1 00:00:10,280 --> 00:00:14,600 Speaker 1: Hello, and welcome to another episode of the Odd Lots Podcast. 2 00:00:14,680 --> 00:00:19,040 Speaker 1: I'm Joe Wisenthal and I'm Tracy Alloway. Tracy Um. You know, 3 00:00:19,079 --> 00:00:23,400 Speaker 1: it feels like to some extent that inflation is abating, 4 00:00:23,720 --> 00:00:26,440 Speaker 1: is fading every time we start a podcast saying that, 5 00:00:26,520 --> 00:00:30,720 Speaker 1: I think we're just chinxing it, but well, we hope 6 00:00:30,760 --> 00:00:33,680 Speaker 1: to be jinxing this one because there is one category 7 00:00:34,159 --> 00:00:37,520 Speaker 1: that of food of goods, that is everyone is talking 8 00:00:37,560 --> 00:00:42,479 Speaker 1: about these days, eggs. Eggs. We are. I am so 9 00:00:42,560 --> 00:00:45,000 Speaker 1: excited to be talking about eggs. There are going to 10 00:00:45,040 --> 00:00:48,040 Speaker 1: be a lot of puns. I have to say. That's 11 00:00:48,080 --> 00:00:50,479 Speaker 1: my my warning for anyone listening to this episode is 12 00:00:50,520 --> 00:00:53,640 Speaker 1: I'm going to crack a bunch of terrible chokes or 13 00:00:53,640 --> 00:00:57,800 Speaker 1: should I say yokes? You want to keep going? You 14 00:00:57,840 --> 00:01:01,160 Speaker 1: want to keep going, Tracy, I'm a real comedian. So 15 00:01:02,080 --> 00:01:04,400 Speaker 1: egg prices are up a lot, and you know it's 16 00:01:04,440 --> 00:01:06,720 Speaker 1: also personal to you because in addition to all these puns, 17 00:01:06,880 --> 00:01:09,400 Speaker 1: you are an aspiring egg farmer, aren't you. I am 18 00:01:09,480 --> 00:01:13,720 Speaker 1: like an armchair chicken breeder, like I would love to 19 00:01:13,840 --> 00:01:16,680 Speaker 1: raise a bunch of backyard chickens one day. I haven't 20 00:01:16,760 --> 00:01:19,119 Speaker 1: yet had the opportunity although now that I have two 21 00:01:19,120 --> 00:01:22,399 Speaker 1: and a half acres in northeast Connecticut, like maybe one 22 00:01:22,480 --> 00:01:25,240 Speaker 1: day I'm getting closer. But yeah, my dream is to 23 00:01:25,720 --> 00:01:28,720 Speaker 1: have a flock of chickens, preferably silky chickens. Have you 24 00:01:28,760 --> 00:01:32,520 Speaker 1: ever seen them? They look like the fluffy little muppets. 25 00:01:32,560 --> 00:01:35,240 Speaker 1: So some silkies and maybe some Easter eggers because they 26 00:01:35,240 --> 00:01:39,320 Speaker 1: produced the really cool looking eggs, and yeah, declare egg independence. 27 00:01:39,400 --> 00:01:42,320 Speaker 1: Just have my own supply of eggs. So how about this. 28 00:01:42,360 --> 00:01:45,480 Speaker 1: I have a good idea for this episode, probably like 29 00:01:45,560 --> 00:01:48,560 Speaker 1: talk for about like five or ten minutes about why 30 00:01:48,640 --> 00:01:51,440 Speaker 1: egg prices are going up, and then in just thirty 31 00:01:51,520 --> 00:01:55,000 Speaker 1: minutes on sort of farming advice. Just sort of like 32 00:01:55,040 --> 00:01:57,680 Speaker 1: a pure agricultural episode. That sounds perfect. Also, you're gonna 33 00:01:57,680 --> 00:01:59,440 Speaker 1: have to include ten minutes for me to just like 34 00:01:59,640 --> 00:02:03,480 Speaker 1: give all the random egg facts that I know. Well, okay, 35 00:02:03,560 --> 00:02:05,720 Speaker 1: maybe we should also let the guests give every random 36 00:02:05,720 --> 00:02:08,480 Speaker 1: eg facts. Okay, okay, if we have to know, Okay, 37 00:02:08,760 --> 00:02:11,720 Speaker 1: eggs have suddenly become a big talking point, and I'm 38 00:02:11,760 --> 00:02:14,760 Speaker 1: a little bit unclear why. Because egg prices have been 39 00:02:14,800 --> 00:02:17,360 Speaker 1: going up for a while. There's been this big outbreak 40 00:02:17,720 --> 00:02:20,639 Speaker 1: of avian flu in the US and elsewhere in the world, 41 00:02:20,720 --> 00:02:23,640 Speaker 1: feed prices have been going up, and so we did see, 42 00:02:23,919 --> 00:02:28,000 Speaker 1: for instance, benchmark egg prices. There is an egg price 43 00:02:28,040 --> 00:02:32,040 Speaker 1: benchmark um go up. I think something like over the 44 00:02:32,080 --> 00:02:34,760 Speaker 1: past year it was like a dollar for a dozen 45 00:02:35,040 --> 00:02:38,040 Speaker 1: Midwest US eggs, and now it's up to more than 46 00:02:38,120 --> 00:02:42,280 Speaker 1: four dollars. Egg c p I, which you can which 47 00:02:42,280 --> 00:02:45,360 Speaker 1: you can measure, is up I think fifty nine percent 48 00:02:46,040 --> 00:02:48,880 Speaker 1: year on year. But it has been happening for a while, 49 00:02:48,919 --> 00:02:51,320 Speaker 1: and yet it seems to have exploded into the public 50 00:02:51,320 --> 00:02:55,079 Speaker 1: consciousness relatively recently. That egg CPI chart is pretty wild. 51 00:02:55,160 --> 00:02:57,720 Speaker 1: We have it on the terminal going back to its 52 00:02:57,720 --> 00:03:00,680 Speaker 1: shooting higher, and I would say egg was kind of 53 00:03:00,720 --> 00:03:04,079 Speaker 1: like gasoline, are one of these highly salient prices that 54 00:03:04,160 --> 00:03:07,760 Speaker 1: people notice in a way they buy them regularly. You know, 55 00:03:07,840 --> 00:03:10,920 Speaker 1: it's like you just know. You probably people have some 56 00:03:11,000 --> 00:03:13,680 Speaker 1: intuitive sense how much they pay for eggs, as opposed 57 00:03:13,720 --> 00:03:15,480 Speaker 1: to I don't know how much they pay for like 58 00:03:15,520 --> 00:03:18,600 Speaker 1: auto insurance. It's something you're exposed to on a relatively 59 00:03:18,600 --> 00:03:22,320 Speaker 1: frequent basis, and it does become personal because the way 60 00:03:22,360 --> 00:03:25,120 Speaker 1: that you buy eggs also impacts the prices you're seeing. 61 00:03:25,160 --> 00:03:27,400 Speaker 1: So if you live out in the country and you're 62 00:03:27,440 --> 00:03:30,600 Speaker 1: buying eggs from a local farmer, the prices might well 63 00:03:31,600 --> 00:03:34,040 Speaker 1: be lower than in the grocery store right now, because 64 00:03:34,040 --> 00:03:38,320 Speaker 1: my understanding is that it's the big, big producers, the supermarkets, 65 00:03:38,480 --> 00:03:41,040 Speaker 1: or the people who supply the supermarkets, who have actually 66 00:03:41,040 --> 00:03:43,520 Speaker 1: been hit the hardest by the flu. All right, well, 67 00:03:43,640 --> 00:03:47,000 Speaker 1: let's let's learn more from our guests. We have I believe, 68 00:03:47,240 --> 00:03:50,320 Speaker 1: the perfect guest to talk about eggs and how to 69 00:03:50,840 --> 00:03:53,360 Speaker 1: how to price them and how to make them. We're 70 00:03:53,360 --> 00:03:55,920 Speaker 1: gonna be speaking with Glenn Hickman. He is the president 71 00:03:56,040 --> 00:04:00,080 Speaker 1: of Hickman's Family Farms, a company that has tenderly and 72 00:04:00,200 --> 00:04:05,040 Speaker 1: chickens producing eggs overall in the company. So, Glenn, thank 73 00:04:05,040 --> 00:04:08,800 Speaker 1: you so much for coming on odd lots my pleasure. 74 00:04:08,800 --> 00:04:11,840 Speaker 1: Thanks for inviting me. Uh you know, before we even 75 00:04:11,880 --> 00:04:13,800 Speaker 1: get into the price of eggs and all that, what 76 00:04:13,840 --> 00:04:17,640 Speaker 1: do you tell us a little bit about Hickman's Family Farms, 77 00:04:17,720 --> 00:04:20,080 Speaker 1: Like how big is it? How does it compare, how 78 00:04:20,120 --> 00:04:23,720 Speaker 1: does it distribute? Like just describe? Why should why should 79 00:04:23,760 --> 00:04:27,000 Speaker 1: we listen to you? Uh? Well, thanks, Joe, It's yeah, 80 00:04:27,600 --> 00:04:30,200 Speaker 1: It's the only job I've ever had. So if I'm 81 00:04:30,200 --> 00:04:32,720 Speaker 1: not very good at it. I can't think about anything else. 82 00:04:33,240 --> 00:04:37,960 Speaker 1: So our our business started. My grandmother had five hundred 83 00:04:38,040 --> 00:04:42,040 Speaker 1: backyard chickens and you know, sold eggs to her neighbors 84 00:04:42,160 --> 00:04:46,040 Speaker 1: off of the back porch. And I'm the third generation 85 00:04:46,120 --> 00:04:49,760 Speaker 1: to run our business along with my siblings, and we've 86 00:04:49,800 --> 00:04:54,200 Speaker 1: expanded from grandma's back porch to a multi state operation. 87 00:04:54,320 --> 00:04:58,440 Speaker 1: We primarily market eggs across the Southwest, from southern Wyoming 88 00:04:58,560 --> 00:05:03,599 Speaker 1: to Hawaii, and we've got about a nucleus of about 89 00:05:03,600 --> 00:05:07,440 Speaker 1: ten million laying hens and we produce all different kinds 90 00:05:07,440 --> 00:05:09,440 Speaker 1: of eggs. We produce brown eggs and white eggs, and 91 00:05:09,560 --> 00:05:12,960 Speaker 1: organic eggs and just about any type of of eggs 92 00:05:13,000 --> 00:05:16,800 Speaker 1: that are demanded by the consumers. So, just before we 93 00:05:16,880 --> 00:05:20,120 Speaker 1: dive into why egg prices are going up, follow up 94 00:05:20,200 --> 00:05:23,680 Speaker 1: question here, but can you give us the sort of uh, 95 00:05:23,680 --> 00:05:25,480 Speaker 1: I say, I'm not doing this on purpose, but the 96 00:05:26,080 --> 00:05:28,120 Speaker 1: lay of the land. No, this one just came to me. 97 00:05:28,360 --> 00:05:29,960 Speaker 1: The lay of the land when it comes to the 98 00:05:30,040 --> 00:05:34,839 Speaker 1: egg industry. So what proportion of America's eggs supply comes 99 00:05:34,880 --> 00:05:38,960 Speaker 1: from you know, smaller farms or even independent backyard breeders 100 00:05:39,440 --> 00:05:44,840 Speaker 1: versus big industrial agricultural corporations and do we import any eggs? 101 00:05:45,000 --> 00:05:49,279 Speaker 1: I honestly have no idea, Tracy. The American Egg Board 102 00:05:49,400 --> 00:05:51,960 Speaker 1: is our promotion and marketing arm of the egg industry. 103 00:05:52,560 --> 00:05:56,600 Speaker 1: And everyone that has seventy five thousand laying hens and 104 00:05:56,760 --> 00:06:00,680 Speaker 1: higher is part of the American Egg Board of contributes 105 00:06:00,720 --> 00:06:04,440 Speaker 1: to the promotion of eggs. You know, that helps educate 106 00:06:04,480 --> 00:06:08,120 Speaker 1: people and and hopefully drives demand. So if you look 107 00:06:08,160 --> 00:06:11,559 Speaker 1: at the seventy and up, I would suspect there's about 108 00:06:11,600 --> 00:06:15,880 Speaker 1: two hundred uh farms across the country. If you look 109 00:06:15,920 --> 00:06:19,320 Speaker 1: at the top twenty in the in the United States, 110 00:06:19,720 --> 00:06:24,640 Speaker 1: probably eighty plus percent of the eggs in the country 111 00:06:24,640 --> 00:06:28,880 Speaker 1: are produced by the by the twenty largest firms there are. 112 00:06:28,880 --> 00:06:31,960 Speaker 1: You know, there's been a proliferation of of kind of 113 00:06:32,560 --> 00:06:37,039 Speaker 1: backyard and semi commercial layers over the past ten years. 114 00:06:37,080 --> 00:06:40,440 Speaker 1: As you know, you know, Tracy, people get a little 115 00:06:40,440 --> 00:06:41,919 Speaker 1: bit of land and decide that they like to have 116 00:06:41,920 --> 00:06:45,200 Speaker 1: a few chickens and then face face the same thing 117 00:06:45,240 --> 00:06:48,640 Speaker 1: that every farmer has is moderating their supply and demand 118 00:06:48,640 --> 00:06:51,640 Speaker 1: and trying to come up with the right amount of products. So, uh, 119 00:06:51,720 --> 00:06:55,200 Speaker 1: it's there has been a proliferation of backyard and semi 120 00:06:55,200 --> 00:06:58,680 Speaker 1: commercial farms in the last ten years. One of my 121 00:06:58,760 --> 00:07:01,520 Speaker 1: core memories Joe, when I was like six years old, 122 00:07:01,600 --> 00:07:05,280 Speaker 1: is going to a very big chicken farm in Arkansas 123 00:07:05,760 --> 00:07:08,000 Speaker 1: and thinking it would be really fun to play with 124 00:07:08,040 --> 00:07:10,960 Speaker 1: a little like fuzzy yellow chicks. And I don't know 125 00:07:11,000 --> 00:07:13,120 Speaker 1: if you've ever been to one, but that like there 126 00:07:13,160 --> 00:07:16,680 Speaker 1: are dead chickens everywhere, or at least so it turned 127 00:07:16,680 --> 00:07:18,840 Speaker 1: into a bit of a nightmare. But I still want chickens, 128 00:07:18,840 --> 00:07:22,360 Speaker 1: some mince a little quickly, you know, just one more 129 00:07:22,440 --> 00:07:25,640 Speaker 1: question about size. So it's ten million eggs and where 130 00:07:25,680 --> 00:07:29,000 Speaker 1: does that put you in the rankings? Just so I 131 00:07:29,040 --> 00:07:31,720 Speaker 1: get a sense of like what a mega producer looks like, 132 00:07:31,760 --> 00:07:34,080 Speaker 1: how many chickens would like some of the big and 133 00:07:34,120 --> 00:07:37,600 Speaker 1: who are the biggest producers of chickens. Cowmede Foods is 134 00:07:37,640 --> 00:07:41,800 Speaker 1: the largest of chickens in the country. They got about 135 00:07:42,280 --> 00:07:46,440 Speaker 1: I think forty four million birds. And then there's there's 136 00:07:46,440 --> 00:07:50,880 Speaker 1: several other UH operations that are that come right under them, 137 00:07:51,040 --> 00:07:54,480 Speaker 1: and so we're we're up there, Yeah, we're up there. 138 00:07:54,480 --> 00:07:57,600 Speaker 1: But there you know, there's a family behind Cowmane Foods. 139 00:07:57,640 --> 00:08:01,640 Speaker 1: There's a there's a family virtually behind every single egg farm. 140 00:08:01,720 --> 00:08:06,400 Speaker 1: Any anyone that thinks that, uh, farming and especially animal 141 00:08:06,440 --> 00:08:11,400 Speaker 1: production is not still family owned and operated, it's probably 142 00:08:11,400 --> 00:08:13,400 Speaker 1: a little bit, a little bit stretch of the truth. 143 00:08:13,480 --> 00:08:16,560 Speaker 1: We're all we're all in this because, um, you know, 144 00:08:16,600 --> 00:08:36,280 Speaker 1: it's a family business. So why don't we jump to 145 00:08:37,280 --> 00:08:39,959 Speaker 1: the topic at hand and talk about what's been going 146 00:08:40,000 --> 00:08:42,400 Speaker 1: on with egg prices? So, first of all, what have 147 00:08:42,600 --> 00:08:46,480 Speaker 1: you observed from your own seat in terms of prices? 148 00:08:46,520 --> 00:08:49,480 Speaker 1: How much have they gone up for you versus you know, 149 00:08:49,520 --> 00:08:51,319 Speaker 1: say a year ago, And what do you think is 150 00:08:51,400 --> 00:08:55,120 Speaker 1: driving the increase? Well, Tracy, the the egg industry, by 151 00:08:55,120 --> 00:08:57,920 Speaker 1: and larger is price takers. You know, there's a market, 152 00:08:58,000 --> 00:09:00,960 Speaker 1: just like there's a market for corn, a market for 153 00:09:01,000 --> 00:09:03,600 Speaker 1: soy beans and those kind of things, and so we 154 00:09:03,720 --> 00:09:07,800 Speaker 1: price against that market. The previous three years n twenty 155 00:09:07,880 --> 00:09:10,560 Speaker 1: one where some of the most horrendous years in terms 156 00:09:10,640 --> 00:09:14,600 Speaker 1: of negative returns that the egg industry has ever experienced. 157 00:09:14,600 --> 00:09:17,439 Speaker 1: So whenever you have negative returns, you do have people 158 00:09:17,440 --> 00:09:19,560 Speaker 1: that eggs at the business are downsize of those kind 159 00:09:19,600 --> 00:09:23,160 Speaker 1: of things. And then when bird flu happened, uh, you know, 160 00:09:23,200 --> 00:09:27,199 Speaker 1: we started to lose birds in um in February and 161 00:09:27,240 --> 00:09:30,920 Speaker 1: it's it's become you know, it's it's not stopped. We 162 00:09:31,040 --> 00:09:34,880 Speaker 1: have Hickman's um is the last commercial farm to break. 163 00:09:34,920 --> 00:09:38,720 Speaker 1: We had a a farm in Colorado with three hundred 164 00:09:38,760 --> 00:09:42,200 Speaker 1: thousand organic birds and they broke on December seventeenth, So 165 00:09:42,800 --> 00:09:44,960 Speaker 1: it's knocked on wood. It's been a month since we 166 00:09:45,040 --> 00:09:49,080 Speaker 1: have we've had a commercial farm outbreak, but it's mostly 167 00:09:49,080 --> 00:09:52,080 Speaker 1: in the wild bird population and um. You know, if 168 00:09:52,080 --> 00:09:55,640 Speaker 1: you're gonna bring air to everything, from air to people, 169 00:09:55,679 --> 00:09:58,200 Speaker 1: from the outside to the inside of your barns, you 170 00:09:58,200 --> 00:10:01,520 Speaker 1: have it. You have a chance for to to spread infection. 171 00:10:02,880 --> 00:10:06,840 Speaker 1: What happens, So how do you discover the incidents of 172 00:10:06,960 --> 00:10:11,240 Speaker 1: avian flew among your the population within a farm? How 173 00:10:11,280 --> 00:10:12,760 Speaker 1: do you how do you, Oh, we have it, and 174 00:10:12,800 --> 00:10:14,079 Speaker 1: then what do you have to do? At that point? 175 00:10:14,800 --> 00:10:21,520 Speaker 1: Every single barn, every single aviary is walked every single 176 00:10:21,640 --> 00:10:27,400 Speaker 1: day by the caretaker of that barn. Any kind of 177 00:10:27,960 --> 00:10:32,560 Speaker 1: surge immortality which avian influences cause a surge immortality is 178 00:10:32,679 --> 00:10:38,280 Speaker 1: immediately identified and uh, corrective measures taken. So maybe it's 179 00:10:38,320 --> 00:10:42,040 Speaker 1: a it's a situation where some hands got scared and 180 00:10:42,040 --> 00:10:43,959 Speaker 1: they piled in a corner and those kind of things, 181 00:10:44,040 --> 00:10:46,000 Speaker 1: But you try to figure out why, how to prevent 182 00:10:46,040 --> 00:10:49,480 Speaker 1: that the next time. With avian flew, the spread of 183 00:10:49,480 --> 00:10:54,079 Speaker 1: infection is so fast and so deadly that maybe one 184 00:10:54,160 --> 00:10:56,360 Speaker 1: day you'll have ten jet chickens in a barn, the 185 00:10:56,400 --> 00:10:58,240 Speaker 1: next day you have a hundred, the next day you'll 186 00:10:58,240 --> 00:11:01,120 Speaker 1: have a thousand, and with it just to very few days, 187 00:11:01,440 --> 00:11:03,600 Speaker 1: you know, the entire farm is involved in it. So 188 00:11:04,240 --> 00:11:08,120 Speaker 1: avian flu is a disease that has been identified by 189 00:11:08,120 --> 00:11:12,559 Speaker 1: the federal government as something that we need to address aggressively. 190 00:11:13,080 --> 00:11:17,160 Speaker 1: So when you get identified as avian flu, the federal 191 00:11:17,200 --> 00:11:21,200 Speaker 1: government mandates that the entire flock is euthanized. And that's 192 00:11:21,240 --> 00:11:24,000 Speaker 1: what's happened in the in the AAN. So we've lost, 193 00:11:24,920 --> 00:11:28,640 Speaker 1: you know, close to fifteen per cent of our nation's 194 00:11:28,760 --> 00:11:31,800 Speaker 1: laying flock just this year. Some of that has been 195 00:11:31,840 --> 00:11:36,640 Speaker 1: repopulated already, but a large amount hasn't. And you know 196 00:11:36,720 --> 00:11:40,600 Speaker 1: that's that's led to constriction and supplied which in a 197 00:11:40,600 --> 00:11:44,800 Speaker 1: commodity market, you know, they're either a demand surge or 198 00:11:45,120 --> 00:11:51,040 Speaker 1: a supply um deficit leads to higher prices. We had 199 00:11:51,040 --> 00:11:54,600 Speaker 1: this same situation you guys probably remember one that long ago. 200 00:11:54,720 --> 00:11:59,040 Speaker 1: But and uh, you know in November, all the news 201 00:11:59,120 --> 00:12:01,680 Speaker 1: was about the scare city of turkeys and high turkey 202 00:12:01,720 --> 00:12:05,840 Speaker 1: prices because turkeys have been involved in AVIA two and 203 00:12:05,880 --> 00:12:09,320 Speaker 1: Thanksgiving is traditionally the highest demand for turkeys, so you 204 00:12:09,400 --> 00:12:14,280 Speaker 1: had that confluence of high demand and restricted supply. What's 205 00:12:14,320 --> 00:12:17,720 Speaker 1: happened in the egg business is exactly the same. Our 206 00:12:17,800 --> 00:12:22,320 Speaker 1: best market for the year is always during the holidays, 207 00:12:22,320 --> 00:12:25,280 Speaker 1: when there's extra family occasions going on, when there's extra 208 00:12:25,320 --> 00:12:27,920 Speaker 1: baking going on and those kind of things. So we 209 00:12:28,000 --> 00:12:31,480 Speaker 1: had the maximum constriction of supply at the same time 210 00:12:31,520 --> 00:12:36,200 Speaker 1: we had our historical highest demand period since the holidays, 211 00:12:36,840 --> 00:12:39,520 Speaker 1: you know, in terms that your you know, all listeners 212 00:12:39,520 --> 00:12:42,720 Speaker 1: would understand, We've been almost limited down every day in 213 00:12:42,800 --> 00:12:46,320 Speaker 1: the egg market. So the prices are fast correcting as 214 00:12:46,360 --> 00:12:50,040 Speaker 1: we've seen a reduction demand. This is why I didn't 215 00:12:50,080 --> 00:12:53,640 Speaker 1: really understand the timing, because like everyone started talking about 216 00:12:53,640 --> 00:12:57,720 Speaker 1: it right when prices actually started going down. So I 217 00:12:57,800 --> 00:13:00,880 Speaker 1: have so many questions already. Um, But on the bird 218 00:13:00,880 --> 00:13:04,440 Speaker 1: flu itself up, one thing that I heard was like 219 00:13:05,679 --> 00:13:09,840 Speaker 1: it risks becoming endemic. So once a bird has the virus, 220 00:13:09,960 --> 00:13:12,200 Speaker 1: they sort of like carry it in them at all 221 00:13:12,280 --> 00:13:14,640 Speaker 1: times and it can come out again at a later date, 222 00:13:14,840 --> 00:13:17,040 Speaker 1: can you maybe talk a bit more about like how 223 00:13:17,080 --> 00:13:22,240 Speaker 1: possible is it to eradicate avian flu altogether or once 224 00:13:22,400 --> 00:13:26,160 Speaker 1: it's widespread, does it basically just become something that you 225 00:13:26,200 --> 00:13:29,760 Speaker 1: have to deal with constantly. Tracy, we can kind of 226 00:13:29,800 --> 00:13:33,040 Speaker 1: compare it to covid that there's been mutations that become 227 00:13:33,559 --> 00:13:36,880 Speaker 1: more infectious but less lethfual and and those kind of things, 228 00:13:36,880 --> 00:13:39,040 Speaker 1: and I think that's the same kind of pattern we're 229 00:13:39,040 --> 00:13:44,480 Speaker 1: seeing with avian influenza. So you know, when when we 230 00:13:44,520 --> 00:13:49,120 Speaker 1: think about eradicating um, that that ship has sailed, will 231 00:13:49,160 --> 00:13:53,280 Speaker 1: never eradicate avian flu because then the wild bird population 232 00:13:54,120 --> 00:13:58,240 Speaker 1: and as it mutates those wild birds, you know, are 233 00:13:58,240 --> 00:14:03,280 Speaker 1: our super spreaders. They might great they they land in 234 00:14:03,320 --> 00:14:05,880 Speaker 1: the same ponds that some of our domestic water values 235 00:14:05,960 --> 00:14:09,040 Speaker 1: and stuff like that. So, um, you know, there is 236 00:14:09,440 --> 00:14:13,280 Speaker 1: there's you know, taco vaccine for avian fluid um, but 237 00:14:13,840 --> 00:14:17,319 Speaker 1: that's a that's a different road that you know, will 238 00:14:17,600 --> 00:14:23,360 Speaker 1: will involve all commercially all commercial poultry probably globally, and 239 00:14:23,440 --> 00:14:27,360 Speaker 1: so it's it's really has to be well thought out, 240 00:14:27,520 --> 00:14:31,560 Speaker 1: and um, it's probably a couple of years away from 241 00:14:31,600 --> 00:14:35,160 Speaker 1: having any kind of decision where there might be widespread 242 00:14:35,920 --> 00:14:41,960 Speaker 1: uh Avian influenza vaccines that we can start to use commercially. 243 00:14:42,640 --> 00:14:44,280 Speaker 1: You know, I want to sort of I want to 244 00:14:44,320 --> 00:14:46,640 Speaker 1: get back to the current details in a second. But 245 00:14:47,000 --> 00:14:50,080 Speaker 1: other eggs futures, because I don't think I've ever seen them, 246 00:14:50,080 --> 00:14:52,400 Speaker 1: And yet my the CNME, I think was founded in 247 00:14:52,560 --> 00:14:55,440 Speaker 1: the Chicago butter and egg board are the futures there? 248 00:14:55,480 --> 00:14:57,600 Speaker 1: Do you have some other way of like hedging these 249 00:14:57,680 --> 00:15:00,560 Speaker 1: kinds of risks as a major operator? Know, we don't. 250 00:15:00,960 --> 00:15:03,960 Speaker 1: I think that the egg futures were kind of delisted 251 00:15:03,960 --> 00:15:07,920 Speaker 1: in the early seventies because even back then the concentration 252 00:15:09,000 --> 00:15:11,760 Speaker 1: was so high that there wasn't enough liquidity to to 253 00:15:11,920 --> 00:15:15,400 Speaker 1: keep it from being manipulated. Oh interesting, because when you 254 00:15:15,520 --> 00:15:19,280 Speaker 1: say the concentration, the concentration of production was such that 255 00:15:20,320 --> 00:15:26,920 Speaker 1: and is that still the case? Like Joe, I'm so 256 00:15:28,120 --> 00:15:30,560 Speaker 1: fair enough, fair enough my memory when I was ten 257 00:15:30,640 --> 00:15:34,400 Speaker 1: years old, Joe, you and I can hatch a plan 258 00:15:34,520 --> 00:15:38,920 Speaker 1: to relaunch egg futures. Um. So one other thing when 259 00:15:38,920 --> 00:15:41,680 Speaker 1: it comes to what's driving up egg prices, and there 260 00:15:41,720 --> 00:15:44,360 Speaker 1: seems to be a little bit of debate about whether 261 00:15:44,560 --> 00:15:47,200 Speaker 1: it's mostly the flu or whether it's also down to 262 00:15:47,320 --> 00:15:51,960 Speaker 1: factors like higher chicken feed or combination some combination of both. 263 00:15:51,960 --> 00:15:54,840 Speaker 1: Can you talk about maybe the input costs that go 264 00:15:55,000 --> 00:15:59,680 Speaker 1: into having a egg slash chicken farm, Tracy and Joe. 265 00:15:59,720 --> 00:16:06,000 Speaker 1: When and um, the Ukrainian War started, it really added 266 00:16:06,040 --> 00:16:09,600 Speaker 1: fuel to a fire that already existed. So our grain 267 00:16:10,080 --> 00:16:15,200 Speaker 1: costs have just exploded, and probably every businessman will tell 268 00:16:15,240 --> 00:16:20,760 Speaker 1: you between labor utilities and everything in our environment has 269 00:16:20,840 --> 00:16:24,120 Speaker 1: just gone up, you know, exponentially in some cases. So 270 00:16:24,840 --> 00:16:28,240 Speaker 1: the at some point in time, even though we're priced takers, 271 00:16:28,280 --> 00:16:31,280 Speaker 1: that has to be reflected in the selling price or 272 00:16:31,280 --> 00:16:34,520 Speaker 1: you won't have anyone around to sell eggs. So, um, 273 00:16:34,560 --> 00:16:38,600 Speaker 1: there is a there is a degree of higher costs 274 00:16:38,600 --> 00:16:42,480 Speaker 1: that have been reflected into the price of eggs, and 275 00:16:42,520 --> 00:16:45,200 Speaker 1: it it kind of has to happen, are you know, 276 00:16:45,520 --> 00:16:48,400 Speaker 1: like you said, corn price you know, just blew up 277 00:16:48,600 --> 00:16:52,400 Speaker 1: when the Ukrainian War started, and we haven't got much 278 00:16:52,440 --> 00:16:55,680 Speaker 1: relief since then. I want to go back, you know. 279 00:16:55,720 --> 00:16:58,240 Speaker 1: One of the themes that comes up on this podcast 280 00:16:58,280 --> 00:17:00,960 Speaker 1: from time to time is how we pay the price 281 00:17:01,280 --> 00:17:04,679 Speaker 1: during sort of inflationary surges of any sorts. It's often 282 00:17:04,880 --> 00:17:07,879 Speaker 1: us paying the price for a downturn that happened before, 283 00:17:08,400 --> 00:17:13,200 Speaker 1: and you know, a washout happens, farms or entities come 284 00:17:13,200 --> 00:17:16,199 Speaker 1: out of the market and then supplies constraint. Prior to 285 00:17:16,280 --> 00:17:18,359 Speaker 1: this sort of like boom that it was actually a 286 00:17:18,480 --> 00:17:21,439 Speaker 1: very rough couple of years for the industry. Can you 287 00:17:21,480 --> 00:17:24,760 Speaker 1: talk a little bit about what you know, the last 288 00:17:24,800 --> 00:17:28,520 Speaker 1: few years prior to the surgeon prices, what was causing 289 00:17:28,560 --> 00:17:31,520 Speaker 1: it and you know, just the experience COVID itself and 290 00:17:31,560 --> 00:17:34,320 Speaker 1: the pandemic and the sort of an initial uh, the 291 00:17:34,359 --> 00:17:37,720 Speaker 1: initial effects that that had on egg production. Well, you guys, 292 00:17:37,840 --> 00:17:40,399 Speaker 1: you know, I think it's you know, it's seen in 293 00:17:40,680 --> 00:17:43,119 Speaker 1: a lot of industries. You know, when the price of 294 00:17:43,200 --> 00:17:48,080 Speaker 1: oil gets ugly and people stopped drilling, and the semi 295 00:17:48,440 --> 00:17:52,160 Speaker 1: conductors become too too many, and people stopped building new 296 00:17:52,200 --> 00:17:54,880 Speaker 1: factories and those kind of things, and then to demand 297 00:17:55,000 --> 00:17:58,840 Speaker 1: catches up and then the same thing happened with a supplies. 298 00:17:58,880 --> 00:18:02,200 Speaker 1: We have a we have a situation where we had 299 00:18:02,520 --> 00:18:05,320 Speaker 1: very very poor we we had negative returns as an 300 00:18:05,320 --> 00:18:08,560 Speaker 1: industry for three years running. And that causes you know, 301 00:18:08,680 --> 00:18:14,600 Speaker 1: constraint of of expansion, capital and growth, and that's kind 302 00:18:14,600 --> 00:18:17,760 Speaker 1: of what happened. And so now you know, we're probably 303 00:18:17,760 --> 00:18:20,359 Speaker 1: going to see some some growth in our in our country, 304 00:18:20,440 --> 00:18:23,240 Speaker 1: we have to uh. We have several states that have 305 00:18:23,359 --> 00:18:27,439 Speaker 1: mandated cage free laws. We have several large customers that 306 00:18:27,480 --> 00:18:32,480 Speaker 1: have adopted cage free as their uh future. And in 307 00:18:32,600 --> 00:18:36,560 Speaker 1: most cases, a cage facility doesn't lend itself to an 308 00:18:36,560 --> 00:18:39,080 Speaker 1: easy remodel to cage free, and that takes a lot 309 00:18:39,119 --> 00:18:43,160 Speaker 1: of capital. So we're going to see some constraints when 310 00:18:43,359 --> 00:18:48,399 Speaker 1: it comes to expansion because of of not really knowing 311 00:18:48,520 --> 00:18:50,520 Speaker 1: what the market is going to demand. And we'll have 312 00:18:50,600 --> 00:18:53,720 Speaker 1: to kind of play that by years as as the 313 00:18:53,800 --> 00:18:57,160 Speaker 1: situation you know, plays out. That's interesting. I just want 314 00:18:57,160 --> 00:18:59,639 Speaker 1: to go back those three years that you're talking about 315 00:19:00,040 --> 00:19:04,320 Speaker 1: bad return. What was going on that cause I'm still 316 00:19:04,320 --> 00:19:08,520 Speaker 1: trying to wrap my head what caused those three rough yards. Well, 317 00:19:08,560 --> 00:19:12,520 Speaker 1: the price of grain started to go up, like I said, 318 00:19:12,560 --> 00:19:15,159 Speaker 1: about three years ago, and then just let the fire 319 00:19:15,280 --> 00:19:19,720 Speaker 1: when the Ukrainian War happened. In in context, you guys, 320 00:19:20,320 --> 00:19:24,399 Speaker 1: a laying hand, it's kind of kind of you know, 321 00:19:24,560 --> 00:19:27,640 Speaker 1: works out this way. One laying hand will eat one 322 00:19:27,680 --> 00:19:31,399 Speaker 1: bushel a corner year that one laying and will also 323 00:19:31,520 --> 00:19:35,919 Speaker 1: produce enough eggs for one person. And so when the 324 00:19:36,000 --> 00:19:41,320 Speaker 1: bushel of corn in some area and some uh our 325 00:19:41,480 --> 00:19:43,600 Speaker 1: our costs went up by two and a half times, 326 00:19:44,080 --> 00:19:47,159 Speaker 1: then that's got to be you know, reflected all the 327 00:19:47,160 --> 00:19:50,639 Speaker 1: way down the uh the in the rest of the 328 00:19:50,640 --> 00:19:53,639 Speaker 1: food chain. You know, we we have a we have 329 00:19:53,720 --> 00:19:56,080 Speaker 1: a policy in this in this country where you know, 330 00:19:56,119 --> 00:19:58,800 Speaker 1: whether you're talking about ethanol or bio diesel, they come 331 00:19:59,040 --> 00:20:03,560 Speaker 1: from food crops. And you know, when we are as 332 00:20:03,560 --> 00:20:05,720 Speaker 1: a country we've made a decision that we're going to 333 00:20:06,080 --> 00:20:09,280 Speaker 1: burn part of our food to make ethanol or or 334 00:20:09,880 --> 00:20:14,199 Speaker 1: part of our soybeans to make biodiesel, that does also 335 00:20:14,720 --> 00:20:19,520 Speaker 1: carve into the supply that's available for livestock. So just 336 00:20:19,640 --> 00:20:22,479 Speaker 1: on on on the sort of cyclical note when it 337 00:20:22,520 --> 00:20:25,080 Speaker 1: comes to for instance, if you have an outbreak of 338 00:20:25,080 --> 00:20:28,720 Speaker 1: avian flu and you have to destroy a large chunk 339 00:20:28,800 --> 00:20:32,360 Speaker 1: of your flock, do you get compensation from the from 340 00:20:32,359 --> 00:20:35,080 Speaker 1: the government for doing that if you're mandated to do it? 341 00:20:35,119 --> 00:20:38,560 Speaker 1: And also a similar question for the transition to cage 342 00:20:38,600 --> 00:20:41,960 Speaker 1: free chicken raising, do you get grants or something like 343 00:20:42,000 --> 00:20:45,960 Speaker 1: that for the further capital investment? So since the government 344 00:20:46,160 --> 00:20:50,840 Speaker 1: government does mandate that you have to depopulate your farm. 345 00:20:50,880 --> 00:20:54,080 Speaker 1: They do pay a bit of a stipend, so that 346 00:20:54,200 --> 00:20:59,399 Speaker 1: it basically pays your cost of depopulation, your cost of 347 00:20:59,480 --> 00:21:05,000 Speaker 1: cleaning and disinfecting, and approximately the value of the birds 348 00:21:05,280 --> 00:21:08,000 Speaker 1: that were in the barn at the time. It doesn't 349 00:21:08,000 --> 00:21:10,000 Speaker 1: pay you for the loss of eggs. It doesn't pay 350 00:21:10,080 --> 00:21:12,240 Speaker 1: to buy a new chicken to put in the barn. 351 00:21:12,359 --> 00:21:17,040 Speaker 1: So it really does lack um you know, a component 352 00:21:17,119 --> 00:21:38,679 Speaker 1: of a full compensation for the disaster that happened. You know, 353 00:21:38,920 --> 00:21:42,679 Speaker 1: since your company has been around for so long, I 354 00:21:42,720 --> 00:21:45,000 Speaker 1: feel like it might be uniquely positioned to answer this. 355 00:21:45,080 --> 00:21:50,360 Speaker 1: But I'm curiously efficiency gains over time in the egg business, 356 00:21:50,480 --> 00:21:55,560 Speaker 1: or like how much human labor is required to produce 357 00:21:56,080 --> 00:21:57,879 Speaker 1: I don't know a million eggs versus how much it 358 00:21:57,920 --> 00:22:00,959 Speaker 1: would have taken twenty years ago. It's how has it 359 00:22:01,040 --> 00:22:04,439 Speaker 1: changed over time and the operations of farming, its scale 360 00:22:04,440 --> 00:22:06,840 Speaker 1: that you've seen, and what kind of games you know, 361 00:22:07,160 --> 00:22:09,479 Speaker 1: how does it look different than if a time traveler 362 00:22:09,520 --> 00:22:12,600 Speaker 1: had come from twin years ago? The big changes? Joe, 363 00:22:12,680 --> 00:22:15,080 Speaker 1: I looked at a study um that goes back to 364 00:22:15,160 --> 00:22:19,400 Speaker 1: nineteen sixty and to kind of give you a um 365 00:22:18,920 --> 00:22:23,760 Speaker 1: uh ballpark, But if you take it from the production 366 00:22:23,800 --> 00:22:28,400 Speaker 1: of corn through the production of the eggs four times 367 00:22:28,440 --> 00:22:34,320 Speaker 1: as efficient today that that acre of of of grain 368 00:22:34,359 --> 00:22:37,639 Speaker 1: production will produce four times as many eggs as it 369 00:22:37,680 --> 00:22:42,680 Speaker 1: did in nineteen sixty. Almost all of that efficiency has 370 00:22:42,720 --> 00:22:46,480 Speaker 1: been reflected in the marketplace. It's a highly competitive marketplace. 371 00:22:46,560 --> 00:22:49,960 Speaker 1: So as soon as a producer figures out how to 372 00:22:49,960 --> 00:22:51,679 Speaker 1: cut their costs and they feel like they have a 373 00:22:51,720 --> 00:22:53,840 Speaker 1: market advantage, they might reflect that in their price to 374 00:22:53,880 --> 00:22:57,600 Speaker 1: win greater market share. And so, um, I think that's 375 00:22:57,800 --> 00:23:02,320 Speaker 1: you know, the American consumer up until recently. Um. You know, 376 00:23:02,359 --> 00:23:08,399 Speaker 1: we a year ago last summer, we were selling eggs 377 00:23:08,440 --> 00:23:11,000 Speaker 1: for virtually the same price that we did in nineteen sixty, 378 00:23:11,200 --> 00:23:15,000 Speaker 1: and so all of that, all of those efficiencies have 379 00:23:15,200 --> 00:23:20,879 Speaker 1: accrued basically to society's benefit. You know, You've mentioned several 380 00:23:20,880 --> 00:23:25,640 Speaker 1: times that egg farmers are price takers, and I'm wondering 381 00:23:25,760 --> 00:23:29,080 Speaker 1: as you see the prices shoot up and we see 382 00:23:29,160 --> 00:23:31,760 Speaker 1: more and more people apparently talking about this, you know, 383 00:23:32,040 --> 00:23:33,600 Speaker 1: here in New York, I think it's gone up from 384 00:23:33,640 --> 00:23:36,480 Speaker 1: like two or three dollars per dozen eggs to like 385 00:23:36,560 --> 00:23:39,800 Speaker 1: maybe seven or eight recently. And I've seen some people 386 00:23:39,960 --> 00:23:42,800 Speaker 1: on Twitter joking that the price of a carton of 387 00:23:42,840 --> 00:23:46,240 Speaker 1: eggs is higher than the minimum wage per hour in 388 00:23:46,359 --> 00:23:50,439 Speaker 1: certain states. Now do you see the consumers start to 389 00:23:50,600 --> 00:23:54,320 Speaker 1: push back as the prices go higher? I guess another 390 00:23:54,359 --> 00:23:57,040 Speaker 1: way of asking that is, you know, how how elastic 391 00:23:57,640 --> 00:24:02,720 Speaker 1: is demand for eggs? Egg demand is very any elastic tracy. 392 00:24:03,000 --> 00:24:05,240 Speaker 1: What you do see is some of these higher levels 393 00:24:05,480 --> 00:24:11,120 Speaker 1: is a family that might have bought, um, five dozen eggs, uh, 394 00:24:11,440 --> 00:24:14,360 Speaker 1: might go in and decide, I'm only going to buy 395 00:24:14,359 --> 00:24:16,560 Speaker 1: a dozen and a half or eighteen eggs and see 396 00:24:16,600 --> 00:24:19,119 Speaker 1: if the prices come down next week. And we have 397 00:24:19,240 --> 00:24:21,680 Speaker 1: seen that happen. So there's been some of that, you 398 00:24:21,760 --> 00:24:25,280 Speaker 1: might say consumer pullback also in the you know kind 399 00:24:25,320 --> 00:24:29,000 Speaker 1: of the industrial uses. You know, if if a bakery 400 00:24:29,080 --> 00:24:32,080 Speaker 1: is a commercial bakery might be making a recipe that 401 00:24:32,160 --> 00:24:35,879 Speaker 1: takes thirty pounds of eggs per hundred pound batch of 402 00:24:35,960 --> 00:24:39,000 Speaker 1: whatever they're making, that might be you know, cutting back 403 00:24:39,040 --> 00:24:42,280 Speaker 1: to twenty nine or eight to to you know, try 404 00:24:42,320 --> 00:24:45,200 Speaker 1: to make the egg supply last a little bit longer 405 00:24:45,240 --> 00:24:47,840 Speaker 1: and there So there's all different kinds of coping. We 406 00:24:47,920 --> 00:24:51,520 Speaker 1: have retailers, uh, you know, across the country. Some have 407 00:24:51,640 --> 00:24:55,959 Speaker 1: reflected the price of eggs um and and some have not. 408 00:24:56,119 --> 00:25:00,360 Speaker 1: And so there's all kinds of different strategies that are 409 00:25:00,359 --> 00:25:04,520 Speaker 1: deployed by retailers and and frankly, we I can't begin 410 00:25:04,560 --> 00:25:08,520 Speaker 1: to understand any of them just on this note. You know, 411 00:25:08,600 --> 00:25:12,120 Speaker 1: if if I'm a big food producer, say I'm Kraft 412 00:25:12,119 --> 00:25:15,440 Speaker 1: Heinz or someone like that, and I'm buying an enormous 413 00:25:15,480 --> 00:25:17,960 Speaker 1: amount of eggs per year, do I buy them on 414 00:25:18,000 --> 00:25:20,720 Speaker 1: a long term basis? Do I have like an annual 415 00:25:20,880 --> 00:25:25,120 Speaker 1: egg contractor am I going out every week and tapping suppliers? 416 00:25:25,720 --> 00:25:27,640 Speaker 1: I don't want to speak to either of the companies 417 00:25:27,880 --> 00:25:32,520 Speaker 1: that sure, just generally generally, if I'm a big egg continuer, yes, 418 00:25:32,640 --> 00:25:36,680 Speaker 1: we we have all kinds of different arrangements with our customers. 419 00:25:36,680 --> 00:25:40,160 Speaker 1: So yes, some some of them do you know, forward purchase, 420 00:25:40,359 --> 00:25:42,399 Speaker 1: you know, six months or a year in advance, and 421 00:25:42,960 --> 00:25:46,000 Speaker 1: some prefer to buy basically on the spot market, and 422 00:25:46,440 --> 00:25:49,760 Speaker 1: we have everything in between. So it's, you know, just 423 00:25:49,880 --> 00:25:54,440 Speaker 1: kind of the strategy that that that customer wants to execute. 424 00:25:55,440 --> 00:25:57,720 Speaker 1: I'm still a little unclear, okay when you talk about 425 00:25:57,760 --> 00:26:01,800 Speaker 1: the spot market for eggs. So let's say a grocery store, 426 00:26:02,200 --> 00:26:08,880 Speaker 1: um that you distribute, Uh, your eggs in are they like? Uh, 427 00:26:08,920 --> 00:26:11,160 Speaker 1: I'm trying to think about how to frame the question, 428 00:26:11,200 --> 00:26:14,480 Speaker 1: but is there like, is there a de facto competition 429 00:26:14,600 --> 00:26:18,160 Speaker 1: between you and other egg producers regularly and who gets 430 00:26:18,359 --> 00:26:20,359 Speaker 1: that shelf space? Do they put out a bid? Do 431 00:26:20,440 --> 00:26:24,320 Speaker 1: they put out a price? Like? How does that actually work? Uh? 432 00:26:24,359 --> 00:26:26,800 Speaker 1: In practice the setting of the wholesale price at a 433 00:26:26,800 --> 00:26:31,360 Speaker 1: retail outlet. Yeah, generally, you know, Joe, We've had relationships 434 00:26:31,480 --> 00:26:35,240 Speaker 1: with some customers, you know, since the beginning of our company, 435 00:26:35,320 --> 00:26:40,120 Speaker 1: and we've had relationships that are annual bids and sometimes 436 00:26:40,119 --> 00:26:42,560 Speaker 1: you win the bid and sometimes you don't, and we 437 00:26:42,640 --> 00:26:46,920 Speaker 1: have everything in between. So there is a lot of 438 00:26:46,920 --> 00:26:53,000 Speaker 1: of of I guess strategy that goes into building your 439 00:26:53,240 --> 00:26:56,199 Speaker 1: your universe of customers and and balancing you know, you 440 00:26:56,200 --> 00:26:59,760 Speaker 1: don't want a customer base that is a medium eggs 441 00:26:59,880 --> 00:27:02,840 Speaker 1: because you know, chickens don't lay a hundred percent medium 442 00:27:02,840 --> 00:27:05,360 Speaker 1: makes so you have to kind of balance that with 443 00:27:05,400 --> 00:27:08,160 Speaker 1: what you with what your production is, and what your 444 00:27:08,440 --> 00:27:12,840 Speaker 1: what your desired customer basis. So, in the current environment 445 00:27:12,920 --> 00:27:16,440 Speaker 1: of higher egg prices, what do we see egg producers 446 00:27:16,760 --> 00:27:20,800 Speaker 1: doing in response? Is it all out expansion to try 447 00:27:20,800 --> 00:27:23,439 Speaker 1: to take advantage of the price increase or are you 448 00:27:23,480 --> 00:27:26,479 Speaker 1: still a little bit cautious given given the recent history 449 00:27:26,480 --> 00:27:28,639 Speaker 1: of the past couple of years that you were discussing, 450 00:27:28,880 --> 00:27:31,560 Speaker 1: what exactly do you do here? Crazy? We had a 451 00:27:31,600 --> 00:27:34,720 Speaker 1: pretty industry wide I think we had a pretty good 452 00:27:34,720 --> 00:27:39,199 Speaker 1: hole to fill, and uh so that was that was 453 00:27:39,480 --> 00:27:42,800 Speaker 1: what happened with the with the earnings that when we 454 00:27:42,880 --> 00:27:47,000 Speaker 1: started to experience the elevated prices due to avian flu 455 00:27:47,359 --> 00:27:50,920 Speaker 1: and so as a I can't speak to the industry. 456 00:27:51,040 --> 00:27:54,960 Speaker 1: I as a company, we don't see the demand for 457 00:27:55,080 --> 00:27:59,920 Speaker 1: eggs um warranting a big expansion. We're not going to 458 00:28:00,520 --> 00:28:03,040 Speaker 1: We're not going to go from our current flock size 459 00:28:03,040 --> 00:28:07,359 Speaker 1: and add a million birds just because there's a temporary shortage. 460 00:28:07,400 --> 00:28:11,080 Speaker 1: Those those cages that are empty due to due to 461 00:28:11,119 --> 00:28:14,480 Speaker 1: aving influenza will be refilled at some point in time, 462 00:28:14,640 --> 00:28:17,480 Speaker 1: and we're hustling to refill ours. And I'm sure everybody 463 00:28:17,480 --> 00:28:21,080 Speaker 1: that has been affected as hustling to refill theirs. I see, 464 00:28:21,119 --> 00:28:24,719 Speaker 1: So you have because you because you have spare capacity. 465 00:28:24,840 --> 00:28:28,080 Speaker 1: There's no necessarily need for like extra capital investment. It's 466 00:28:28,119 --> 00:28:34,680 Speaker 1: sort of just the natural process of repopulating the existing space. Well, 467 00:28:34,760 --> 00:28:38,120 Speaker 1: Joe about you might say, typical layer barn is designed 468 00:28:38,120 --> 00:28:41,880 Speaker 1: to last thirty years, So you know, there's there's three 469 00:28:41,920 --> 00:28:46,120 Speaker 1: percent of the of the population that needs to be 470 00:28:46,840 --> 00:28:51,240 Speaker 1: rebuilt or or start over every single year. And when 471 00:28:51,240 --> 00:28:53,240 Speaker 1: you had a period of time where you where you 472 00:28:53,280 --> 00:28:56,760 Speaker 1: really had negative returns, you might have some deferrals that 473 00:28:56,800 --> 00:28:59,120 Speaker 1: you need to catch up on. So I think there's 474 00:28:59,400 --> 00:29:02,840 Speaker 1: you know, there's probably as as many answers to that 475 00:29:02,960 --> 00:29:07,160 Speaker 1: question as there are egg producers. Glenn. I'm looking at 476 00:29:07,160 --> 00:29:10,440 Speaker 1: your website, which by the way, is full of chicken 477 00:29:10,480 --> 00:29:13,640 Speaker 1: and egg punds, so um, I love that. But there's 478 00:29:13,760 --> 00:29:16,200 Speaker 1: there's a little press release on your on your what's 479 00:29:16,240 --> 00:29:21,280 Speaker 1: cracking plog um about you expanding into feed production in 480 00:29:23,200 --> 00:29:25,640 Speaker 1: and I'm wondering if that kind of I guess vertical 481 00:29:25,760 --> 00:29:29,640 Speaker 1: integration is the future for farms if they're dealing with 482 00:29:29,840 --> 00:29:33,080 Speaker 1: you know, the prospect of higher grain prices, um and 483 00:29:33,160 --> 00:29:35,280 Speaker 1: things like that. Is that something we're going to see 484 00:29:35,280 --> 00:29:38,280 Speaker 1: more of egg farmers who are also producing their own 485 00:29:38,320 --> 00:29:41,200 Speaker 1: chicken feed. You know, we're a little bit novel in 486 00:29:41,240 --> 00:29:44,880 Speaker 1: that we are vertically integrated. We we we make our 487 00:29:44,920 --> 00:29:48,560 Speaker 1: own packaging, we grow our own replacement stock. We we 488 00:29:48,680 --> 00:29:51,520 Speaker 1: cook eggs in terms of hard boiling them. We have 489 00:29:52,080 --> 00:29:56,440 Speaker 1: a liquinate plan. We uh we actually the the what 490 00:29:56,520 --> 00:29:59,280 Speaker 1: you're reading on there is back then we built a 491 00:29:59,320 --> 00:30:02,400 Speaker 1: new feed all that allowed us to bring the entire train. 492 00:30:02,600 --> 00:30:06,160 Speaker 1: So the Southwest doesn't produce any green. So we have 493 00:30:06,240 --> 00:30:08,840 Speaker 1: a train to part Iowa every three weeks and the 494 00:30:09,080 --> 00:30:12,560 Speaker 1: entire hundred ten cars come to count our farm and 495 00:30:12,560 --> 00:30:14,680 Speaker 1: and we unload. We sent it back to get another load. 496 00:30:14,800 --> 00:30:17,760 Speaker 1: So um, that's everything that we do is to try 497 00:30:17,760 --> 00:30:21,120 Speaker 1: to gain little efficiency and and try to reduce our 498 00:30:21,480 --> 00:30:24,640 Speaker 1: our cost of production. You know something that's interesting on 499 00:30:25,000 --> 00:30:27,800 Speaker 1: your website you talk about a re entry program and 500 00:30:27,840 --> 00:30:31,640 Speaker 1: having a significant amount of hiring among the formerly incarcerated. 501 00:30:32,080 --> 00:30:34,520 Speaker 1: Talk to us about what should people know or what 502 00:30:34,560 --> 00:30:39,800 Speaker 1: should policy makers know about creating jobs and the opportunity 503 00:30:40,040 --> 00:30:42,160 Speaker 1: in this area, because I think it's really interesting. And 504 00:30:42,200 --> 00:30:46,400 Speaker 1: of course, with the sort of supposedly very tight labor markets, 505 00:30:46,680 --> 00:30:50,720 Speaker 1: I imagine you have a lot of employers trying to 506 00:30:50,840 --> 00:30:53,560 Speaker 1: look for pools of potential labor that they perhaps hadn't 507 00:30:53,560 --> 00:30:58,920 Speaker 1: considered before. Joe, we we started our our program and 508 00:30:59,320 --> 00:31:04,200 Speaker 1: when we started, uh, you know, re employing, employing uh 509 00:31:04,520 --> 00:31:06,800 Speaker 1: X inmates. And you have to remember that very few, 510 00:31:07,200 --> 00:31:11,600 Speaker 1: very very few inmates get life sentences, so everybody is 511 00:31:11,600 --> 00:31:14,240 Speaker 1: going to be released from prison at some point in time. 512 00:31:14,880 --> 00:31:18,280 Speaker 1: Agriculture sometimes is not seen as the most attractive job 513 00:31:18,440 --> 00:31:21,800 Speaker 1: out there, so it's always been difficult to get labor 514 00:31:21,880 --> 00:31:24,200 Speaker 1: to work with animals and they're you know, they're dusty, 515 00:31:24,280 --> 00:31:27,720 Speaker 1: they're smelly, all those kind of things. So we've been 516 00:31:28,480 --> 00:31:32,560 Speaker 1: an employer of of x ndmates since then. We actually 517 00:31:32,600 --> 00:31:39,480 Speaker 1: have a full time manager who um, if needbe, he'll 518 00:31:39,520 --> 00:31:42,480 Speaker 1: pick him up on their release date. He'll take him 519 00:31:42,480 --> 00:31:45,680 Speaker 1: into town, he'll get him a I D. You know, 520 00:31:45,920 --> 00:31:49,280 Speaker 1: social Security number again and those kind of things. And 521 00:31:49,360 --> 00:31:51,880 Speaker 1: we have we have forty what we refer to as 522 00:31:51,920 --> 00:31:56,760 Speaker 1: transitional housing apartments that we allow them to live there 523 00:31:56,800 --> 00:32:00,920 Speaker 1: for a a stipend and for one year and if 524 00:32:00,920 --> 00:32:03,840 Speaker 1: they'll if they'll lead between nine and fifteen months, we 525 00:32:03,960 --> 00:32:06,840 Speaker 1: give them half their rent back. We want to continue 526 00:32:06,840 --> 00:32:10,760 Speaker 1: their transition into society, not just you know, go from 527 00:32:10,840 --> 00:32:14,080 Speaker 1: one institution to another. And it's been very, very successful, 528 00:32:14,160 --> 00:32:17,280 Speaker 1: and we've got a lot of folks who you know, 529 00:32:17,400 --> 00:32:20,880 Speaker 1: probably wouldn't have had as many opportunities that they're working 530 00:32:20,880 --> 00:32:25,240 Speaker 1: force post release and even after they we've had we've 531 00:32:25,240 --> 00:32:29,840 Speaker 1: had inmates working force for twenty years and raising families 532 00:32:29,840 --> 00:32:33,800 Speaker 1: and paying taxes, um Glenn, very important question. But you know, 533 00:32:33,920 --> 00:32:38,240 Speaker 1: we talked about wholesale egg prices starting to turn down. 534 00:32:38,280 --> 00:32:41,720 Speaker 1: Now what are you seeing in terms of the trajectory? 535 00:32:41,760 --> 00:32:44,120 Speaker 1: Are we going to see egg prices go back to 536 00:32:44,280 --> 00:32:47,840 Speaker 1: where they were you know, a year ago? How quickly 537 00:32:48,000 --> 00:32:51,240 Speaker 1: is that going to unfold? I'm probably not a very 538 00:32:51,280 --> 00:32:56,560 Speaker 1: good predictor when when, and probably every investor shares a 539 00:32:56,600 --> 00:32:59,560 Speaker 1: little bit of this. When things are really really bad, 540 00:32:59,600 --> 00:33:01,480 Speaker 1: you can't see the end of it, and when things 541 00:33:01,520 --> 00:33:03,600 Speaker 1: are really really good, you can't see the end of it. 542 00:33:04,120 --> 00:33:07,080 Speaker 1: And so we're in the correction phase right now. Where 543 00:33:07,080 --> 00:33:11,440 Speaker 1: that where that correct too? Is anybody's guests? I suspect 544 00:33:11,560 --> 00:33:14,960 Speaker 1: that we will. We will correct to a level that 545 00:33:15,120 --> 00:33:18,960 Speaker 1: is is probably higher than what we've saw in the 546 00:33:19,000 --> 00:33:21,720 Speaker 1: previous three years, but less than what we saw in 547 00:33:21,760 --> 00:33:26,200 Speaker 1: the previous you know, a couple of months, I wanna, 548 00:33:26,600 --> 00:33:29,160 Speaker 1: I wanna have a couple of minutes for advice on 549 00:33:29,200 --> 00:33:32,320 Speaker 1: Tracy's egg operation. But before we do, you know, you're 550 00:33:32,320 --> 00:33:36,520 Speaker 1: in Arizona, and Um, I'm curious about how big of 551 00:33:36,520 --> 00:33:39,880 Speaker 1: a deal water is or and you know, there's all 552 00:33:39,960 --> 00:33:43,640 Speaker 1: there's so much development in Arizona, but from housing, it's 553 00:33:43,640 --> 00:33:47,720 Speaker 1: all the semiconductor factories coming in that employ a lot 554 00:33:47,760 --> 00:33:49,480 Speaker 1: of or that need a lot of water to wash 555 00:33:49,560 --> 00:33:52,240 Speaker 1: the silicon, et cetera. Can you talk a little bit 556 00:33:52,280 --> 00:33:55,440 Speaker 1: about the significance of a water in your business and 557 00:33:55,440 --> 00:33:58,280 Speaker 1: how you think about like maintaining a future sort of 558 00:33:58,280 --> 00:34:01,400 Speaker 1: like secure water supplies so you can continue with your 559 00:34:01,400 --> 00:34:04,760 Speaker 1: farm over time. Joe. Water has been an issue in 560 00:34:04,840 --> 00:34:08,720 Speaker 1: Arizona ever since the ho Ho Kom Indians started digging ditches, 561 00:34:08,960 --> 00:34:12,400 Speaker 1: and so um, it's going to continue to be an issue. 562 00:34:12,800 --> 00:34:15,560 Speaker 1: It's uh no one wants to admit that there may 563 00:34:15,560 --> 00:34:18,839 Speaker 1: not be enough. Our desert gets between six to nine 564 00:34:18,880 --> 00:34:22,400 Speaker 1: inches of rainfall a year and that doesn't support a 565 00:34:22,480 --> 00:34:26,879 Speaker 1: lot of uh, you know, people or plants, and so 566 00:34:27,280 --> 00:34:30,560 Speaker 1: we have to depend on either groundwater or or surface 567 00:34:30,600 --> 00:34:34,000 Speaker 1: water that's delivered from far away our farms. We have 568 00:34:34,040 --> 00:34:37,719 Speaker 1: the luxury of of of we drilled wells, We have 569 00:34:38,800 --> 00:34:43,960 Speaker 1: great um aquifers, and we own the water rights to 570 00:34:44,000 --> 00:34:47,440 Speaker 1: continue to you know, produce all the water we need 571 00:34:47,520 --> 00:34:52,960 Speaker 1: for for our operations, So I'll buy on the backyard 572 00:34:53,040 --> 00:34:58,120 Speaker 1: chicken education. What chicken breeds do you recommend for the 573 00:34:58,200 --> 00:35:03,960 Speaker 1: best um egg product activity, Tracy. If you're not gonna 574 00:35:03,960 --> 00:35:10,680 Speaker 1: allow me from dissuading you from from e then it 575 00:35:10,800 --> 00:35:15,920 Speaker 1: just depends the Virtually all the commercial layers are either 576 00:35:16,640 --> 00:35:19,920 Speaker 1: a white legger or brown lager in that is uh, 577 00:35:20,120 --> 00:35:23,759 Speaker 1: the most prolific um layer, and that when we say 578 00:35:23,960 --> 00:35:27,600 Speaker 1: prolific it, what we mean is it'll it lays the 579 00:35:27,680 --> 00:35:31,319 Speaker 1: most eggs relative to the feed consumed. And so you 580 00:35:31,360 --> 00:35:34,560 Speaker 1: get some of your some of your smaller breeds that 581 00:35:34,560 --> 00:35:36,319 Speaker 1: that they don't eat as much feed, but they don't 582 00:35:36,360 --> 00:35:37,920 Speaker 1: lay as much eggs, and you get some of the 583 00:35:38,000 --> 00:35:40,440 Speaker 1: larger breeds like Rhode Island reds, and some of those 584 00:35:40,520 --> 00:35:43,640 Speaker 1: that are gonna are gonna eat more per dozen eggs. 585 00:35:43,680 --> 00:35:47,799 Speaker 1: So um, if if you're if you're in a production, 586 00:35:48,400 --> 00:35:51,200 Speaker 1: then a white lager In is your is your choice. 587 00:35:51,239 --> 00:35:54,800 Speaker 1: If you're if you're interested in in in plumage or 588 00:35:54,920 --> 00:36:01,160 Speaker 1: hll color, then the sky's a limit. I am almost 589 00:36:01,200 --> 00:36:05,400 Speaker 1: exclusively interested in those things and also building the world's cutest, 590 00:36:05,520 --> 00:36:08,879 Speaker 1: most adorable chicken coop. But Glenn can I just ask, 591 00:36:08,920 --> 00:36:11,440 Speaker 1: why do you want to dissuade me from from starting 592 00:36:11,440 --> 00:36:18,880 Speaker 1: a backyard flock? Would be competition? Um. So, you guys 593 00:36:20,239 --> 00:36:25,759 Speaker 1: and everybody in animal agriculture really really takes our responsibilities 594 00:36:26,560 --> 00:36:33,720 Speaker 1: very very uh carefully. And so when we take an animal, 595 00:36:33,760 --> 00:36:36,800 Speaker 1: whether you're talking about your dog or a chicken or 596 00:36:36,800 --> 00:36:41,000 Speaker 1: anything in between, and we take away its ability to 597 00:36:41,200 --> 00:36:44,200 Speaker 1: forage and find for itself, then we have a moral 598 00:36:44,239 --> 00:36:48,520 Speaker 1: obligation to take care of that animal. So, you know, 599 00:36:48,600 --> 00:36:52,600 Speaker 1: we see a lot of backyard pets and animals and 600 00:36:52,640 --> 00:36:55,000 Speaker 1: those kind of things that the owners go away for 601 00:36:55,040 --> 00:36:56,960 Speaker 1: a weekend and maybe they don't get fed, maybe they 602 00:36:56,960 --> 00:36:59,680 Speaker 1: don't get watered, and those kind of things. So owning 603 00:36:59,680 --> 00:37:04,560 Speaker 1: an animal is that especially you know, um in your 604 00:37:04,600 --> 00:37:07,920 Speaker 1: backyard is something that you want to really think carefully about. 605 00:37:08,000 --> 00:37:10,520 Speaker 1: And that's any animal, Tracy. So I'm just I'm just 606 00:37:10,520 --> 00:37:12,880 Speaker 1: telling you might be might be easier to get a 607 00:37:12,920 --> 00:37:16,440 Speaker 1: neighbor to watch your kids than it is to watch 608 00:37:16,600 --> 00:37:19,120 Speaker 1: chickens over the weekend. That is totally fair. And this 609 00:37:19,200 --> 00:37:22,480 Speaker 1: is actually exactly why I do not yet have chickens. 610 00:37:22,920 --> 00:37:25,200 Speaker 1: But one day, one day, when you're not going back 611 00:37:25,239 --> 00:37:28,080 Speaker 1: and forth between Connecticut and New York City. Lenn Hickman, 612 00:37:28,280 --> 00:37:31,880 Speaker 1: president of Hickman's Family Farms. I learned so much about 613 00:37:31,920 --> 00:37:35,120 Speaker 1: the egg business from chatting with you. Really appreciate you 614 00:37:35,200 --> 00:37:38,839 Speaker 1: coming on the oddlines, happy to for the opportunity. Guys 615 00:37:38,920 --> 00:37:54,920 Speaker 1: can tell me any time. So Tracy're gonna hold off 616 00:37:54,920 --> 00:37:57,520 Speaker 1: for a little while. Yeah, I mean, look, I've been 617 00:37:57,520 --> 00:37:59,400 Speaker 1: not holding off for years now, so I think I 618 00:37:59,400 --> 00:38:01,320 Speaker 1: can do it a little a bit longer. But one day, 619 00:38:01,360 --> 00:38:03,920 Speaker 1: one day I will have my flock of muppet looking 620 00:38:03,960 --> 00:38:06,080 Speaker 1: silky chickens. You know. It's it's so funny. It's so 621 00:38:06,160 --> 00:38:10,000 Speaker 1: interesting thinking about like animals as essentially these machines for 622 00:38:10,120 --> 00:38:13,520 Speaker 1: turning like grains into like really delicious food. In the 623 00:38:13,560 --> 00:38:18,040 Speaker 1: math of like, okay, one uh, one chicken one bushel 624 00:38:18,040 --> 00:38:21,440 Speaker 1: of corn a year equals one human, about as much 625 00:38:21,480 --> 00:38:23,080 Speaker 1: as a human would eat in here. It's pretty nice. 626 00:38:23,080 --> 00:38:25,279 Speaker 1: It's a nice little it's a nice nice math there. 627 00:38:25,880 --> 00:38:28,200 Speaker 1: Uh yeah, And I mean Glenn kind of touched on it. 628 00:38:28,239 --> 00:38:30,600 Speaker 1: But the whole efforts of the industry to breed the 629 00:38:30,640 --> 00:38:33,719 Speaker 1: most efficient chickens possible, not just in terms of egg laying, 630 00:38:33,760 --> 00:38:36,839 Speaker 1: but also in terms of breast size and things like that, 631 00:38:37,120 --> 00:38:40,240 Speaker 1: and that that stand about how an acre of corn 632 00:38:40,760 --> 00:38:44,600 Speaker 1: uh resulted four times as many eggs as it did 633 00:38:44,800 --> 00:38:48,120 Speaker 1: in the sixties. You know again, that's that's technology there. 634 00:38:48,120 --> 00:38:51,280 Speaker 1: We don't really think about tech right as a egg, 635 00:38:51,280 --> 00:38:54,120 Speaker 1: but that's like that's egg tech. Yeah. Um. The other 636 00:38:54,120 --> 00:38:56,320 Speaker 1: thing that was really interesting and I hadn't realized that 637 00:38:56,360 --> 00:38:59,160 Speaker 1: the past couple of years had been bad one I hadn't, 638 00:38:59,400 --> 00:39:01,080 Speaker 1: but then it a lot of sense. Why are we 639 00:39:01,120 --> 00:39:05,240 Speaker 1: paying so much? It's it's that, I guess yet another 640 00:39:05,280 --> 00:39:10,160 Speaker 1: combination of lower production and supply kind of being taken 641 00:39:10,200 --> 00:39:13,640 Speaker 1: out by the Avian flu plus rampant demand around the 642 00:39:13,680 --> 00:39:16,799 Speaker 1: holidays just pushed everything up. Trying to think of some 643 00:39:16,880 --> 00:39:21,200 Speaker 1: like egg related pun on perfect storm. You know, you 644 00:39:21,200 --> 00:39:25,000 Speaker 1: can't think of any egg pun. It's so easy perfect 645 00:39:25,040 --> 00:39:30,960 Speaker 1: or should I say over easy? We should Okay, all right, 646 00:39:31,040 --> 00:39:33,680 Speaker 1: I'm sorry. This has been another episode of the Odd 647 00:39:33,680 --> 00:39:36,359 Speaker 1: Thoughts podcast. I'm Tracy Alloway. You can follow me on 648 00:39:36,400 --> 00:39:39,080 Speaker 1: Twitter at Tracy Alloway and I'm Joe wi Isn't all. 649 00:39:39,160 --> 00:39:42,440 Speaker 1: You could follow me on Twitter at the Stalwart. Follow 650 00:39:42,520 --> 00:39:46,920 Speaker 1: our producers Carmen Rodriguez at Carmen Armand and Dashville Bennett 651 00:39:46,960 --> 00:39:50,400 Speaker 1: at dashbot, and follow all of our podcasts at Bloomberg 652 00:39:50,520 --> 00:39:54,200 Speaker 1: under the handle at podcasts, and for more odd Lots content, 653 00:39:54,239 --> 00:39:57,400 Speaker 1: go to Bloomberg dot com slash odd Lots, where we 654 00:39:57,480 --> 00:40:00,239 Speaker 1: have transcripts, we blog, and we have a we Clean 655 00:40:00,280 --> 00:40:03,040 Speaker 1: newsletter that you can get every week in your inbox. 656 00:40:03,400 --> 00:40:05,440 Speaker 1: Go sign up for it. Thanks for listening.