0:12:53.080 --> 0:12:57.079
<v Speaker 5>relations with our banks, We have some resources of our

0:12:57.120 --> 0:12:59.040
<v Speaker 5>own and so we feel like we're going to be

0:12:59.640 --> 0:13:01.320
<v Speaker 5>able to to take the time.

0:13:01.120 --> 0:13:03.160
<v Speaker 4>To rebuild those flocks and such.

0:13:03.240 --> 0:13:06.600
<v Speaker 5>But you know, I think the challenge that we're going

0:13:06.679 --> 0:13:10.040
<v Speaker 5>to have is rehiring the people that we need that

0:13:10.120 --> 0:13:12.839
<v Speaker 5>have been trained. Some of them been with us as

0:13:12.840 --> 0:13:15.680
<v Speaker 5>long as I've been here, and so that loss of

0:13:15.720 --> 0:13:18.320
<v Speaker 5>institutional knowledge is well, we're going to have the hardest

0:13:18.360 --> 0:13:19.600
<v Speaker 5>thing to try to replace.

0:13:20.800 --> 0:13:23.240
<v Speaker 2>So I know you're not an economist and you're not

0:13:23.280 --> 0:13:26.120
<v Speaker 2>in the business of making price forecasts, but do you

0:13:26.160 --> 0:13:28.400
<v Speaker 2>have a sense of what's going to happen to egg

0:13:28.440 --> 0:13:31.400
<v Speaker 2>prices from here? Not just because of the loss of

0:13:31.559 --> 0:13:34.640
<v Speaker 2>you know, your millions of chickens, but also because it

0:13:34.760 --> 0:13:37.840
<v Speaker 2>really seems like bird flu is, as you said, becoming

0:13:37.960 --> 0:13:39.160
<v Speaker 2>endemic in the US.

0:13:39.720 --> 0:13:43.239
<v Speaker 5>Well, there's two things. I mean, there's supply and there's demand.

0:13:43.440 --> 0:13:47.080
<v Speaker 5>And so we are bringing eggs in from other countries.

0:13:47.120 --> 0:13:49.840
<v Speaker 5>That's helping on the supply side of things. You know.

0:13:49.920 --> 0:13:54.160
<v Speaker 5>As kind of an interesting point, we are bringing eggs

0:13:54.200 --> 0:13:57.960
<v Speaker 5>in from Mexico where they routinely do vaccinate their flocks,

0:13:58.440 --> 0:14:01.599
<v Speaker 5>and we're bringing those eggs in. So that's one of

0:14:01.640 --> 0:14:03.400
<v Speaker 5>the ways we're going to be able to address this.

0:14:04.000 --> 0:14:07.240
<v Speaker 5>But frankly, you guys, we're not going to have a

0:14:07.400 --> 0:14:11.080
<v Speaker 5>steady supply of eggs that we've enjoyed, you know, for

0:14:11.120 --> 0:14:14.480
<v Speaker 5>the past one hundred years if we don't stop the

0:14:14.520 --> 0:14:17.920
<v Speaker 5>spread of bird flu. And so the only way to

0:14:17.960 --> 0:14:20.720
<v Speaker 5>do that now that this has become you know, something

0:14:20.760 --> 0:14:23.160
<v Speaker 5>we live with all the time, is to vaccinate our

0:14:23.200 --> 0:14:25.040
<v Speaker 5>flocks so we can protect them.

0:14:25.560 --> 0:14:28.600
<v Speaker 3>Does everyone else in the world use chicken vaccines at

0:14:28.600 --> 0:14:28.960
<v Speaker 3>this point?

0:14:29.360 --> 0:14:31.640
<v Speaker 5>No, I don't think everyone does. I know that there's

0:14:31.680 --> 0:14:35.359
<v Speaker 5>several European countries that do. I know that Mexico vaccinates

0:14:35.360 --> 0:14:38.680
<v Speaker 5>their flocks, and I think it's gaining wider and wider

0:14:38.720 --> 0:14:40.600
<v Speaker 5>spread acceptance every place.

0:14:41.160 --> 0:14:42.960
<v Speaker 3>Okay, you have you know, now there are sort of

0:14:43.120 --> 0:14:46.520
<v Speaker 3>multiple years of this, and even the re establishing of

0:14:46.560 --> 0:14:49.560
<v Speaker 3>the flock feels like it's going to be a risky process,

0:14:49.640 --> 0:14:52.240
<v Speaker 3>right because you're going to spend you know, maybe twenty

0:14:52.280 --> 0:14:55.560
<v Speaker 3>months or close to two years getting back to full capacity,

0:14:55.600 --> 0:14:59.160
<v Speaker 3>but then of course the flu could strike again. Do

0:14:59.240 --> 0:15:01.200
<v Speaker 3>you think that, like, when we think about the sort

0:15:01.240 --> 0:15:03.480
<v Speaker 3>of sustained stay rate of where egg prices are going

0:15:03.520 --> 0:15:06.440
<v Speaker 3>to go, maybe it's not you because you have scale

0:15:06.440 --> 0:15:08.680
<v Speaker 3>and you have money, and you have good access to capital.

0:15:09.160 --> 0:15:13.960
<v Speaker 3>But that essentially you see farmers sort of depart the

0:15:14.000 --> 0:15:17.520
<v Speaker 3>egg game, depart the egg industry because it appears and

0:15:17.560 --> 0:15:19.720
<v Speaker 3>maybe accurately, to be higher risk than it used to

0:15:19.800 --> 0:15:22.880
<v Speaker 3>be due to the disease being endemic, and then they's

0:15:22.920 --> 0:15:26.040
<v Speaker 3>just sort of, you know, less competitive pressure, and you know,

0:15:26.080 --> 0:15:28.320
<v Speaker 3>competitive pressure drives prices lower.

0:15:29.000 --> 0:15:32.080
<v Speaker 5>Well, so I think we're seeing it already. There's been

0:15:32.160 --> 0:15:35.160
<v Speaker 5>lots of farms in the last three years that have

0:15:35.320 --> 0:15:39.480
<v Speaker 5>sold out to companies that want to continue to shoulder

0:15:39.520 --> 0:15:41.360
<v Speaker 5>this kind of risk, and I think that we're going

0:15:41.400 --> 0:15:43.840
<v Speaker 5>to continue to see that happen. You know, the egg

0:15:43.840 --> 0:15:47.120
<v Speaker 5>industry by and large are all family owned farms, and

0:15:47.480 --> 0:15:51.760
<v Speaker 5>so you know, it does test one's commitment when you

0:15:51.800 --> 0:15:54.320
<v Speaker 5>know we cannot control our future.

0:15:55.280 --> 0:15:57.440
<v Speaker 2>All right, Glenn, we're going to leave it there, But

0:15:57.520 --> 0:16:00.280
<v Speaker 2>thank you so much for coming on all thoughts again,

0:16:00.480 --> 0:16:03.760
<v Speaker 2>and as I said, I wish it were under better circumstances,

0:16:03.760 --> 0:16:06.000
<v Speaker 2>but we appreciate you explaining everything.

0:16:05.640 --> 0:16:07.560
<v Speaker 4>That's happened, Tracy.

0:16:07.600 --> 0:16:10.400
<v Speaker 5>I appreciate being able to kind of tell our story

0:16:10.400 --> 0:16:13.000
<v Speaker 5>and try to keep this in the public eye.

0:16:13.080 --> 0:16:14.000
<v Speaker 4>We do need a solution.

0:16:14.360 --> 0:16:17.400
<v Speaker 2>Thank you, Glenn. That was great as always, and as

0:16:17.440 --> 0:16:20.480
<v Speaker 2>I said, really appreciate you taking the time given everything.

0:16:20.200 --> 0:16:20.760
<v Speaker 6>That's going on.

0:16:21.280 --> 0:16:31.880
<v Speaker 5>Okay, Hey, thanks, guys, have a good day.

0:16:37.520 --> 0:16:40.880
<v Speaker 2>So Joe obviously appreciate getting that update around the business

0:16:40.920 --> 0:16:44.120
<v Speaker 2>from Glenn, because, as I said, eggs and bird flu

0:16:44.280 --> 0:16:47.040
<v Speaker 2>have to some extent fallen out of the headlines, but

0:16:47.080 --> 0:16:50.000
<v Speaker 2>like they're still going on in the background, and it's

0:16:50.040 --> 0:16:54.720
<v Speaker 2>still a really interesting case study in industry economics. As

0:16:54.760 --> 0:16:58.000
<v Speaker 2>you pointed out, prices are just more volatile than they've

0:16:58.040 --> 0:17:00.720
<v Speaker 2>been for much of history. And this is something that

0:17:00.760 --> 0:17:05.480
<v Speaker 2>you find, I think increasingly, and especially in agriculture, where

0:17:05.520 --> 0:17:08.960
<v Speaker 2>you have these big one off shocks, it's really really

0:17:09.000 --> 0:17:11.440
<v Speaker 2>difficult for the market to recalibrate itself.

0:17:11.680 --> 0:17:15.520
<v Speaker 3>Yeah, it seems very plausible to me that this could

0:17:15.600 --> 0:17:19.040
<v Speaker 3>just be the end of cheap eggs, right because you know,

0:17:19.119 --> 0:17:22.760
<v Speaker 3>you have this consolidation, you have this persistent added cost

0:17:22.880 --> 0:17:25.600
<v Speaker 3>because of the risk, et cetera. So even when we

0:17:25.640 --> 0:17:28.720
<v Speaker 3>get this decline, there's still much more expensive than they

0:17:29.000 --> 0:17:32.359
<v Speaker 3>used to be, you have less competitive pressure, et cetera.

0:17:32.640 --> 0:17:35.000
<v Speaker 3>And I find this to be like deeply disturbing, Like

0:17:35.040 --> 0:17:37.680
<v Speaker 3>this to me seems like a very crystal clear example

0:17:38.160 --> 0:17:41.439
<v Speaker 3>of sort of society going backwards. And the reason I

0:17:41.440 --> 0:17:44.240
<v Speaker 3>think eggs are important is because arguably sort of cheaper

0:17:44.240 --> 0:17:47.119
<v Speaker 3>and cheaper protein is the hallmark of a sort of

0:17:47.200 --> 0:17:50.040
<v Speaker 3>rising standard of living. This really feels to me like

0:17:50.280 --> 0:17:53.240
<v Speaker 3>we're going backwards as a society when this is happening.

0:17:53.400 --> 0:17:56.320
<v Speaker 2>Well, and when this happens, it also becomes harder and

0:17:56.359 --> 0:17:59.000
<v Speaker 2>harder to, I guess, gauge the future of the business

0:17:59.359 --> 0:18:02.160
<v Speaker 2>and figure out how much you're supposed to invest in it. Right,

0:18:02.200 --> 0:18:04.800
<v Speaker 2>if you're getting these wild swings in prices, and then

0:18:04.840 --> 0:18:07.520
<v Speaker 2>the risk is you know, you have overcapacity and then

0:18:07.600 --> 0:18:10.280
<v Speaker 2>under capacity and then over capacity, and it just keeps

0:18:10.320 --> 0:18:11.320
<v Speaker 2>oscillating forever.

0:18:11.560 --> 0:18:14.280
<v Speaker 3>And like the essence of like things getting cheaper over

0:18:14.320 --> 0:18:17.720
<v Speaker 3>time is like sustained competitive pressure. Everyone wants to invest

0:18:17.720 --> 0:18:20.359
<v Speaker 3>and everyone wants to eat each other's margin, right, And

0:18:20.440 --> 0:18:23.159
<v Speaker 3>that's like, you know, when capitalism is working at the best,

0:18:23.320 --> 0:18:25.120
<v Speaker 3>and you're not going to get that at a time

0:18:25.119 --> 0:18:28.399
<v Speaker 3>when you have fewer and fewer participants and more and

0:18:28.440 --> 0:18:30.960
<v Speaker 3>more reasons just not to even take the risk of

0:18:31.000 --> 0:18:34.200
<v Speaker 3>the first place. And it clearly is one of these situations,

0:18:34.200 --> 0:18:37.960
<v Speaker 3>as Glenn was emphasizing, where you have to have a quote,

0:18:38.000 --> 0:18:40.720
<v Speaker 3>you know, a public health response, and the market isn't

0:18:40.720 --> 0:18:43.240
<v Speaker 3>going to do it on its own in terms of

0:18:43.520 --> 0:18:46.600
<v Speaker 3>either eliminating bird flu or eliminating the risk of bird flu,

0:18:46.920 --> 0:18:49.000
<v Speaker 3>and so you need to have that centralizing force, and

0:18:49.119 --> 0:18:51.080
<v Speaker 3>right now it doesn't seem like it's there.

0:18:51.320 --> 0:18:54.720
<v Speaker 2>My analog for all of this is swine fever in China.

0:18:54.800 --> 0:18:57.240
<v Speaker 2>There was a really big outbreak there. Did you know

0:18:57.800 --> 0:19:01.639
<v Speaker 2>that China lost thirty millions small to medium sized pig

0:19:01.680 --> 0:19:04.880
<v Speaker 2>farms between two thousand and seven and late twenty twenty four.

0:19:05.040 --> 0:19:08.359
<v Speaker 3>They probably had like half a billion of them, right like, no, yeah, yeah, yeah, no.

0:19:08.440 --> 0:19:09.440
<v Speaker 4>It is a really.

0:19:09.480 --> 0:19:11.959
<v Speaker 2>Illustrate it's the point about the big getting bigger. And

0:19:12.000 --> 0:19:15.240
<v Speaker 2>in fact, the share of small pig farmers in the

0:19:15.280 --> 0:19:18.240
<v Speaker 2>market went from like seventy four percent in two thousand

0:19:18.280 --> 0:19:20.640
<v Speaker 2>and seven to less than a third in twenty twenty three.

0:19:20.840 --> 0:19:23.080
<v Speaker 3>It does seem in the on the flip side, it

0:19:23.119 --> 0:19:25.760
<v Speaker 3>does seem like this is the story with agriculture period.

0:19:25.800 --> 0:19:29.520
<v Speaker 3>And I recall our conversation with the Lentil King talking

0:19:29.560 --> 0:19:31.960
<v Speaker 3>about how like, you know, even what we might think

0:19:32.000 --> 0:19:35.520
<v Speaker 3>of as a quote family farm unquote in Canada might

0:19:35.560 --> 0:19:38.160
<v Speaker 3>have you know, hundreds of thousands of acres at this point.

0:19:38.160 --> 0:19:39.679
<v Speaker 6>I think it's a little different in China.

0:19:39.800 --> 0:19:41.480
<v Speaker 2>But you see the point I'm making.

0:19:41.640 --> 0:19:44.000
<v Speaker 3>Yeah, yeah, No, I definitely see the point that you're making.

0:19:44.080 --> 0:19:46.960
<v Speaker 3>It just seems like there's so many forces that are

0:19:46.960 --> 0:19:51.679
<v Speaker 3>conspiring towards this, the big getting bigger within agriculture, and

0:19:51.720 --> 0:19:54.120
<v Speaker 3>when you look at the pricing and anyway, I find

0:19:54.119 --> 0:19:57.520
<v Speaker 3>it like deeply worrying. Its like the trajectory of society

0:19:57.560 --> 0:19:58.880
<v Speaker 3>that we can't get this under control.

0:19:59.480 --> 0:20:01.719
<v Speaker 2>Well, happy note, shall we leave it there?

0:20:01.800 --> 0:20:02.520
<v Speaker 4>Let's leave it there.

0:20:02.680 --> 0:20:05.000
<v Speaker 2>This has been another episode of the Oud Lots podcast.

0:20:05.080 --> 0:20:07.960
<v Speaker 2>I'm Tracy Alloway. You can follow me at Tracy Alloway.

0:20:08.040 --> 0:20:10.560
<v Speaker 3>And I'm Jill Wisenthal. You can follow me at the Stalwart.

0:20:10.640 --> 0:20:13.879
<v Speaker 3>Follow our producers Kerman Rodriguez at Kerman Erman, dash Ol

0:20:13.880 --> 0:20:18.000
<v Speaker 3>Bennett at Dashbot, and Kilbrooks and Kilbrooks. For more Oddlots content,

0:20:18.040 --> 0:20:20.119
<v Speaker 3>go to Bloomberg dot com slash odd Lots. We have

0:20:20.119 --> 0:20:22.359
<v Speaker 3>a daily newsletter and all of our episodes, and you

0:20:22.400 --> 0:20:24.359
<v Speaker 3>can chat about these topics twenty four to seven in

0:20:24.480 --> 0:20:27.520
<v Speaker 3>our discord Discord dot gg slash.

0:20:27.160 --> 0:20:30.119
<v Speaker 2>Odlines and if you enjoy odd Lots If you like

0:20:30.160 --> 0:20:32.520
<v Speaker 2>it when we catch up with egg Farmers, then please

0:20:32.600 --> 0:20:35.640
<v Speaker 2>leave us a positive review on your favorite podcast platform.

0:20:35.760 --> 0:20:36.760
<v Speaker 6>And remember, if you.

0:20:36.720 --> 0:20:39.359
<v Speaker 2>Are a Bloomberg subscriber, you can listen to all of

0:20:39.400 --> 0:20:42.480
<v Speaker 2>our episodes absolutely ad free. All you need to do

0:20:42.720 --> 0:20:45.600
<v Speaker 2>is find the Bloomberg channel on Apple Podcasts and follow

0:20:45.640 --> 0:20:46.600
<v Speaker 2>the instructions there.

0:20:47.080 --> 0:21:00.680
<v Speaker 6>Thanks for listening

0:21:04.680 --> 0:21:04.720
<v Speaker 4>In