A Major American Egg Farm Just Lost 90% of its Chickens

Egg prices have come down a lot since their recent record and bird flu has largely faded from the headlines. But the epidemic is still raging and, per one farmer, risks becoming endemic in the US. Glenn Hickman is president of Hickman's Egg Ranch in Arizona, one of the largest egg producers in the US. You might remember him from our series last year, Beak Capitalism, in which we explored some of the thorniest issues facing the US economy through the medium of chickens. Well, news from the Hickman farm since then hasn't been good. A bird flu outbreak has led to the destruction of 90% of Glenn's chicken stock. We talk about the impact on Glenn's business, egg prices, and why the US isn't vaccinating its chickens. Check out Beak CapitalismRead more: To Understand America’s Egg Crisis, Look to China’s Pork Only Bloomberg.com subscribers can get the Odd Lots newsletter in their inbox — now delivered every weekday — plus unlimited access to the site and app. Subscribe at bloomberg.com/subscriptions/oddlotsSee omnystudio.com/listener for privacy information.

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• 1:57Tracy Alloway?

  Hello and welcome to another episode of the Odd Lots Podcast. I'm Tracy Alloway.

• 2:02Joe Weisenthal?

  And I'm Joe Weisenthal.

• 2:03Tracy Alloway?

  So, Joe, just a few months ago, you will remember, I'm sure, egg prices were a really big deal. And we had all these headlines about eggs costing like $10 a dozen and shortages of eggs at supermarkets, or eggs being rationed. And it even became a sort of political touchstone. It featured in the elections. And fast forward to today, and it feels like no one's really talking about egg prices anymore. Egg prices paid to Midwest producers, they've gone from like $8.24 to something like $3.44. So we've seen a really dramatic decline. We're recording this, by the way, on June 3, which happens to be National Egg Day.

• 2:48Joe Weisenthal?

  When you look at the price, you can see why no one's talking about it anymore, right? There are certain charts in the world that we only talk about when they're going up. There are others that we only talk about when they're going down. Prices for things like certain food items, we tend to only talk about on the way up.

• 3:03Tracy Alloway?

  Yeah, but here's my big question. As far as I can tell, bird flu is still very much witness. So, you know, the thing that caused egg prices to spike in the first place. And so I'm very curious why prices have come down. How much of it is just people who stopped buying eggs because they were so expensive versus how much of it is maybe the poultry supply got built back up. And I'm happy to say, we have the perfect guest to discuss all of this, although the context in which we're talking is actually very sad. We're going to be speaking with Glenn Hickman. He is the president of Hickman's Egg Ranch in Arizona, one of the largest egg producers in the US. And you might remember Glenn from

• 3:45Tracy Alloway?

  our special three-part series, Beak Capitalism, in which we talked about soaring egg prices and avian flu. And unfortunately, there's been a pretty dramatic development for the egg ranch since then, and they have just lost 95% of their chickens to the flu.

• 4:02Joe Weisenthal?

  Yeah, I mean, it's an absolutely staggering number. One thing before we get into the conversation that I think is really striking is that you mentioned that prices have come down by basically any measure, and I'm looking at that Midwest delivery number that's gone from over 800 to 344. I mean, compared to years before it, I mean, that was below 100 for a long time. So even though prices have come down from that recent spike, eggs are just, they're very expensive these days. And so there's clearly this like persistent issue and something has changed. Maybe it's bird flu, something else that continues to put sustained upward price on eggs.

• 4:39Tracy Alloway?

  Yeah, so we need to talk about all of this. So Glenn, welcome back to the show. I wish it were under better circumstances.

• 4:47Speaker 05

  Well, thank you for having me.

• 4:48Tracy Alloway?

  So why don't you go ahead and tell us what exactly is going on? Like, what's the situation over at the Egg Ranch?

• 4:54Speaker 05

  Sure, we have four laying farms here in the state of Arizona. Our farm down south in the city of Maricopa got sick with bird flu in November, and then it was when we tried to refill the farm in January, it got reinfected again. So that farm is still just barely populated. They've got 340,000 chickens down there. But two weeks ago on Friday, our biggest farm in Tonopah, Arizona, got sick with bird flu. And subsequent to that, our two other farms in Arlington, Arizona, have gotten bird flu, and virtually all of our replacement pullets have gotten bird flu. So right now, today, we've got a total infection of about 6 million birds that

• 5:39Speaker 05

  we're in the process of depopulating.

• 5:43Joe Weisenthal?

  Bird flu comes and goes from time to time in the US. Can you talk a little bit about this current, what seems to be a sustained wave? And of course, the first time we talked to you, I think was either in late 2022 or

• 5:53Tracy Alloway?

  Late 2022.

• 5:54Joe Weisenthal?

  Late 2022. And then that went away, and then it came back. Do you have an explanation of what is going on, big picture, that this is a sustained, persistent problem in bird health?

• 6:05Speaker 05

  Sure, when this round of bird flu started on the east coast in February 2022, it was still thought to be a seasonal challenge that was carried by migratory waterfowl. Now, I wouldn't say that it's gone away and came back. I'd say it's more ebbed a little bit, Joe.

• 6:23Speaker 00

  Mm-hmm.

• 6:24Speaker 05

  That we've never, ever, since those first flocks got sick in 2022, we have not been able to fully rebuild our nation's laying flock before the next wave of bird flu starts. So, right now, what we know to be true is it's endemic in several environments. We know that we've had Wildlife Services out trapping sparrows and pigeons and vermin and ground squirrels, those kind of things, and it's all testing positive for bird flu. So, it's now endemic in our environment, and it's something that, you know, the pressure to get inside the barns where the chickens are is the 24/7, 365 pressure.

• 7:04Tracy Alloway?

  So, on this note, this is basically my question. Egg prices have come down a lot. Why exactly is that if bird flu is still with us, if we haven't really rebuilt the nation's chicken supply? Is it down to demand destruction and eggs just getting too expensive? Or is it all the eggs we started importing? What exactly accounts for the big fall in price?

• 7:25Speaker 05

  Tracy, I'm not an economist, but I will tell you that the high prices did cause some people to seek alternatives for breakfast, whether it's yogurt and berries or, you know, peanut butter on some toast. And we've also had eggs allowed in from other countries that have taken over some of the industrial needs. And so, we also, traditionally, in the summertime, egg prices are softer because of a lessening in demand. People just don't have the same routines in the summertime where they get up and eat a hot breakfast before heading out the door.

• 8:01Joe Weisenthal?

  I have to say, I just find this to be a very disturbing, like a deeply disturbing story about the US economy, or something about the US, which is that you look at this chart, and I extended it going back further, and you just have this very quiet sideways line in egg prices that moves around very little bit. There are a couple of modest spikes. And then in the last few years, there's been this surge. And so even with this big price drop, it's come down. And you mentioned that it's become endemic. Like, is that a, is it a policy failure? Is there something we could substantively do different? And in your view, is there any prospect for like, a 2013 style supply and demand equation?

• 8:43Speaker 05

  Joe, we'd like to have nothing better. We can protect our flocks. And I'm just gonna say, we're very, very frustrated. Right now, today, our country manufactures vaccine for poultry to protect them against avian flu. And we ship it to countries in Europe and other places. So, we're making the vaccine here every day, and we're protecting flocks in other countries. We've been unable to access that same vaccine. I think we have it caught up in some kind of bureaucratic merry-go-round, and we just can't seem to get it pushed over the fence line. I know that we have industry officials meeting with

• 9:23Speaker 05

  the USDA. But I think it's gonna come down to, President Trump is gonna have to say, we want this nonsense to stop, and we want to start vaccinating these flocks.

• 9:33Tracy Alloway?

  Has the Trump administration done anything in terms of bird flu? Because I know Trump has talked about egg prices and taking credit for it. But I've been having difficulty like identifying specific policies or changes that they've actually done since January.

• 9:48Speaker 05

  Yes, very much, they've become involved. They allocated, I think it was $800 million towards different mitigation, you know, biosecurity programs, research, and such like that. But there needs to be no more research on vaccine. It's available right now. And basically, it's being held up because of the meat bird industry that doesn't want to vaccinate their flocks.

• 10:14Tracy Alloway?

  Right, because then they can't export them to certain countries that don't allow vaccinated birds.

• 10:18Speaker 05

  Yeah, they cannot export their surpluses to other countries if they were locked out of those markets because they were vaccinating their birds.

• 10:27Joe Weisenthal?

  This is such an amazing example of some of the pickles of international trade. It's like, we sell vaccines abroad so that other countries can, you know, avoid the bird flu for eggs. And then we don't want to use it, not because of the eggs, but because those countries don't want to take vaccinated chicken. Before we get into what happens now in terms of rebuilding the flock, can you just walk us through a little bit more the last several weeks? Like, when did you realize? Like, what is the moment where you realized you have to do a massive call? And what's that like?

• 10:59Speaker 05

  Well, we started to see a few sick chickens on May 14th. And, you know, it wasn't a big increase. And so we didn't think too much about it. On May 15th, we saw a bigger increase. We took swabs of the sick chickens down to the University of Arizona. Their lab detected bird flu on the 16th. And then we've been in a massive operation to depopulate our farms ever since then.

• 11:25Tracy Alloway?

  Do you have any idea of how the flu got in? Because I know you had a lot of protective measures in place, including laser beams to scare away wild birds and things like that. What's your theory for how the chickens got sick?

• 11:39Speaker 05

  Tracy, I don't know why the government wants to say this virus is not airborne, but it is airborne. We didn't track this in on someone's shoe. We didn't have a wild bird that was sick get into one of the barns. That's just not happening. What happens is it's airborne, it rides in on a dust particle. And, you know, these barns, we have to ventilate and we have to bring in fresh air for the birds to breathe. And there's just no way to filter that kind of volume at that kind of filtration level. So that's why we need a vaccine. There's no mechanical ways left that our industry has not tried to keep the virus on the outside.

• 12:21Joe Weisenthal?

  Talk to us about the process of rebuilding a flock, step by step. What do you actually have to do and how long does that take?

• 12:29Speaker 05

  Well, generally speaking, our replacement flocks are geared to replace our flock every 20 months. So for us, it's roughly 300,000 birds a month that we bring in and we grow to adult size to to put in the in the layer barns. That's a staggered 5% per month for 20 months to get our flocks replaced. So when we've lost everything, basically, within a two-week time span, it's still going to take us 20 months to totally rebuild that flock. But we're going to be suffering through this for quite a while.

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• 15:43Tracy Alloway?

  Okay, so I believe you get compensated for chickens that you have to cull, although maybe it changes when we're talking, you know, 6 million chickens versus 100,000 or something like that. And I know that you've said that you're not going to be able to fulfill your contracts with customers going forward because of all of this. Talk to us about the financial position that this leaves you in.

• 16:08Speaker 05

  Well, we're part of an egg marketing cooperative. So we do have access to some of our other members' eggs. And that's what we're doing right now, and bringing those eggs in and making sure that the store shelves stay full. With regards to compensation from the government, we get paid, not just we, but anyone in our industry gets paid to depopulate the flock, clean the facilities, eliminate the virus, and they approximate the cost of the chicken to repopulate that. They don't compensate you for the loss of income. Like, again, in our instance, we will be below full production for the next better part of two years.

• 16:46Joe Weisenthal?

  How are you going to, as a business? What is that going to mean when you think about the future of the business, but the short term, to have so many months of lost income now?

• 16:54Speaker 05

  Well, thankfully, we have, you know, we have good relations with our banks. We have, you know, some resources of our own. And so we feel like we're going to be able to take the time to rebuild those flocks and such. But You know, I think the challenge that we're going to have is rehiring the people that we need that have been trained, some of them been with us as long as I've been here. And so that loss of institutional knowledge is what we're going to have the hardest thing to try to replace.

• 17:23Tracy Alloway?

  So I know you're not an economist and you're not in the business of making price forecasts, but do you have a sense of what's going to happen to egg prices from here? Not just because of the loss of, you know, your millions of chickens, but also because it really seems like bird flu is, as you said, becoming endemic in the U.S.

• 17:43Speaker 05

  Well, there's two things. I mean, there's supply and there's demand. And so we are bringing eggs in from other countries that's helping on the supply side of things. You know, as a, as kind of an interesting point, we are bringing eggs in from Mexico where they routinely do vaccinate their flocks and we're bringing those eggs in. So that's one of the ways we're going to be able to address this. But frankly, you guys, we're not going to have a steady supply of eggs that we've enjoyed, you know, for the past hundred years if we don't stop the spread of bird flu. And so the only way to do that now that this has become, you know, something we live with all the time is to vaccinate our flocks so we can protect them.

• 18:28Joe Weisenthal?

  Does everyone else in the world use chicken vaccines at this point?

• 18:32Speaker 05

  No, I don't think everyone does. I know that there's several European countries that do. I know that Mexico vaccinates their flocks and I think it's gaining wider and wider spread acceptance every place.

• 18:44Joe Weisenthal?

  Okay, you have, you know, now there's sort of multiple years of this. And even the re-establishing of the flock feels like it's going to be a risky process, right? Because you're going to spend, you know, maybe 20 months or close to two years getting back to full capacity, but then of course, the flu could strike again. Do you think that like, when we think about the sort of sustained steady rate of where egg prices are going to go, maybe it's not you because you have scale and you have money and you have good access to capital, but that essentially you see farmers sort of depart the egg game, depart the egg industry because it appears and maybe accurately to be higher risk than it used to be due to the disease being endemic.

• 19:26Joe Weisenthal?

  And then there's just sort of, you know, less competitive pressure and, you know, competitive pressure drives prices lower.

• 19:32Speaker 05

  Well, Joe, I think we're seeing it already. There's been lots of farms in the last three years that have sold out to companies that want to continue to shoulder this kind of risk. And I think that we're going to continue to see that happen. You know, the egg industry, by and large, are all family-owned farms. And so, you know, it does test one's commitment when, you know, we cannot control our future.

• 19:58Tracy Alloway?

  All right, Glenn, we're going to leave it there. But thank you so much for coming on All Thoughts again. And as I said, I wish it were under better circumstances, but we appreciate you explaining everything that's happened.

• 20:10Speaker 05

  Tracy, I appreciate being able to kind of tell our story and try to keep this in the in the public eye. We do need a solution.

• 20:18Tracy Alloway?

  Thank you, Glenn. That was great, as always. And as I said, really appreciate you taking the time, given everything that's going on.

• 20:24Speaker 05

  Okay. Hey, thanks, guys. Have a good day.

• 20:41Tracy Alloway?

  So Joe, obviously appreciate getting that update on the business from Glenn, because, as I said, eggs and bird flu have, to some extent, fallen out of the headlines. But like, they're still going on in the background. And it's still a really interesting case study in industry economics. As you pointed out, prices are just more volatile than they have been for much of history. And this is something that you find, I think, increasingly, and especially in agriculture, where you have these big one-off shocks, it's really, really difficult for the market to recalibrate itself.

• 21:15Joe Weisenthal?

  Yeah, it seems very plausible to me that this could just be the end of cheap eggs, right? Because, you know, you have this consolidation, you have this persistent added cost because of the risk, etc. So even when we get this decline, they're still much more expensive than they used to be. You have less competitive pressure, etc. And I find this to be like deeply disturbing. Like this, to me, seems like a very crystal clear example of sort of society going backwards. And the reason I think eggs are important is because arguably, sort of cheaper and cheaper protein is the hallmark of a sort of rising standard of living. This really feels to me like we are going backwards as a society when this is happening.

• 21:57Tracy Alloway?

  Well, and when this happens, it also becomes harder and harder to, I guess, gauge the future of the business.

• 22:03Joe Weisenthal?

  Yeah.

• 22:03Tracy Alloway?

  And figure out how much you're supposed to invest in it.

• 22:05Joe Weisenthal?

  Yeah.

• 22:06Tracy Alloway?

  If you're getting these wild swings in prices and then the risk is, you know, you have overcapacity and then undercapacity and then overcapacity and it just keeps oscillating forever.

• 22:15Joe Weisenthal?

  And like the essence of like things getting cheaper over time is like sustained competitive pressure. Everyone wants to invest and everyone wants to eat each other's margin, right? And that's like, you know, when capitalism is working at the best. And you're not going to get that at a time when you have fewer and fewer participants and more and more reasons just not to even take the risk in the first place. And it clearly is one of these situations, as Glenn was emphasizing, where you have to have a quote, you know, a public health response. And the market isn't going to do it on its own in terms of either eliminating bird flu or eliminating the risk of bird flu. And so you need to have that centralizing force and right now it doesn't seem like it's there.

• 22:55Tracy Alloway?

  My analog for all of this is swine fever in China. There was a really big outbreak there. Did you know that China lost 30 million small to medium sized pig farms between 2007 and late 2024?

• 23:08Joe Weisenthal?

  They probably had like half a billion of them, right? Like, no, yeah, no, it's a really.

• 23:13Tracy Alloway?

  Illustrates the point about the big getting bigger. And in fact, like the share of small pig farmers in the market went from like 74% in 2007 to less than a third in 2023.

• 23:24Joe Weisenthal?

  It does seem in the, on the flip side, it does seem like this is the story with agriculture period. And I'm, I recall our conversation with the Lentil King, talking about how like, you know, even what we might think of as a quote, family farm, unquote, in Canada might have, you know, hundreds of thousands of acres at this point.

• 23:42Tracy Alloway?

  I think it's a little different in China, but you see the point I'm making.

• 23:45Joe Weisenthal?

  Yeah, yeah, no, I definitely see the point that you're making. It just seems like there are so many forces that are conspiring towards this, the big getting bigger within agriculture. And when you look at the pricing and anyway, I find it like deeply worrying as like the trajectory of society that we can't get this under control.

• 24:03Tracy Alloway?

  Well, on that happy note, shall we leave it there?

• 24:05Joe Weisenthal?

  Let's leave it there.

• 24:06Tracy Alloway?

  This has been another episode of the Odd Lots Podcast. I'm Tracy Alloway. You can follow me at Tracy Alloway.

• 24:11Joe Weisenthal?

  And I'm Jill Weisenthal. You can follow me at TheStalwart. Follow our producers, Carmen Rodriguez at Carmen Armin, Dashal Bennett at Dashbot, and Kale Brooks at KaleBrooks. For more Odd Lots content, go to Bloomberg.com/oddlots, where we have a daily newsletter and all of our episodes. And you can chat about these topics 24/7 in our Discord, discord.gg/oddlots.

• 24:31Tracy Alloway?

  And if you enjoy Odd Lots, if you like it when we catch up with egg farmers, then please leave us a positive review on your favorite podcast platform. And remember, if you are a Bloomberg subscriber, you can listen to all of our episodes absolutely ad-free. All you need to do is find the Bloomberg channel on Apple Podcasts and follow the instructions there. Thanks for listening.

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