WEBVTT - Betsy Babcock on The Changing American Egg Industry

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<v Speaker 1>and that's a Bloomberg business flash. You're listening to taking

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<v Speaker 1>stock with pim Box and Kathleen Hayes on Bloomberg Radio.

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<v Speaker 1>The egg industry, the egg industry is a ten billion

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<v Speaker 1>dollar a year business and just in April alone, more

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<v Speaker 1>than seven billion eggs were produced in the United States.

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<v Speaker 1>But what kind of eggs? Well, here to tell us

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<v Speaker 1>is the co founder of Handsome Brooke Farm, Betsy Babcock,

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<v Speaker 1>and she joins us now, Betsy, thanks very much for

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<v Speaker 1>being with us. It's my pleasure. Thank you. Before we

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<v Speaker 1>get into the details of comparing one kind of egg

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<v Speaker 1>production to another, I'm just warning if you could give

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<v Speaker 1>us some background and explain how did you become a

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<v Speaker 1>farmer an egg farmer? I would say that I am

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<v Speaker 1>the accidental eggs farmer. We started um Handsome Brook Farm

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<v Speaker 1>back in two thousand and seven as a farm state

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<v Speaker 1>that in breakfast at Upstate New York, and we were

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<v Speaker 1>about three and a half hours from New York City,

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<v Speaker 1>and our customers who would come stay with us were

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<v Speaker 1>raving about our eggs. And what we learned quickly was

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<v Speaker 1>what made our eggs different from what they could get

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<v Speaker 1>in the grocery store was that our chickens were actually outdoors,

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<v Speaker 1>eating bugs and grass and outside, and that makes a

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<v Speaker 1>huge difference in terms of quality and taste in the egg.

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<v Speaker 1>And so from two thousand and seven until now, we

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<v Speaker 1>have formed a model where we work with other small

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<v Speaker 1>farms who produce eggs with chickens that are going outside

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<v Speaker 1>eating bugs, and market it at Handsome Brook Farm past

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<v Speaker 1>your raised eggs. So it's been very exciting. Matt Miller

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<v Speaker 1>here joining pen to day. I love eggs, and when

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<v Speaker 1>I go to the store, I want to buy eggs

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<v Speaker 1>that aren't from chickens who suffered some kind of horrible

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<v Speaker 1>baraca kind of life, you know. So I always try

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<v Speaker 1>and get eggs that say they're organic, that their cage free,

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<v Speaker 1>and that they're free roaming. I imagine my chickens walking

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<v Speaker 1>around and pecking it stuff. Those chickens you're telling me

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<v Speaker 1>are actually raised in a barn crowded in with fifty

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<v Speaker 1>two hundred thousand other chickens. Is that true? That is

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<v Speaker 1>corrected so many cases in a cage free environment. Even

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<v Speaker 1>though it's sounds perhaps like the chickens are going outside

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<v Speaker 1>in being chicken like outside, unfortunately the case in most

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<v Speaker 1>cases that those chickens are confined with about one square

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<v Speaker 1>foot of space inside and no u no outdoor engagement

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<v Speaker 1>at all. And the same can go for free range

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<v Speaker 1>is a very broad term. Pre range chickens may never

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<v Speaker 1>step foot outside, or in some better cases, they may

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<v Speaker 1>have a little bit of outside area. But there's no

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<v Speaker 1>legal definition or requirement for a free range chicken to

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<v Speaker 1>spend outside on pasture. So your chickens are pasture, your

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<v Speaker 1>eggs are pasture raised. That means your chickens are actually

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<v Speaker 1>walking around outside in the sunlight. Is there some kind

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<v Speaker 1>of regulation um that guarantees me when I go to

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<v Speaker 1>a store and I see pasture raised that I know

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<v Speaker 1>that this chicken lived a pretty decent life. There's no

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<v Speaker 1>legal definition or no federal regulation for pasture raised. What

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<v Speaker 1>we do now, we started doing this in this year,

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<v Speaker 1>actually is participating in the American Humane certification process. And

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<v Speaker 1>so when you see a pasture raised egg, that has

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<v Speaker 1>an American Humane logo on it. That means that they

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<v Speaker 1>are meeting specific outdoor requirements and so you can have

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<v Speaker 1>some assurance that those chickens are actually going outside on vegetation,

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<v Speaker 1>not just on a concrete patio, but outside on vegetation. Betsy,

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<v Speaker 1>what's the difference between pasture raised conventional eggs and pasture

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<v Speaker 1>raised organic eggs? For we, we carry both. We offer both.

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<v Speaker 1>Most of the eggs that we sell our pasture raised organic.

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<v Speaker 1>We have some that are pastor raised conventional, which is

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<v Speaker 1>actually how we started um. And the difference for us

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<v Speaker 1>is really the pastures themselves are both not sprayed and

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<v Speaker 1>could qualify, you know, as an organically grown pasture. There's

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<v Speaker 1>no sprayer, herbicides. But the difference is the feed that

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<v Speaker 1>they get, because even chickens that are outside on pasture

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<v Speaker 1>need to have some supplemental feed. So for pasture raised organic,

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<v Speaker 1>the feed that we provide our chickens is organic feed,

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<v Speaker 1>certified organic feed. For the conventional pasture raised that feed

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<v Speaker 1>is not certified organic. So the differences in the feed.

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<v Speaker 1>What about the price, any any differences in price? Yeah,

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<v Speaker 1>the price for organic again for us runs about fifty

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<v Speaker 1>to seventy a dozen more than the price for the

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<v Speaker 1>conventional and that's because of the difference between the cost

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<v Speaker 1>of the organic feed versus a conventional feed. But one

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<v Speaker 1>one interesting now perhaps is that even though the organic

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<v Speaker 1>pasture raised are a little bit more expensive, most of

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<v Speaker 1>our our sales are the organic. People are willing to

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<v Speaker 1>pay more for pasture raised organic. Yeah. I was gonna

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<v Speaker 1>ask about that. I mean, for me when I go

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<v Speaker 1>to the grocery store, I don't. I mean, I'll pay

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<v Speaker 1>as much as I have to, uh to get that

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<v Speaker 1>image of a chicken getting its beak melted off out

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<v Speaker 1>of my mind. Um, to your customers care, I mean,

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<v Speaker 1>our price is elastic at all, they do care. I

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<v Speaker 1>mean philosophically, we really want to make our eggs as

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<v Speaker 1>affordable as possible for customers, so we do not gouge

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<v Speaker 1>on our pricing to customers. Um. But people are willing

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<v Speaker 1>to pay for the quality and for the animal welfare,

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<v Speaker 1>so they will pay a premium for a pastor raised

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<v Speaker 1>organic egg over a free range or a cage free X.

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<v Speaker 1>I wish you could do it, Bacon. I wish you probably, Betsy. Betsy,

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<v Speaker 1>thanks so much, really appreciate you joining US, and I

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<v Speaker 1>think it's a fascinating topic that a lot of people

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<v Speaker 1>really do care about. So, uh, there you go. Pasture

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<v Speaker 1>raised eggs are the ones that you probably want to get.

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<v Speaker 1>Betsy Babcock is the co founder of Handsome Brook Farm

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<v Speaker 1>and they sell those eggs, and she gave us all

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<v Speaker 1>the info that we probably could have could have learned

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<v Speaker 1>in in at ten minute interview on eggs. Pim This

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<v Speaker 1>is taking Stock. I'm Matt Miller filling in for Kathleen

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<v Speaker 1>Hayes today with PIM Fox. This is Bloomberg coming up

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<v Speaker 1>on taking stock. Bill Fitzpatrick, global equity analyst at Manu

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<v Speaker 1>Life Asset Management, given us his perspective on the Bank

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<v Speaker 1>of Japan and investing in equities outside the United States

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<v Speaker 1>of