×
×
homepage logo

DAVID KRUSE

By Staff | Jul 13, 2016

This is the per dozen price of eggs on June 23 in my local Hy-Vee Food store:

  • Organic branded $4.49
  • Organic Brown $3
  • EB branded $2.99
  • Omega grade A white $3.39
  • Cage-free $3.39
  • Hy-Vee extra-large $1.79
  • Hy-Vee large 99 cents.
  • Hy-Vee grade A large 98 cents

There is definitely a lot of different prices for eggs. Hy-Vee has eggs for everyone – Foodies, rich people, the health conscious, customers who think they know best how to produce eggs, chicken welfare activists and customers on a budget who just want plain old eggs.

Filling the demand from egg customers ranges in cost for those consumers from 98 cents to $4.49 per dozen for eggs. The highest price is if you want to check every politically correct box possible in egg production.

The egg industry has surrendered to political correctness by beginning to transition to cage-free production. Most all the major producers are doing it.

Most companies will be selling all cage-free eggs within five to 10 years. When that happens, the price of cage-free eggs will come down from the $3.39 today, but it will not fall to the 98 cents dozen that Hy-Vee is selling its plain Grade A large eggs.

All consumers will pay a higher cost for this.

My family raised eggs for sale when I was a kid. I used to hunt eggs in the hen house. We had wall cages that they could enter and go as they pleased so they were not caged chickens.

I didn’t know how politically correct that we were back then. We started the chicks in a brooder house. We would grow them outside. They had their wings clipped so they would not fly away.

Over the course of a few nights in the summer we rounded them up using chicken hooks and they went into the hen house.

Ours was obviously not the only family with laying hens and I was not the only boy to have to hunt eggs. We were producing organic, cage-free, local eggs and did not know that a few decades later, that they would command a huge market premium.

What the Foodies want to do to egg production now is take us back to the 1960s as long as they can find consumers gullible enough to pay $4.49/dozen for eggs that are worth 98 cent/dozen.

I was tasked with picking the eggs out of the nests and would get pecked often enough in the process. I never developed much affection for the hens. My partner, Rod, told me that he handled it differently and wore gloves for protection.

A subscriber responded: “David, amazing that two people the same age can have the same stories. The hens had me buffaloed and knew they could peck me when I reached for the eggs.”

The subscriber was cautious and Rod wore gloves, but I took a more direct approach to the hen hand-pecking problem. It hurt when a hen would peck you when reaching into the nest to take the eggs. After a few times I decided that it didn’t hurt that much and most of it was the surprise.

So when a hen would peck me I would retaliate by pinching its beak and shaking its head side to side. Then I would stick my hand back in front of it and if it pecked me again I repeated the penalty. I did this until I could stick my hand back in front of it and it stopped pecking me.

You can train a chicken because I have done it. I doubt that the animal welfare activists would approve of my approach but I don’t think that I ever actually hurt a hen and I trained a lot of them so that we got along much better.

After all, they were hurting me first.

As far as I know, the eggs we produced would be considered organic, cage-free today. No one back then would pay 3 to 4.5 times the price of regular eggs for special marketing. They would have considered that stupid and I am biased toward that opinion yet today. However it is the job of every businessman to sell what the market wants and if they want politically correct eggs and are willing to pay up for them that is entrepreneurship.

This is a branding exercise where they create value in the minds of enough consumers to get deeper into their wallets.

One wonders how people say that the economy is so bad when, with the right marketing story, one can get customers to pay more for them.

Hy-Vee was criticized by the politically correct egg police for selling any eggs other than cage-free.

Hy-Vee released this response on cage-free eggs:

“As a company with roots deeply planted in the Midwest, we constantly have our finger on the pulse of the issues facing agriculture and consumers in this country. Many of our customers and neighbors are the same ones who carry out the monumental task of feeding the world.

“Unfortunately, several organizations and activists have used mainstream media and social media to put pressure on many national and regional retailers to offer only cage-free eggs to their customers, therefore forcing the egg industry to change the way it does business.

“It’s important that our customers know the following – ‘Customer choice is important to Hy-Vee. We strive to offer a wide range of products that cater to our diverse customer base, which has varying dietary preferences and economic circumstances.

“‘Today, our egg product selection already includes cage-free eggs as well as other varieties and price ranges.’

“Hy-Vee will not make irrational decisions. We will not be pressured to remove all egg options from our stores because of the adverse impact it would currently have on our customers. We need time to evaluate how moving to 100 percent cage-free eggs will financially impact our customers, especially those who rely on the value eggs bring to a tight budget.”

Kudos to Hy Vee for thinking about all their customers. I think that it is irrational to pay $4.49 a dozen for 98 cents eggs, but it is very sane to sell them to fools willing to pay that.

Cage-free eggs will increase the cost of eggs for everyone, as those producing the 98 cent eggs today increase their cost to accommodate the higher investment and production costs of the cage-free system.

Enjoy low-cost eggs while you can.

David Kruse is president of CommStock Investments Inc., author and producer of The CommStock Report, an ag commentary and market analysis available daily by radio and by subscription on DTN/FarmDayta and the Internet.

Please Enter Your Facebook App ID. Required for FB Comments. Click here for FB Comments Settings page