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Eggheads is the go-to podcast for egg industry professionals who are interested in leadership and innovation in the egg world. Host Greg Schonefeld explores the evolving world of modern egg farming, from the latest in cage-free innovations and organic certifications to navigating the economics of large-scale production. Whether you're an egg producer, supplier, or involved in poultry genetics, this show provides the insights and expert discussions you need to thrive in the industry. Crack open the science, strategies, and stories behind the egg industry’s biggest challenges and opportunities.
Dr. Kay Russo: We can do it. So let's quit making excuses.
Do not let politics get in the way of public health, of animal health, of science because if you put those two things on opposite sides in a tug of war, the producer's going to lose.
Greg Schoenfeld: Hey, it's Greg Schoenfeld, and this is Eggheads.
Today, we're bringing back the Scramble, our round table format, where we tackle the biggest issues facing the egg industry. Unfiltered and unscripted. And today's topic, the chaos in the egg market.
Prices have been on a roller coaster, avian influenza isn't letting up, and farmers are navigating some of the toughest conditions we've seen in years.
To break it all down, I've got three experts joining me.
Brian Moscogiuri, keeping a pulse on the market and why volatility is the new normal.
Dr. Kay Russo, explaining the relentless impact of bird flu and what we can do about it.
And Jacques Klempf offering the farmer's perspective. How do you survive when everything is stacked against you?
We'll dig into what's really happening, why it matters, and where we go from here. We're spending some extra time together on this one, but trust me, it's worth it. We're in trying times as an industry, and we've got a team here who can shed some real insights and we're bringing their insights as uncut and unfiltered as you can find it. Let's get into it.
Maybe we start with what's been driving this whole thing. Any signs of things letting up on the future of bird flu or no?
Dr. Kay Russo: Ultimately, in the last two weeks, up until the tail end of this previous week, it's been fairly quiet with respect to large complexes getting hit by H5 flu. We did see an announcement just come through over the weekend that a layer complex in Indiana with over 1.3 million birds was hit. It's really to be determined whether we're going to continue to see the degree of sustained losses that we are.
Some additional insights is that we have seen a new strain emerge in Mississippi that we haven't seen since 2017, H7 and 9. And so again, to be determined what the behavior of that virus is going to be as it moves its way into the United States with the migratory birds.
A lot of us are bracing and hopeful that perhaps things are slowing down as the weather warms. But again, we've recognized that this virus, particularly the H5, has expanded its host range which makes this a far more complex situation as we move into the summer months even.
Greg Schoenfeld: Brian, does that line up with what you're seeing, or is that kind of tracking with the markets lately?
Brian Moscogiur...: Yeah. We haven't really seen a commercial layer flock hit in the last two and a half weeks outside of about 200,000 birds.
Kay, I believe the Indiana facility that you're referencing that was positive over the weekend was a pullet facility for one of the farms that have already been hit.
So what that does is it pushes back those replacement birds now, and that farm could potentially be without production for the rest of the year or beyond, whenever they can get now pullets to replace the birds that they've already lost.
We also had a broiler facility in Pennsylvania test positive and another pullet facility in Iowa test positive, very close in proximity to commercial layer facilities.
So I agree with Kay. I just don't think we're out of the woods yet, and there's a lot more risk as we go through this spring migratory period and some of these areas that have been hot remain hot.
Greg Schoenfeld: Brian, when a pullet facility gets hit, is the implication that... Maybe that's not an immediate price impact, but it likely will affect future pricing?
Brian Moscogiur...: Well, in a way.
Really what it does is messes up the recovery schedule, pushes the timelines back, and it also impacts the farm's process in which they take birds in and out, rotate through older layers, bring in younger, more productive birds, and those schedules could be disrupted for the lifecycle of that farm and of the layers that are coming up behind it.
There's also a bottleneck in terms of the amount of pullets that are available to repopulate these facilities because the breeders, they're not forecasting this additional need and some people have said replacement pullets could be pushed back as far as the middle of 2026 at this point. So the more pullets we lose in the system, the further the timeline goes in terms of potentially fully recovering and getting back to normal supply chains in the United States.
Greg Schoenfeld: Jacques, what are you seeing and hearing out there?
Jacques Klempf: Well, Brian, you bring up a great point is that the holy grail to every egg producer is their flock flow. And so when that gets disrupted, what happens is you have flocks that should be taken out, but they're still in place because you don't have a replacement especially with the high egg markets.
Dolph Baker said it to me once, "There's no sweeter smell than rotten eggs in the pullet house."
They're laying eggs in the pullet house because you don't want to move the birds that are laying larger eggs to get the better markets.
The same thing happened to one of my friends out in Arizona. He had a complex that came down with AI. After he got it all cleaned up, he brought some pullets in and they contracted AI too.
I think my experience is all of the other barnyard animals, companies do not want any vaccines for a lot of different reasons, mostly exporting to Europeans and Russia. But I think that we've got to start somewhere because this has been ridiculous.
The cycle of the egg market going to $8 and 68 cents, and now it's dropping 50 cents a day. I know it can mutate, and we've got H7 and H9, but we got to start somewhere because this is just unprecedented really.
Greg Schoenfeld: Jacques, yeah, in these times, and until recently we saw these rising prices, but yet this thread of risk of getting hit by AI at any moment, I wanted to ask you sitting in the seat of a farmer, how do you operate in these times? Because today there's not a vaccine.
Jacques Klempf: No. You wake up every day just praying that your flock is healthy and that nothing has happened. It's really devastating at the farm level.
Another friend of mine up in Michigan, they had six million birds they had to euthanize and they had to lay off 400 people.
You have your biosecurity on the farm, you make sure that that's intact, and you be very strict with what's coming on the farm, what's going off the farm.
But migratory birds, in my opinion, I believe it's airborne, I believe the fecal matter... All these complexes have these huge fans drawing in air to keep the houses cool and comfortable, and I believe some of those spores from the fecal matter is getting into the layer houses.
I talked with Sherman Miller at Cal-Maine, and they had a complex in Kansas that went down, and he said where they first saw it was in the back of the house up on a third level. He said it just was a very peculiar way to contract. That's where they first saw the signs of AI.
Right now, we don't have...
At the trade show, there's a lot of folks out there that are trying to do different things to prevent AI, but none of them are 100% effective.
Greg Schoenfeld: I was going to say, what's interesting to me is what I didn't hear. I didn't hear, "Oh, well, you just buckle down on biosecurity and you get 100%." I think maybe part of your theory is that there's some uncontrollables in here.
Jacques Klempf: Yeah. I do believe that.
If your complex is in a migratory pattern, there's a much higher risk.
We were fortunate we had one complex with 1.5 million, and then we had a lot of contract production, two or three houses, and they were spread out. So we had a lot more flexibility than some of these producers that have four million birds in one complex when they have an outbreak. And we also had an offline processing plant so we can move eggs into that plant and process and package.
Greg Schoenfeld: Kay, when you hear those, does that resonate with what you're seeing, or do you have a different take?
Dr. Kay Russo: I think you hit the nail on the head.
These are farms. We can't expect them to be BSL-3 level facilities.
We can be as biosecure as possible within that context. But at this point, with the degree of virus circulating in the environment, whether it's coming from migratory birds or a dairy farm next door, or some other intermediate hosts that we haven't yet identified, the barrier to keep that virus out has gotten extraordinary.
When we look at biosecurity and we say, "Okay, that can likely prevent 80% of infections," probably about that, we need to look at additional tools that we can overlay on top of biosecurity in order to improve our capacity to keep that virus out.
That's why it's important that we start to consider tools like vaccination because... I talk about it like a picket fence. Biosecurity accounts for 80% of those pickets, but if you overlay vaccine on top, that could account for an additional 20% and at that point, you're getting closer to 100.
Ultimately, I think that is going to be essential as we look at our capacity to maintain food security in our own country. And I'm sensitive to the fact that exports could suffer because of that, and I would implore upon the administration to do what they can to mitigate that. But at this point, we also need to consider the food security of our United States in general. And at this point, it's compromised, and we've seen a reflection of that with egg prices within the last year.
Greg Schoenfeld: Kay, one thing that's come up before, so these exports, it's really tied to the broiler market. That's where the exports are really taking place. Why does the egg market have to be married to that whole situation? Because, Brian, I guess I understand from the past there are some exported eggs but pretty low percentage of overall production, right?
Brian Moscogiur...: It's about 3%. On a normalized basis, it's been as high as 5%, but two to 3% of total production is typically exported.
Greg Schoenfeld: That's not what's stopping us on the vaccine then, it's the broiler market.
Jacques Klempf: Yeah.
Dr. Kay Russo: Yeah, it is.
And ultimately, it's all or none when we look at trade deals as they exist today.
But when we go into any vaccine program, it's important that we characterize that. It's going to be a more targeted type program. The commercial broilers are not going to be vaccinated. We will target layer hens, pullets. We will target potentially turkey breeders.
But ultimately, the goal would be is in renegotiating these trade agreements with different countries that we somehow separate those three industries so that we can maintain that export, not compromise it, yet use the tools we need to keep our birds alive within the layer in turkey industries.
That's not my job. So I'm sensitive to that.
The comments from the cheap seats are certainly ones that are easy to make, but my job is to ensure animal and public health and at this point, we're failing.
Greg Schoenfeld: Yeah. I'm guessing why you're looking at that is because, well, you just want to understand what gets in the way of vaccines because as you said, you believe that can get us closer to the 100.
Jacques, you sounded like you had something to add there.
Jacques Klempf: Well, yeah. Kay makes a great point. But I was...
Many years ago, UEP has a legislation, I guess, checkoff basically for egg producers provide money to try and influence our congressmen to help us with things that we need.
We've been very unsuccessful, mainly due to the broiler and swine and all the other industries that don't want the government mandating anything as it relates to vaccines or even...
HSUS was walking down the aisle with us hand in hand ready to accept a caged environment but with more room for the hens. And when that broke off, that's when they started going state by state for this cage-free status. And it's been a mess for those states that have gone cage-free.
Matter of fact, some states have repealed it back, especially during the egg shortage. I know Arizona moved it back and allowed for another couple of years before it'll be a mandate.
Greg Schoenfeld: Jacques, are you saying there that cage free is making the disease worse than it otherwise would be? Is that your opinion?
Jacques Klempf: Well, and I wonder about the cage free because generally if a state gets AI, the state vet will mandate that all hens stay inside the barn with no outdoor access, because obviously the opportunity to contract AI is a lot more if the birds are outside.
I just think that the cage free has just made everything more complicated and unnecessary. The birds don't live as long, they don't lay as many eggs, mortality is twice as high. It's not better for the consumer or the farmer.
Greg Schoenfeld: I guess it's just made production more difficult.
Jacques Klempf: Yeah.
Greg Schoenfeld: Do you think, has it increased the spread of the disease or are you more referring to just in general, made it more difficult to produce?
Jacques Klempf: Like I said, when you have a situation where AI is taken out 35 million layers or whatever it's at now, 40 million, it just makes things much more difficult. Those flocks are much smaller and you're using the same space but with less ends.
Greg Schoenfeld: Kay, do you have any insights on whether cage-free has contributed to issues here?
Dr. Kay Russo: Greg, I'd have to do some digging on that. There is data out there. To be honest, I haven't looked close enough at it.
We know obviously there's a lot more companies that are going cage free as a result of consumer interest in those products. And so whether that's correlation or causation, I'm not entirely sure.
But another somewhat unpopular opinion is as we look at consolidating these farms and increasing farm size for purposes of efficiency, which is what we do in production animal medicine, we try to spread our costs out, some of these farms have gotten pretty big, and so when they do get hit by AI, the degree of loss is exceptional.
I think in talking with veterinarians and different companies and looking at future tactics to mitigate risk, more and more people are talking about spreading that risk out by reducing farm size. Good, bad, or indifferent, I know that will impact efficiencies but that is one way and one reason.
For instance, Canada hasn't lost the degree of birds that we have because their farm sizes are quite a bit smaller even though they have considerable outbreaks.
As we look at strategies, whether it's vaccination, improving biosecurity to the best of our ability, spreading out the risk is probably one we ought to consider as well.
Broiler farms are typically not the size of layer firms. So when they do get hit, it's not as many numbers. Whether you agree with me or not, that may be a tactic moving forward that we need to employ.
Greg Schoenfeld: Jacques, what do you think about that? Is that a feasible strategy?
Jacques Klempf: Absolutely.
I think even if you look at Cal-Maine, they don't like complexes that are over two million layers. I don't think they have any that are over two million. All of their complexes are one million, 1.5, 1.8, and they've got a lot of different plants and complexes throughout the country.
Just by design, we were the same way. We had one complex with one and a half million, and then we had another one and a half million on small contract farms. That just does give you a lot of flexibility if something goes wrong.
And it is more efficient to do it that way. It does cost less. But when you have an incident, it's very costly and very devastating at the farm level.
Greg Schoenfeld: I guess when that trend started of going bigger and bigger on complex, it's probably to some degree, that trend started before AI, right?
Jacques Klempf: Oh, yeah.
Greg Schoenfeld: But then it has continued since.
Jacques Klempf: It has.
I hate to name companies, but Iowa, Indiana, there's some companies in those states that have just these huge complexes where everything from the feed milling, the packaging, and the birds are all on one farm. When you get hit, you don't need to mill any feed and you're not going to be able to package anything. So you're just left with empty businesses and like I said, it's really devastating.
Dr. Kay Russo: Greg, it might be helpful for those that are more lay people to understand that when the virus hits a complex, whether the birds are infected or not, every bird on that premise has to be depopulated. You might just have one house that's affected, but everybody has to go.
The reason we do that is to reduce lateral spread. We've learned something from the outbreaks in 2015 where we couldn't depopulate fast enough and you just saw it burn like a wildfire in a given region. That is why we depopulate everything on that premises to reduce that likelihood of lateral spread between different poultry operations and unfortunately, on the dairy side.
That's why we've seen such considerable lateral spread off these farms is because we let it burn on the farms.
I'm not here advocating depopulating dairy. That ship has sailed. It sailed over a year ago.
But that's why we've seen the fires like we've seen in California and the losses because of just letting that virus go and letting it build in the environment.
Greg Schoenfeld: Yeah, 20,000 bird site, one bird gets hit, you lose 20,000. Four million bird site, one bird gets hit, you lose four million.
Jacques Klempf: Yeah.
Greg Schoenfeld: And then there's some advantages economically without this disease in consideration to having a four million bird site but producers have to weigh those risks basically.
Jacques, I guess there's got to be a part of you that says, "Hey, I should be adding birds." But at the same time, you're thinking, "Man, add birds. I add the risk of getting hit." How do you process that information?
Jacques Klempf: That's a great question.
Like I said, I think it's my understanding we've got about four million pullets a month that are being populated into these barns that are empty. But we also have a very old flock out there that should have been sent to the processor months ago. They're just stretching them as far as they can. So we're going to have a bit of a roller coaster ride, I think, till the end of the year and until the barns get repopulated.
I believe a vaccine is necessary. I don't know if we'll be able to get it done because I know the broiler industry, those barns, they get emptied every seven or eight weeks. So it's like, okay, they got one barn that got hit, they clean it all up and here comes another baby chicks for broilers. I just think they're going to really pitch a fit.
The Tysons of the world and the JBSs of the world, they're pretty powerful companies, and I just don't know that our ag industry is going to be able to get it done.
Greg Schoenfeld: Brian, when you hear about the older flocks being held onto longer, does that reflect what you see in the supply? Or is there a way of seeing that in the market? Or does that work itself out with time?
Brian Moscogiur...: Yeah. That impacts the productivity of the birds, the amount of eggs that the birds lay. You'll also see some heavier sizes available. So there was a period there where jumbo eggs were readily available and not even getting the same value as larger, extra large, just because the market was saturated of that size.
Typically, when you have an older bird, it's laying a larger egg. So as they stretch those birds out longer, egg quality starts to deteriorate. You get more checks and undergrads as those eggs are being graded, so you have more eggs potentially going into the breaker market.
The cost conversion on holding those layers out goes up. But your option is to remove those birds out and not only do you need time to repopulate, but you're also creating movement on that farm which in this environment is very risky.
Some farms have actually moved birds around into different facilities rather than doing even their normal rotations just to protect the birds that are laying on that site and limit the potential AI risk out there.
Greg Schoenfeld: Wow.
Jacques Klempf: Yeah.
Greg Schoenfeld: I need a minute to even process that because that-
Jacques Klempf: True.
Greg Schoenfeld: First of all, it's interesting about the egg quality and the more jumbo eggs, but then also interesting that, okay, not only are farms holding onto their flocks longer because we just need more production right now, but it also just increases the risk to be turning over your flocks like you normally would.
Brian Moscogiur...: It adds to the economic side of it as well. Everyone's looking at numbers in terms of layer numbers, but they don't understand that just because we have 280 million layers currently, they may not be as productive as the same 280 million layers that would have been scheduled normally and rotated normally and placed normally to optimize efficiencies.
Greg Schoenfeld: Wow.
Well, Jacques, it's a good thing. It was easy to be an egg farmer before because now-
Jacques Klempf: No. It was not easy.
Greg Schoenfeld: ... you can handle these kinds of challenges.
Jacques Klempf: No, no. There's nothing.
You wake up every day and you got... It is 24/7. The birds... You don't take a day off. I guess it was...
I exited the industry in 2016 right after the 2015 AI and I just didn't have a succession plan.
But no, there's nothing easy about egg farming. You can have all the systems in place and all the biosecurity in place and still something can happen.
We had a situation once where we have generators for each of our barns in case power goes out and we test them daily. One of our guys forgot to test one of our generators. It happened to be on a stormy night, power went out, and we had one barn that just the entire barn, because the generator didn't kick in it but luckily, it was a cage free barn. So there were less birds than a larger complex or barn that we would've had.
But no, there's nothing easy about egg farming. There's just so many things that can go wrong or not.
Greg Schoenfeld: Well... And certainly, yeah, in this environment, there's just that much more to manage.
Maybe one more question on the size of complex side because you went a little into how the broiler market is different, and yet these broiler companies are huge, but they're doing it all on smaller complexes. Is there something to the egg industry that makes it more difficult to manage with a similar supply chain that the broilers use?
Jacques Klempf: The cage systems that are out there today are much more advanced.
What the broiler industry has done, all their birds are on the floor with feeders and waterers, and... Ours live for almost two years if you're in a molt program. It requires different housing to really manage the flock.
Again... And we've become so efficient at using these cage systems and all the technology that helps us become more efficient. I don't see it going backwards to having 10,000 bird barns, I don't think... I think that ship has sailed.
Brian Moscogiur...: One thing to add there, it's not just on the producer side.
A lot of the articles that you're reading are about how the producers have gotten bigger and more centrally located, but the customers have gotten bigger. There's been consolidation at the retail level where 30, 40 years ago you're shipping to smaller, maybe family owned and operated stores, and now you're talking about shipping hundreds of loads to mega DCs. So it requires the producers to scale to match the needs of their customers.
Also, if you were to have smaller offline facilities and then centralized grading facilities, there's a lot more movement of those eggs that need to go into the grading facilities and then packaged for these major retail customers.
In Europe, the landscape is a little bit different where they have smaller producers and they're sending all of their eggs into packing stations, and then those packing stations service retailers.
In the United States, it's more fully integrated where you have larger producers that are servicing the largest customers in the world and they need to be fully optimized to reduce costs and also to service the demand changes.
Jacques mentioned that it's difficult to be an egg producer because the chickens never stop laying eggs. Regardless of the shift in demand with seasonality or promotion, you're going to continue to get those eggs rolling out. So when you start to expand that supply chain, now you have other facilities that you need to manage that inventory and bringing that inventory in or moving it out to another location.
Jacques Klempf: Yeah. It's very well said, Brian.
And to your point, the retailers, they bid out their eggs, and so the person that's the most efficient is likely going to have a better opportunity to pick up that business as opposed to a 10,000 bird flock and you got a two million bird complex, you can do it cheaper. Logistics are another thing, but at your dock. So yeah, Brian, that's a great point.
Greg Schoenfeld: Kay, what else can we do to fight this thing?
Dr. Kay Russo: Well, at this point, I think vaccines are the elephant in the room.
Obviously, trade is a primary barrier to utilizing vaccines. But there are other challenges that are inherent with vaccine use that we have to make darn sure if we are to roll them out, that we have a plan in place.
Secretary Rollins used Mexico as an example of vaccine failure. However, Mexico compared to the U.S. would be akin to apples to oranges. Mexico has endemic H5 and H7 that circulate through their commercial poultry flocks. That's not the case here. We "eradicate" it in our commercial poultry. And so ultimately, when Mexico started utilizing vaccines, their end goal for utilizing vaccines is different from ours. Theirs was primarily food security, keep the birds alive so that we continue to have eggs for our country.
Now, some of the other things that are different is that Mexico's surveillance is not as robust as the United States. There's no requirement necessarily for reporting and with that, there's a very little insight into what the current circulating strains of virus look like because what's important when you employ a vaccine is that it very closely matches that circulating strain because if it doesn't, you can drive mutation.
That was the concern that Secretary Rollins brought up and one that I think we are sensitive to should we employ it in the U.S. market.
Surveillance will be a huge piece of this.
If you look at France, which is more of an apples to apples comparison with the United States, they rolled out vaccine in 2023 in their commercial duck flocks and ultimately, they vaccinate approximately 60 million commercial ducks and duck breeders every year in France.
Now, half of the cost of their vaccine campaigns is surveillance, and that's to ensure that the vaccine continues to match the circulating strain and that they identify flocks that are affected with the virus, because it is important to still stamp that virus out if you find it in a vaccinated flock or an unvaccinated flock. They probably spend per campaign about a hundred million euros on vaccinating those 60 million ducks and 50 million euros is devoted to surveillance.
I'm not saying that employing vaccine would be cheap or easy in the United States. It probably would be on level with what we pay for current indemnity and the other surrounding activities with stamping the virus out.
But what we would gain from it is an improvement in food security in the United States as it relates to products like eggs, because the consumers are paying not only for this indemnity piece, but they're also paying at the grocery store when we see hikes and prices like we've realized within the last year.
But I wanted to point out those important differences between Mexico and France.
Greg Schoenfeld: I think that's extremely useful.
One question I have, you mentioned, a vaccinated flock, it gets hit with AI, they're stamping that out in France, is that-
Dr. Kay Russo: That's right.
Greg Schoenfeld: Okay.
Dr. Kay Russo: Yep, that's right.
It's a bit harder to detect it in a vaccinated flock, because they're not going to show the degree of mortality and so we've got to make darn sure that the surveillance that we employ is sensitive enough to detect the virus in those flocks.
France has found that passive surveillance, in the form of testing mortalities or dead birds every week, is the most sensitive and accurate way to detect the virus in a timeframe that is allowable for us to execute the measures we need to take in stamping that flock out.
Greg Schoenfeld: I thought vaccines help your body fight the disease when you get it. It doesn't necessarily keep you from getting the disease. Am I wrong about that?
Dr. Kay Russo: It's variable.
A vaccine that is "sterilizing," which the current administration is citing as the only vaccine that we will ever use for flu in poultry basically entirely prevents infection.
Now, realistically, there are very few, if any, sterilizing vaccines in any sort of species that we use today. Vaccines to some extent will prevent infection, but it's not going to be 100% of the time.
That's why it's important that we have robust biosecurity on top of it because ultimately, to consider biosecurity as being the only tool or vaccines as the only tool is disingenuous. The combination of both is going to be the one that gives us the most success in preventing infection.
And if they do get infected, that vaccine's going to reduce the viral load circulating in those houses, it's going to reduce the risk to humans that have to go into those houses to depopulate, and it's going to reduce the lateral spread off that farm, which is what we want to avoid is to prevent this virus from burning like that wildfire.
So even if it does fail, it still has additional benefits as I just listed.
Brian Moscogiur...: Say we were to vaccinate and they do find farms that test positive, how is the farm handled? Do they still have to depopulate the entire facility?
Dr. Kay Russo: Yes. Absolutely. Absolutely.
The best approach, even in countries that vaccinate is to depopulate those farms that come positive, because ultimately vaccines do provide pressure for viral change, so does natural immunity. That's why we get vaccinated every year for the flu because that virus changes around our immune pressure as well. And so the last thing we want to do is have that farm that's infected with a virus that got around the protection of that vaccine just leave it because ultimately, that's going to drive more rapid mutation.
Again, robust surveillance to find those flocks when they are positive and stamping out is the key to success with this.
Brian Moscogiur...: Now, would that be barn by barn or did they have to wipe out the entire complex?
Dr. Kay Russo: Ultimately, the vaccine itself will reduce the amount of viral load and the spread. And so it may be a consideration that we look at it with some pilot studies to see how likely it is with vaccine of reducing spread between barns.
But again, that's something that we probably need to do more work on before we say, "Oh, we can absolutely leave those barns sitting there that are unaffected." We got to be pretty damn careful with this. So at present, I would say we would do what we do now and stamp out the whole site. But again, we need to do some more research and see if there might be a way to conserve some of those birds on those sites.
Greg Schoenfeld: Do we have to be on the same page globally on this thing? Does it take just one country? I guess they could put the vaccine in place, not stamp it out, cause mutations there. Maybe that's a bad way to word it but...
Dr. Kay Russo: Well, that's what we're seeing in Mexico.
But their goals are different from ours. Their goals are food security within their country. Our goal is to not have the virus endemic in our poultry flocks.
But again, you look at China, for instance, they had a low path H7 that originated in about the 2013 timeframe. Between 2013 and 2017, that low path evolved into a high path H7. You had 1500 human cases in association with affected poultry. Over 600 deaths.
And so they went in 2017 and started to vaccinate. The waves of human cases varied between a 100 to 700 each wave. After vaccinating, they reduced the cases to four people. Those four people were in more rural areas that weren't necessarily employing vaccine.
It depends on the country what the goal is. In that case, part of the goal was for human safety. Again, in the United States, our goal is to prevent infections in poultry flocks when coupled with robust biosecurity and we'll still stamp it out because we don't want it circulating, we don't want to drive mutation. But across the world, that goal is very different.
Jacques Klempf: We can't stop AI. We don't have anything that is foolproof.
If this year doesn't really show Congress and our representatives that we need this for food security and just to protect the livelihoods of all these egg producers, I don't know what will, because it's the worst ever I believe.
And it's lasted the longest. This has been going on for over a year and a half, two years. We're getting these outbreaks. It used to be in the middle of the summer, July, August, all of a sudden it stops. But no, this has been just an unbelievable run with AI.
I would absolutely endorse vaccines if they were available. I know they're not going to be 100% effective, but just as an insurance policy, I would do it to every one of my pullet farms. Every one.
Greg Schoenfeld: Jacques, you've served in leadership organizations within the industry. What can the industry do if everyone believes, "Hey, this is the answer," but maybe higher ups in government are saying no, at least so far, what do we do?
Jacques Klempf: Well, I think UEP, which pretty much represents almost every egg producer in the country, they have a lobbyist arm that basically goes and tries to make something like this happen. Probably starts there.
USDA, maybe they would endorse a vaccine for the egg industry and maybe not.
The other feathers, I just know we're going to have some resistance from the broiler folks, from the turkey folks, and we will get it from dairy and beef and swine. We always have, whenever we've tried to get something done through Congress.
Dr. Kay Russo: I will say on the dairy side, I've spoken with a number of producers, different vets, many of them would utilize a vaccine if it came available.
Greg Schoenfeld: You're saying within the dairy industry they would?
Dr. Kay Russo: Yeah. Yeah. Because they incurred significant losses this year too. Their animals didn't die to the degree obviously it affects poultry, but significant impacts to milk production. Those animals that were clinical were six times more likely to die, three and a half times more likely to be removed from the herd. Those animals that were clinical didn't go back to normal milk production. It was muted. It's more of a silent bleed from those infections, but it's stealing productivity nonetheless.
Greg Schoenfeld: The dairy industry, do they also have the same trade implications as egg and poultry?
Dr. Kay Russo: I think that's difficult to say because there's no precedent set for this in any other country other than our own.
If we look at some of the testing, for instance, that's been done with shelf dairy samples, one in five dairy samples on the shelf at one point during testing were positive for the RNA associated with H5N1. Luckily, pasteurization has been effective in killing the virus so the food safety implications aren't there, but it just tells you how ubiquitous this virus is.
And so in my mind, if that didn't affect trade, I don't know that a vaccine's necessarily going to affect trade. But we don't export any raw products. Maybe some, but very few raw products on the dairy side so that's another consideration.
We do export considerable raw poultry products. And so with that, there's an inherent risk potentially of exporting a virus if one exists there.
Greg Schoenfeld: But we do use some vaccines, right?
Dr. Kay Russo: We used a hell of a lot of vaccines in dairy and poultry. You look at the layer of vaccine protocols, they're robust.
When we look at barriers to vaccinating, one of them is, "Hey, we can't use modified live H5 or H7 vaccines," but we're already handling these pullets a number of times before point of lay. And so if we were to administer, say, an HVT vectored vaccine at the hatchery and then follow up with a killed vaccine sometime before point of lay, we could integrate that.
And so I would say to the administration that's using that as another excuse is let us worry about that. We can figure it out because we're handling these birds already as it is.
Jacques Klempf: I was going to ask, when the pullet is in the pullet house, can you say the killed vaccine, could it be administered through misting or water, it has to be handled?
Dr. Kay Russo: When you go through probably after 10 weeks, 12 weeks, and you're already administering other killed vaccines by injection, you're already handling those birds, that's when I'd slip it in.
You could get several months of immunity based on that protocol. An HVT, for instance, at the hatchery and then say the Zoetis version that they've just approved or conditionally licensed at some point when you're handling them already.
Now the other thing is we don't have to import these vaccines. You have manufacturing of H5 vaccines already going on in the Midwestern United States. We just export them to other countries to use them. That's not an excuse either. They're there. We could pull them off the shelf tomorrow and use them and they're being used effectively by other countries.
And conditionally licensed. Ceva, I believe has one. Behringer has one, and now you've got the Zoetis killed vaccine as well. So again, that shouldn't be an excuse.
Greg Schoenfeld: It sounds like this road is feasible. It's just got to get the right people on the same page and then we can move forward.
Dr. Kay Russo: Yeah. I speak but there are army of folks behind me that are ready to employ this and support it. There's virologists, there's vets, there's producers. We can do it. So let's quit making excuses.
Greg Schoenfeld: I guess hearing you talk it just sounds so clear. It sounds like everyone who is responsible for producing eggs, or maybe not everyone, but a big chunk of people, this is the direction that we want to go in, but there's politics and just whatever hurdles that stand in the way and that's unfortunate and hopefully, we can overcome that.
Dr. Kay Russo: I've said it a few times over the last year. Do not let politics get in the way of public health, of animal health, of science because if you put those two things on opposite sides in a tug of war, we're going to lose. The people in the middle are going to lose, the consumer's going to lose, the producer's going to lose. It's a losing situation.
Greg Schoenfeld: I'd like to jump over to one last question, which is just given all the uncertainty out there, any takes on what the next year looks like? Bold prediction for 2025 and maybe, Kay, I'll start with you.
Dr. Kay Russo: I think it's dependent ultimately on which way we go with this.
If we continue to let it go as it does, we may luck out in the summer months and it may slow down to some extent but hey, guys, we've got multiple new syncs for this virus. It's not just migratory waterfowl anymore, it's cattle. It's all sorts of wild mammalian species as humans. And so if we continue to let this go, I think we're playing with fire.
Hopefully, we do get a reprieve over the summer months but I wouldn't use that to put our heads back in the sand and just hope that it continues to stay away. We use that time to mobilize and figure out what our next strategy is when it starts to hit again. And I do believe firmly that it's going to have to involve a strategic targeted vaccine plan. So I would leave you with that.
Greg Schoenfeld: Thank you.
Jacques, what do you think?
Jacques Klempf: I 100% agree with what Kay is saying.
It's unknown. There's no way you can predict what's going to happen the rest of this year or in 2026, but I would say if we do nothing, we're likely going to have similar things occur and to the degree who can say, but to me right now, the only answer is to vaccinate.
I can tell you that most of the egg producers I've spoken to would totally embrace a vaccination program that was spearheaded by the USDA or attached to the Farm Bill or however we get it done. Just let's get it done so we don't have another 2024, '25.
Greg Schoenfeld: Jacques, I'm going to put you on the spot. Will that happen in 2025? Will we see a vaccine?
Jacques Klempf: I hope so.
I really hope so, because the devastation at the farm level is not being spoken about in the press. The only thing everybody's talking about is, "Oh, the high price of eggs, "Oh, the high price of eggs." But the domino effect is so horrible for these generational egg farms, all the employees that are affected by AI.
I just don't know why they wouldn't get something in the works because there's a lot of egg producers, these generational egg farms, they may sell. They may say, "To hell with this, I'm not going to do this anymore and live through a year like I just lived through." So I hope so.
I don't know that we're going to be able to overcome the broiler folks. I know that they're not for it. They're against it. But again, we're not talking about vaccinating boilers, we're talking about layers. And if they would just let us run our business, we'd all be better off.
Greg Schoenfeld: Jacques, I think you need to come back and go on a crusade.
Jacques Klempf: Well, it's an uphill battle.
Greg Schoenfeld: Yeah.
Jacques Klempf: It's going to have to come from a much higher power, I believe. I don't know if the Trump administration would allow. I just don't know. I don't know.
But I totally endorse and I believe every egg producer would endorse a vaccination program.
Greg Schoenfeld: Brian, with all this uncertainty, so we saw the big spike in egg prices for a long time here and a recent pullback, how do we even start to think about 2025?
Brian Moscogiur...: Continued volatility.
I think going back to what we were just discussing with vaccination, I think we're going to need to see another major impact on the supply chain prices potentially spiking again, the consumer getting upset, the administration taking it on the chin and changing their stance here.
But the broiler industry is extremely strong. About one third of all of their production is the benchmark that I've heard that they rely on export markets for.
The trade wars continue to go on and there's already so much headwinds in international markets to renegotiate. I think it was like a 100 or 150 different trade deals in order to keep those markets alive is probably too much, especially given all that's out there on the table right now as it is.
But unfortunately, I think the administration's going to need to see that the virus is still around. More farms, I expect, will be impacted within the next six months, if not sooner with the spring migratory period.
They're out there knocking on the doors in Europe and other parts of the world clamoring to send eggs into the United States. Those supply chains are not very robust.
I saw Denmark was one of the countries that they were asking to ship eggs from. Denmark I think has about four million laying hens. We're down 50 million laying hens since the middle of October.
There's no big glut of eggs that can come in and supply the U.S. market unless we're going to open up trade doors with China or India or something like that. In which case, you have different types of certifications and inspections that need to go on.
Dr. Kay Russo: And they vaccinate.
Brian Moscogiur...: There you go.
Obviously, Salmonella, other types of human health issues could potentially arise if we were to ever bring in eggs that don't need to be broken and pasteurized, which imported eggs must be at this point.
Opening up the supply chain from international markets, it can help, but I don't think it's an end all be all solution. So we need to look internally and in the meantime, I just expect markets to be very volatile. Generally higher. The repopulation is going to take some time. Demand could be impacted obviously because of pricing. We're seeing that right now.
We're in this weird period where Easter's late, there's no real demand push around eggs currently, even though we have, say, 280 million birds, it feels like we have the demand for 270 million birds and you can't turn those birds off. The production keeps coming out.
The market has fallen about $4 a dozen in the last few weeks from the record highs, and now retailers are going to probably have to pass that cost along. You hear so much about producers and the pricing in which they're getting in the marketplace. Now, those markets have come down drastically. You would think now the retailers have to be very proactive in terms of passing those lower costs along to the consumer.
Consumers have hoarded eggs here, just like during the COVID period with all the news around shortages and high prices incoming. Their stocks are probably being depleted at this point and now we're going into what is traditionally the second biggest demand season of the year, and the consumer is going to potentially see some of the lowest prices they've seen so far in 2025.
I expect demand to recover and us to realize, "Oh, wait, we don't have enough production again to service normal demand and potentially see a rebound in this market," which can start this cycle again, plus the AI risks that are out there.
It's volatility, uncertainty, and a lot of risk.
Jacques Klempf: Brian, to your point on the retail side, some major retailers that are market based, Urner Barry, they have called their producers in and told them, I've heard this from three different people and said, "I don't care where the Urner Barry market goes. This is all I'm going to pay you."
Some retailers where their prices should be north of $9 have been in the $6 range. It makes me wonder what those relationships are going to look like when this market does settle down.
Brian Moscogiur...: That's also why there are some retailers in this country that still don't have eggs on their shelves.
Jacques Klempf: True.
Brian Moscogiur...: Unfortunately, the supply chain is the supply chain, and the markets do a pretty good job of capturing the value of the eggs in the marketplace. And there are some chains that are well stocked and then there's others. We continue to get those pictures that my friends are sending me. Even they go to a store and there's no eggs on their shelves.
Jacques Klempf: That's because they refuse to pay the market price.
Greg Schoenfeld: If we talk about the boiler industry and carrying a lot of weight, is there anyone in that world that would be willing to step up on behalf of the egg industry?
Jacques Klempf: The egg industry is so much smaller than the broiler industry and you've got, I don't know, 50 generational egg farms, maybe 40 today or even less. That's why UEP would seem to be the right vehicle to address this with USDA or the Trump administration and however it gets done, because the voices aren't big enough. That's why we need one voice to represent I think everybody to try and get something done.
Brian Moscogiur...: I think the retailers support vaccination as much as anyone. They're looking to have these markets stabilized and reduce risk and get into normal patterns again. So I would think that the major corporate chains are in support of vaccination and whatever we can do to get markets right again.
Jacques Klempf: Yeah. The food service operators because you hear waffle houses 50 cents more per egg. So I think between food service and retail, yeah, that's a great point that they would all be in support of it.
Dr. Kay Russo: But if we look at also some of the impacts on communities, whether it's real communities that rely on the employment by these farms that get hit, job loss associated with production impacts at slaughterhouses, turkey slaughterhouses is another example, and then also impacts on local food banks that rely on eggs as a cheap protein source to feed those that are less fortunate. It's very easy to focus on things from a dollars and cents point and be very myopic with it, but this has a ballooning impact that we're not considering that impacts American people.
At the end of the day, if we're compromising food security, even if it's just with eggs domestically, are we making that choice versus maintaining profits from export? What does that look like?
To me, I think it's important that we consider this issue and the implications on the American public as well.
Greg Schoenfeld: I think that's a great spot to end it and really a great message to put out there.
Thank you all so much.
Dr. Kay Russo: I didn't even swear once.
Brian Moscogiur...: Yeah, we played nice. We played nice.
Greg Schoenfeld: I almost brought out your quote of, "We have a fucking mess on our hands," but I decided, "Ah, maybe that'll derail the whole conversation." So I'll keep it. If Kay can keep a lid on it, so can I. Right?
Dr. Kay Russo: It's hard. It's hard for me to.
Greg Schoenfeld: No. Thank you all so much. And I think it's a unique conversation to be had here among three viewpoints that really can help people.
Jacques Klempf: Okay.
Dr. Kay Russo: Let's hope.
Greg Schoenfeld: If there's one thing that's clear, it's that volatility isn't going anywhere. Bird flu isn't slowing down. The market's unpredictable and farmers are stuck navigating a system that feels like it's working against them.
We heard from Brian about how supply chain disruptions are stretching far beyond what most people realize.
Kay laid out why vaccination could be the game changer if the industry can get past the politics.
And Jacques gave us the hard truth. For farmers, every day is a gamble and without real solutions, more producers could walk away for good.
So what happens next? Will the U.S. take steps towards the vaccine? Will we see another market spike before the year is out?
One thing's for sure. We'll be keeping a close eye on it.
Thanks for tuning in to Eggheads. If you found this conversation valuable, share it, rate it, and let's keep the conversation going.
A huge thanks to Brian Moscogiuri, Dr. Kay Russo, and Jacques Klempf for sharing their insights. We'll be checking back in with them to see how things unfold. So stay tuned.
Make sure you follow Eggheads on Spotify or Apple Podcasts and connect with us on Instagram and LinkedIn too. If you want to be a guest or have topic ideas, please send us a message.
Until next time, I'm Greg Schoenfeld.