The Move Towards Megafarms
To start, I checked out a recent USDA article about the increase in enormous farms even over the past 20 years. Back in 1991, about 1 percent of our food came from non-commercial farms. There's been very little change in that. But, in 1991, we got just over 40 percent of our food from small farms. In 2007, we only got 22.2 percent from small farms. Large farms stayed about the same, providing about 30 percent of our food. The big change came in very large farms (those grossing over $1 million). They used to provide 27.9 percent of our food. Now they provide 46.5 percent of our food.
Now let's talk about the egg industry specifically.
Background on the Egg Industry
Did you know the U.S. is the world's 2nd largest egg producer? Here's what else you can learn from the USDA:
U.S. egg operations produce over 90 billion eggs annually. Over three-fourth of egg production is for human consumption (the table-egg market). The remainder of production is for the hatching market. These eggs are hatched to provide replacement birds for the egg-laying flocks and to produce broiler chicks for growout operations. The top five egg-producing States are Iowa, Ohio, Pennsylvania, Indiana, and Texas (see map).
The large majority of the U.S. table-egg production is consumed domestically. U.S. egg and egg product exports are a relatively minor proportion of domestic production. U.S. per capita consumption of eggs and egg products is around 250 eggs per person.
Here's a super awesome graphic from the USDA showing where all of the egg-laying hens are concentrated in the country:
Large Farms in the Egg Industry
There are over 100,000 small flocks of laying hens in the U.S. But they don't lay most of our eggs. The USDA even measures thousands of farms with 50 to 9999 laying hens, but together, those farms don't even produce 2% of the nation's eggs. More than three-quarters of U.S. eggs (76.2%) come from farms with more than 100,000 hens, with an average of over 250,000 hens per farm. The remainder come from farms with 10,000 to 99,999 hens. And between 2002 and 2007, the largest category of farms changed. There are now fewer farms in that category, with more chickens overall and more chickens per farm. According to the USDA, most conventional layers are caged in houses of 40,000-100,000 birds. (Organic laying hens, which I provide details on below, are required to be cage-free.) Iowa, the state that produces the most eggs, is home to 53,793,712 laying hens. There are only 41 farms in Iowa with more than 100,000 laying hens. Assuming that 76.2% of the hens are in that largest category (and I think that is probably a lowball estimate), the average "farm" in Iowa has about one million hens.
A look around the internets (with lots of help from Tom Philpott's most recent piece on the egg recall) provided more information on consolidation in the egg industry. It seems that the egg industry is going the way of broilers and hogs, with large, vertically integrated companies. But, it also seems that it is nowhere even close to the level of consolidation of those other industries yet. The model that the largest company, Cal-Maine, uses, which you can expect to see more of in the future, is one where one company owns the feed mills, processing plants, hatcheries, and perhaps the laying facilities. However, they might also contract out the egg laying, something that is commonly done in the broiler industry.
Here are some statistics from Egg Industry magazine, showing the largest egg operations as of December 31, 2009:
Egg Prices
How did the consolidation in the egg industry happen? Check out these two graphs. The first graph shows the prices given to the farmer, the wholesaler, and the retailer between 1960 and 2003. I'm not great at using the graphing function in Excel and for some reason I wasn't able to get the years into the graph.
Now, this graph shows the prices received by farmers compared with their average costs of production. The yellow line on the bottom shows profit which is often negative. Obviously some farmers make money, but this is an average. Clearly, many farmers are going out of business and all farmers are under extreme pressure to lower costs.
Organic Egg Production:
Growers today use many different types of systems to raise organic poultry, from free-range and pastured poultry to permanent poultry houses that allow birds to access the outdoors through paddocks. All organically raised herds and flocks must be raised separate from conventionally raised birds. . . Producers must provide living conditions that accommodate the health and natural behavior of the animals. Animals must have access to the outdoors, shade, exercise areas, fresh air, and direct sunlight suitable to their species and stage of production, but minimum levels of access have not been set. For poultry, indoor confinement must be temporary and justified due to weather, stage of production, health and safety of animal, and risks to soil or water quality. Growers are not allowed to cage organic poultry. Specific rules do not apply to stocking density or flock size. Instead, a certifier evaluates each farm's system to decide whether density is appropriate.
Source: Organic Poultry and Eggs Capture High Price Premiums and Growing Share of Specialty Markets, USDA, December 2006
Consolidation in the Organic Egg Market:
Data for organic eggs in 2003 show that the sector is fairly concentrated, with the top five companies holding approximately 55 percent of the market share and the top two companies controlling approximately 33 percent of the market (NBJ, 2004) (fig. 1). The two largest companies are established organic dairy and egg companies with national distribution capabilities. In addition, the list of the top ten egg companies selling organic eggs mostly comprises organic and specialty egg companies, which suggests that for now, conventional egg companies have not significantly expanded into the organic egg sector.
Source: Organic Poultry and Eggs Capture High Price Premiums and Growing Share of Specialty Markets, USDA, December 2006
What Do Those Labels Mean?
Want some all-natural cage-free free-range eggs? Here's what that actually means:
Labels regulated by USDA, FSIS
Free Range or Free Roaming. Producers labeling poultry as free range or free roaming must demonstrate to USDA, FSIS that the poultry has been allowed access to the outside. USDA regulates the label for poultry, but not eggs. No specific amount of time outside or stocking density is required. This label does
not require third-party certification.
Natural. A product that contains no artificial ingredient or added color and is only minimally processed (a process which does not fundamentally alter the raw product) may be labeled natural. The label must explain the use of the term "natural" (such as no added colorings or artificial ingredients; minimally processed.) Unlike the organic label, the natural label does not have to meet requirements for feed, antibiotic use, or pasture. The label does not require third-party certification.
No Antibiotics. Producers may include the terms "no antibiotics added" on labels for poultry products if they have provided sufficient documentation to USDA, FSIS demonstrating that the animals were raised without antibiotics. The label does not require third-party certification.
No Hormones. USDA does not permit the use of hormones in poultry production. Therefore, the label "no hormones added" cannot be used on the labels of poultry unless it is followed by a statement that says "Federal regulations prohibit the use of hormones." USDA does not allow a "hormone-free" label.
Unregulated labels
Cage-Free. Unlike birds raised for eggs, birds raised for meat are rarely caged prior to transport. Thus, this label on poultry products has virtually no relevance to animal welfare. The label can be helpful to consumers when it is placed on egg cartons, as most conventionally raised laying hens are kept in cages; however, the label does not guarantee that the bird had access to the outdoors. In addition, this term is not regulated by USDA, and the label does not
require third-party certification.
Pastured Poultry. The term refers to poultry management using a modified free-range system whereby birds are raised on pasture but provided with shelters that can be moved by hand or tractor. Poultry is often moved daily. Chickens can get up to 20 percent of feed from pasture forage in these systems. This term is not regulated by USDA, and the label does not require
third-party certification.
Source: Organic Poultry and Eggs Capture High Price Premiums and Growing Share of Specialty Markets, USDA, December 2006 |
