Bird Flu Outbreak Provides Opportunity for Michigan’s Egg Industry
The bird flu outbreaks that decimated the egg industry left Michigan, one of the nation’s largest egg producers, largely unscathed.
Grocery shopping is a daunting task due to record prices for basic foodstuffs. The agony of the wallet is perhaps most visible at the egg cooler.
The average price of a dozen eggs peaked at $4.25 in December, up from just $1.50 before the pandemic. Prices have since dropped to an average of $3.29 per dozen.
The egg market is what economists call inelastic – simply put, eggs are a staple in American households and consumers will sacrifice elsewhere to buy and consume them. This is good news for chicken farmers who have been devastated by the outbreak that has claimed one in 10 laying hens in the United States since last year.
It’s even better news for Michigan’s large egg-farming infrastructure — more than 4 billion eggs are produced each year in the state, or about 4% of national production — which is heavily invested in cage-free operations, a requirement by the end of 2024 from regulators as-is.
“Farms that have been hit by avian flu are hurting, but that production (to meet demand) currently on the market must be met by other companies,” said Nancy Barr, executive director of Michigan Allied Poultry Industries, the trade association for egg, chicken and turkey farmers of Michigan. “High egg prices are helping farmers keep producing. No one wants bird flu to hit any of their co-workers and everyone is on high alert, but Michigan farmers have done an incredible job of protect their herds and this is an opportunity.”
More than 58 million chickens have died or been culled in the current bird flu outbreak, which began about a year ago, in 47 states. Michigan, the sixth-largest egg-producing state in the United States with an economic impact of $1.4 billion, is not one of those states and has recorded no outbreaks among its roughly 15 million hens. in 17 farms.
To put into context the seriousness of the bird flu epidemic, it has killed, forced the culling of approximately 10% of the US population of laying hens over the past 12 months. The COVID-19 outbreak has killed less than 0.3% of the US population over the past three years or so. For birds, this is a far worse pandemic and a direct result of the egg price shock. Dead hens do not lay eggs.
The success of Michigan’s egg-laying industry – which is controlled by eight companies, including Saranac-based Herbruck’s Poultry Ranch Inc., which is the 10th largest egg producer in the United States and supplies all McDonald’s in east of the Mississippi River — stems from observing previous outbreaks and investing in biosecurity, said Ernie Birchmeier, livestock and dairy specialist for the Michigan Farm Bureau.
“We treat bird flu every year during the migration process in the fall and spring. When wild birds mix with farmed birds, like when children go to school, the disease spreads,” said said Birchmeier. “Our farmers have learned and have very strict biosecurity measures in place. You cannot just walk into a farm and visit the birds. There are strict biosecurity protocols which include washing and covering clothes and documenting where you went. This even goes for vehicles that enter farms with washing and disinfection.”
The last major outbreak, between December 2014 and June 2015, killed more than 50 million birds and hammered Michigan turkey farmers. And if once bird flu is detected in a commercial flock, the whole flock must be euthanized according to the rules of the United States Department of Agriculture.
Much of these new biosecurity measures come with expansion investments to comply with industry demand and government regulations on cage-free birds, said Travis Jones, CEO of the financial services company. GreenStone Farm Credit Services.
Thanks to these investments, Michigan has seen a 50% increase in the number of breeding laying hens since 1995, according to GreenStone. Almost all chicken coops in the state are or have been renovated.
Family-owned Herbruck’s began a $76 million investment years ago to expand its farm operations, much of which was to meet the cage-free demand of its customers, like McDonald’s, Kroger, Meijer and others.
Current high egg prices are helping farms recoup some of that investment, Jones said.
“A lot of our farmers have seen cycles like this before,” Jones said. “The advantage is limited because most of these operations have long-term contracts with their customers that limit the advantages and disadvantages of the market. But it is certain that farmers benefit from higher prices, but it is a controlled advantage. continue these investments insofar as they respect the game plan.”
Egg prices are expected to eventually come back down, and with them, the cyclical nature of the industry swings the other way. But with investments and protections in place, Michigan’s egg industry can continue to grow — as long as its breeding remains disease-free.