Subscribe
Share
Share
Embed
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.
Glenn Hickman:
When you keep losing another farm, another farm, another farm on a fairly regular basis, the plan you came up with yesterday doesn't work tomorrow.
Greg Schonefeld:
I'm Greg Schonefeld, and this is Eggheads. Egg producers spend years scaling up their operations. They invest millions into making sure their animals are productive and healthy, that their product is safe, and that their farms run efficiently. And then in the span of a few days, that can all go out the window. Nobody knows that experience better than Glenn Hickman, the president and CEO of Hickman's Family Farms, the largest egg producer in Arizona and one of the largest in the Southwestern United States. But like many producers, Hickman's had humble beginnings.
Glenn Hickman:
We started in 1944. My grandparents on my dad's side came out here from Kansas, because he was working in a mine and started to have miners' lung. So they worked on the dams that now irrigate and provide water to all of Arizona, but those were built in the late '30s and through the '40s.
Greg Schonefeld:
Wherever Glenn's grandparents lived, usually in work camps at the base of whichever dam his grandfather worked on, his grandmother would keep a few chickens.
Glenn Hickman:
They settled in Glendale in 1944, and my grandmother started accumulating more chickens and selling eggs to neighbors and that kind of thing off her back porch, and it was really that kind of a small subsistence farm up until 1957. And then my dad married my mom, and my grandmother was up to 500 chickens at that point. My dad bought my mom 500 baby chicks, and the two women started off in business together. So it was actually my mom that really commercialized our business. She really started hitting the streets and started selling to restaurants and small grocery stores and that kind of thing.
Greg Schonefeld:
In the decades that followed, the Hickmans kept acquiring new buildings and more chickens, growing steadily from a subsistence farm into the massive operation that it is today.
Glenn Hickman:
So we had about 6 million birds plus pullets.
Greg Schonefeld:
Being situated in the Sonoran Desert, outside the normal range of migratory waterfowl, and with strict biosecurity measures in place, you'd think the Hickman farm would be safe from threats like avian influenza. But that was unfortunately not the case.
Glenn Hickman:
We were hit by bird flu at our Maricopa farm, which is about 80 miles southeast of here. And those birds, we depopulated in mid-November. We got the all clear. We started repopulating that farm in early January. And in mid-January, that farm got infected again. So we took the farm down again and did the same repop, tested wildlife in the area. We knew we still had active virus load. So we didn't take any birds down there till early May.
And thankfully, we did, because those birds that are down in Maricopa, about 340,000, are the only birds we have left in the system. So everything on the west side, three-layer farms and 11 pull-up barns, are now empty. The birds have been down for about a week, and every bird has been removed from the facility as of today.
Greg Schonefeld:
Wow. So we're talking three separate farms, 6 million birds, and it's taken a lot of time here to build up what you've built, and it all kind of gets hit overnight.
Glenn Hickman:
Yeah. 81 years to build it and three weeks to basically shut it down. We literally have no chickens. That means no processing plants, no barns. That's where we're at today.
Greg Schonefeld:
Today, Glenn Hickman is giving us a glimpse inside his farm as they deal with the fallout of an HPAI outbreak. We're telling a story not just to demonstrate how devastating these outbreaks can be, but to highlight the resilience of the producers working to get their operations back up and running again, and the challenges of planning for the future with a disease that seems capable of striking any farm anywhere at any time.
Glenn Hickman:
I think everybody really increased their biosecurity operations after the 2015 outbreak, and I think that we were all probably slipping a little bit. It didn't have quite the rigor and discipline that we had back in 2015, 2016, and I think that outbreak in February '22 got all of our attention. We have lasers. We have air cannons. We try to monitor which way the wind is blowing for certain outdoor activities.
We shower everybody in. We are literally washing the paint off vehicles as they come in and out of the farms. We restrict access from our internal employees that they can't visit multiple farms in a day. So we've done everything we possibly could other than restrict airflow to the buildings, and that's just not a viable option right now.
Greg Schonefeld:
Mm-hmm. In these more recent outbreaks on the three separate farms, how'd you first discover HPAI was present on these farms?
Glenn Hickman:
Well, it happened on our big cage-free farm. I think it's common to have little spikes in mortality on cage-free, because you don't know if you got a piling effort or something like that. So the first uptick didn't concern us much, and it wasn't very many birds. But the next day, we had a significant jump in mortality. We took samples that day, and they came back positive the next day.
The positive samples happened on May 16th, and we started losing, it seems like, another farm about every five or six days, another pull-up barn, those kind of things. So it's just been a slow-motion train wreck. And when our first farm went down, it's about 15 miles from the other one. So we shut down all kinds of transportation, everything between the farms, and it was probably too late. We probably had the virus at our Tonopah farm before we knew it, and we probably carried it to one of the other farms. And from there, it just mushroomed.
So then the last farm went down, and now we have one farm down in Maricopa. It's our smallest farm, and we are using that cooler to bring in eggs and redistribute to our customers. So we're kind of stitching together a plan, but when you keep losing another farm, another farm, another farm on a fairly regular basis, the plan you came up with yesterday doesn't work tomorrow.
So getting the barns empty, and now starting the cleaning and disinfection. And all told, between pullets and layers, there's 47 barns. So that task by itself is pretty immense. So I don't think we've had a lot of time for self-reflection, and there certainly hasn't been any pity parties around here. I think farmers just bow their backs and go to work.
Greg Schonefeld:
And then I guess you also have to look to the future too. I understand it takes 20 months to get things back online.
Glenn Hickman:
Greg, I think probably most farms operate like we do. Your replacement facilities and those programs are geared on a 20-month replacement cycle. So we've got birds coming in every month. The baby chicks we had coming in in June, we were able to position them at one of our partners' facilities out of state. So he's going to grow them to 16 weeks for us.
The birds or baby chicks we have coming in in July are kind of a quandary force. We know our virus typed exactly to the one dairy that's infected in the state. It's about four miles as the crow flies from us. They have an active outbreak going on. There's no clinical signs whatsoever. The herd is producing well, but they keep coming up with positives in their milk tank.
We are really struggling to understand, if we bring in a half a million dollars worth of baby chicks in July, what will be different about that situation than what we just went through? And the USDA has failed to come up with a comprehensive program to deal with avian influenza. Now, it's very well-seated in the dairy industry. We know that it's in all different types of poultries. It's in ducks. It's in turkeys. It's in broiler chickens. It's in laying hens.
We don't see a lot of leadership there from the USDA. They seem to be taking a very reactive approach and hoping that beyond hope, like in 2015, where it just goes away, then their stamp-out program worked. There's no stamping out. We've already stamped out half the industry. I'm not sure how we're going to stamp out the rest of it. I mean, that doesn't make any sense whatsoever. So we have other methods to contain this disease, and we really need to start pursuing those.
Greg Schonefeld:
When Glenn says other methods to control this disease, he's really talking about vaccines. And as someone who's had to basically shut down a 6 million bird family farm that's been in operation for over 80 years, Glenn's passion about this is palpable.
Glenn Hickman:
If there's another practical option, we haven't heard it. And so, we know that vaccines are available. We know that they have been approved for manufacture or licensed. We know that Europe is vaccinating some of their flocks and getting some protection. I don't think vaccine alone means that we can stop washing trucks or practicing good biosecurity. That's going to be something that's going to be required in our industry from now on.
But I think that vaccine does give you another layer of protection. And to not be able to use it, to not be able to vaccinate dairy herds, the bird that is eating out of a cattle manger is the same bird that's flying over our chicken house. So I don't know why we're going to try to take this approach that there's a different reaction to every single different species.
I'm not a veterinarian. I'm not a virologist, none of those things, but the challenge to human health is the one we really have to be concerned about. For months on my email signature was a picture of a chicken and a surgical mask, and the statement under it is, "If we don't vaccinate the animals, we're going to have to vaccinate the people."
With the vaccine, as I understand it, that is licensed, it's a killed virus. It can be mixed with other vaccines that we're already giving. So it doesn't take an additional handling of the bird. It doesn't take an additional poke with a needle. It is simply purchasing the vaccine and adding it to our portfolio that we do right now.
There's different people that have different reasons to want to go forward. I think one of the economic reasons that is irrefutable, let's say the vaccine costs 10 cents a bird. That's an expensive vaccine, and we don't have very many that cost that. But if it costs 10 cents a bird to vaccinate the U.S. layer flock would be a whopping $30 million a year, and that's a cost that is borne by the farmers since the government doesn't subsidize any of our operations.
So for $30 million a year, in 20 months, we could have the entire U.S. laying flock vaccinated. To contrast that, since this outbreak in February '22, the federal government, state governments, either through indemnity or other activities where they've been on our farms and everything else, has spent literally billions of dollars addressing these outbreaks.
The American public in 2024 spent an extra $11 billion on eggs and poultry that were due to the elevated prices brought onto this. So through our taxes, we're paying for responses to AI, and then we pay it again at the grocery store. And so, for want of not spending $30 million, we are spending billions.
Greg Schonefeld:
So according to Glenn, HPAI vaccines are already in use in other countries. They can be easily integrated into existing vaccine regimens, and doing so might actually save the government billions of dollars. Seems like a no-brainer to me, but I wanted Glenn's opinion on why there seems to be very little movement on this.
Glenn Hickman:
I think the bureaucracy, the gears of the political machines, all of those kinds of things conspire to maintain the status quo. And I think that we have in our industry, our related industry, our vendors have come up with these tools. And for some reason, it gets stuck in D.C. It's as simple as President Trump instructing Brooke Rollins to release the vaccine. It's that simple.
And we don't need more study. We don't need more programs. We don't need any of that. As egg producers, let us buy the vaccine and get going. Kay Russo was on one of your podcasts, a veterinarian that's really well-acquainted with this, and she said it best. She said that her education as a veterinarian was all about animal health and human health and did not include any discussion about trade. And when we get down to it, this is all about trade. This is not about the animal health or anything close to that. It's about trade.
So the broiler industry has a different view of vaccinations. They have a very short-life bird. They've been almost untouched by this virus. And so, they don't really see the need to have it, and they have export markets to protect. The egg industry has no export market to protect. Our hygiene standards and our husbandry standards are so high that we can't be competitive in most of the world. So we don't have anything to protect.
In this country, we eat a lot of white chicken meat, but that chicken is still designed to produce dark meat as well, and that dark meat is always looking for a home. So those leg quarters are going to Eastern Europe or points beyond, and they need to maintain that market. If they didn't have that market, the price of chickens would be cheaper in the United States, and that industry wants to remain profitable. They're not looking for ways to reduce their margins and reduce their prices.
Greg Schonefeld:
To get this vaccine that the egg industry needs, it could be Donald Trump saying, "Hey, Secretary Rollins, put this vaccine in place." But on the other side of that is the broiler industry interests. Am I understanding that basically correctly?
Glenn Hickman:
Yeah. But Greg, again, my scientific depth can't go toe-to-toe with someone that's went through 16 years of school. But as I understand it, this is a killed vaccine, which means literally I could vaccinate one chicken in a cage and not vaccinate her sister in the same cage, and the unvaccinated chicken will not get exposed to the virus.
I don't think it can be any safer. We're not talking about taking live vaccine and spraying it over farms with drones. That's not what we're talking about doing. This is a killed vaccine. And what's really inconsistent, Greg, is when the egg prices got really high. In our country, we dropped some of those phytosanitary requirements. We buy eggs now from countries that don't refrigerate them as a matter of course.
We buy eggs from Mexico where they do vaccinate their chickens for avian influenza. And so, we're bringing those eggs in, yet we don't have that same tool in our toolbox. So there's a lot of inconsistencies. There's a lot of, I think, sacred cows out there. And while we're dillydallying around trying to figure out how to make everybody happy, we're going to have continued problems in the layer industry, the turkey industry, the duck industry. We seem to be the ones that are bearing the brunt of this disease.
Greg Schonefeld:
Yeah. If I understand correctly, part of what you're saying there is, because that vaccine could be isolated, there should be a world we could live in where the egg industry receives the vaccination, the broiler industry does not, and exports are maintained. So basically, everybody would win under that scenario. Do you kind of see a road map where we can get there? Do you have an idea of where this needs to start?
Glenn Hickman:
I do think we need to speak out. Our industry leadership, our organizations have done a great job of carrying this message to Washington, D.C., of working with officials. But I think that they're trying to play within the rules that are set for them, and I don't have to be confined to those rules. So we've had lots of egg producers that have been decimated by this, and we're just doing the same thing over and over again, expecting a different response.
And I don't think that that is good business. I don't think that we run our businesses that way, and I think we have to do something different. So I am stepping up my vocalization for vaccines and trying to get as many people on board as possible. If we're going to continue to have a economical source of protein from laying hens, we're going to need to have vaccine.
If we don't do something with vaccine, we're going to continue to have the disrupted supply and the extreme pricing swings. And because of the extreme layer losses that we had around the first of the year, there were bare shelves and there were $10 eggs out there, and I think we've really lost some of that trust with the consumer that we will have to rebuild, and one of the ways to rebuild it is to maintain a steady, affordable supply.
Greg Schonefeld:
Which goes to the vaccine.
Glenn Hickman:
The vaccine, Greg, is the one item in our toolbox that we know about that we're being prevented from use. Whenever we have these kind of discussions, we have well-meaning folks that make suggestions about how we can ionize the water, deionize the water, filter the air, UV-treat the air, and those kind of things. But Greg, you're in this business too. You know how much ventilation we use on these big barns.
And so, a typical barn that we own is moving a million cubic feet per minute. And when you think about that, that's hard to visualize. But I did the little bit of research, and that's like filling three Goodyear Blimps per minute, every single minute, and you got 14 barns on a single farm. You can just imagine. There's not enough filter media in the world to handle that kind of airflow.
Greg Schonefeld:
Sure. Well, and you touched on this some, but how would you rate the egg industry's response to this crisis now going back to 2022?
Glenn Hickman:
Well, Greg, I think as operators, we've done a phenomenal job of cooperating with the government. We get one sick chicken, we level the farm. That's what we've been doing now for three-and-a-half years, and I'm just telling you, it's not working. The premise of stamping out this disease is flawed. We could sterilize every pigeon and every sparrow in the 48 states, and we would still be subject to waterfowl bringing it back the next year. We may never eradicate it at this point, but control is at least something we can work towards.
Greg Schonefeld:
You said before we've kind of played within the rules in the egg industry, and I guess there's something that needs to change there.
Glenn Hickman:
Well, the fact that we've had this virus from 2015 to 2025 and we have the exact same response to it would suggest that our messages aren't getting through. And so, I just think we need a different message. We need to use every type of avenue to get to our public health officials to get this over the finish line. As a private family, we don't have unlimited capital. And so, we have to make the decision, are we going to risk $500,000 every single month to buy new stock when we can't even figure out what we could have done differently to avoid this disaster?
And we're not having any guidance from any of our health officials that said, "We made a mistake, and here's a pathway that you need to shut off, and then you can feel confident that you're going to be able to restock your farms." We don't have that. We've been washing trucks for 20 years, and a lot of the people that work with the pullets and the chickens are inmates from the Department of Correction.
We know they go home every night, and they don't have a pet chicken in their backyard. So that's a phenomenal control that we have that is not available to others. And so, those are just some of the things that when you do a little bit of soul-searching, what are we going to do different when these baby chicks arrive in July? It causes a little pause.
Greg Schonefeld:
Yeah. And you said, "Ultimately, we need to reach the health officials." And who carries that torch? How does that happen?
Glenn Hickman:
Well, I've certainly engaged our congressional delegation. I've been in contact with anyone that'll listen to me at the Department of Agriculture. I am trying to ask other egg farmers to engage with their officials. I know that our organizations are spending a lot of time in Washington, D.C. And so, I'm just hoping the pressure that we put out there and the evidence that we display are having an effect. I mean, the reality of it is we are making sure that people in Eastern Europe can buy cheap leg quarters at the expense of having economical eggs on the shelves of our local grocers. That needs to be the message.
Greg Schonefeld:
How do you make decisions as an egg producer in this world? Like you said, you've got to decide whether you're going to invest in more livestock. And if you don't have a way to control a different outcome, how do you even approach that? So I guess I understand it's going to take 20 months to get things back online, and then after that, how are you doing something different than before?
Glenn Hickman:
Yeah. And there's no guarantee that we'll get through the 20 months without an outbreak. We had a farm in Maricopa that we literally blew an entire semi-load of formaldehyde within the confines of that barn. We swabbed, we heated the barns up. We did everything we could think of doing, and they were as sterile as probably any barn anywhere. And we moved the birds in, and two weeks later, they were sick again. And so, with the pressure that we have in the environment now, because this virus has gone endemic, I'm not sure that there is a playbook that's viable.
Greg Schonefeld:
Do you think there'll be a moment where you just kind of get hit, like, "Oh, man. I don't know," three months from now, six months from now? Maybe you're carrying a weight that you haven't quite reflected on?
Glenn Hickman:
Greg, I don't think farmers are built that way. I mean, I think you could get your elevator torn down in a tornado in the middle of Oklahoma. And as soon as the demolition is done, you're going to rebuild that damn elevator, and that's just the resiliency of the American farmer. It's something that's in our DNA. As a businessperson, when you're allocating capital, it does cause you pause.
I think the American farmer and American businessman, I think we skew towards the fight versus the flight, and we're going to kind of just lean into the problem. And if we're pushing the stone uphill, well, that's just our lot in life. We're going to push that stone uphill. So I don't see that we're going to bail and such, but I also think that it's irresponsible to not adequately identify all the risks.
Greg Schonefeld:
It sounds like you've taken a tremendous amount of precautions every step of the way. Is there anything, if you look back, you would do differently?
Glenn Hickman:
Oh, yeah. I think that we would try to locate our farms farther apart. So what we've built out here is very efficient until you get hit by a disease, and then you kind of have that moment that you say, "Well, that wasn't maybe the best idea." But I think that's one of the things that we would do differently. We probably were very naive, Greg, when we thought that we're in the middle of the Sonoran Desert.
We don't have to worry too much about bird flu. We're not in a flyway. If you Google Sonoran Desert duck, you won't have a picture of it. And so, we felt like our exposure to waterfowl was pretty nominal. But just since this last thing has happened, we've been catching pigeons, sparrows, vermin, and they all have bird flu.
Greg Schonefeld:
Here, Glenn is touching on a really important point that, up until now, efficiency has really been the name of the game in egg production. Situating farms close together so that there's easy access to the feed mill and egg processing facilities, it makes a ton of sense from an economic standpoint, but AI has really changed the calculus there. And now that some of that efficiency might need to be sacrificed in the name of greater biosecurity, those increased costs are probably going to be passed on to retailers and consumers.
Glenn Hickman:
In business and in commerce, you're not ever rewarded for being inefficient, and you try to be a low-cost producer, because at the end of the day, we are selling a commodity. Everybody in our industry is a good producer. When I'm at a restaurant, I can't tell if it's my eggs or somebody else's. They're both delicious, and we might have not been able to tell our story well enough to say, "Hey," to the grocery industry, "we need to start building redundancy, and we need to build some additional protections into our supply lines."
And the only way for us to be able to afford to do that is in the eventual price of eggs. I think that with the recent high prices that grocers paid for eggs, they might be willing to listen to that argument a little bit more than they would have 10 years ago. And so, I think that as we retire barns, as we expand, and everything in between, I think that has to be taken into consideration.
I think we've got to look at functional biosecurity as important as whether or not you buy a 700-case-an-hour machine and stack 3 million birds behind it. That's very efficient, but that might not be where we need to go in the future. If we don't do anything different, we almost deserve what's going to happen to us. And so, I think that's one of the things that we'll be talking about as we spool our facilities back up.
Greg Schonefeld:
Yeah. For that to happen, does the retailer just need to buy that, or does that need to get to the consumer?
Glenn Hickman:
I understand that eggs have one of the highest degrees of inelasticity when it comes to price and demand. I think people buy the same amount of eggs at retail, whether they're $2 a dozen or $4 a dozen or $5 a dozen. Our product is in something like 97% of all refrigerators. Our egg consumption on a per capita basis has been going up.
So we have a great product. We have folks that will pick it up and put it in their basket, I think, at 8, 9, $10. I think we lost some demand, and the timing is such that it's summer now. So family routines are different. We're not getting up and going to school. We have the challenge of maybe heating up the house when we are cooking eggs in the morning and some of those things. So we've lost some demand, and we'll play hell getting it back. I don't think that we're going to have to wait to get the last cage in this country refilled before we have softer, negative pricing again.
Greg Schonefeld:
That whole line of questions kind of hits on a curiosity I've had for a while. Just thinking as a business person, I've always kind of reflected like, "Man, I have a hard time imagining running an egg operation where it's very difficult to control your pricing." You're making such long-term investments on the cost side without promises necessarily on the pricing or the revenue side, and it just strikes me as a difficult business to operate, especially in these times.
Glenn Hickman:
Greg, we are inherent gamblers. We build 30-year facilities based on a two-year commitment from a grocer.
Greg Schonefeld:
Yeah. That'll be the title of the episode now, Inherent Gamblers.
Glenn Hickman:
Well, you might say degenerate gamblers, and that would probably sum us up a little bit better.
Greg Schonefeld:
Degenerate gamblers might be a little harsh, but there's a lot of truth in what Glenn is saying. Farmers, more than most, are conditioned to tolerate risk, but even farmers have their limit. And expecting them to repopulate massive egg operations when they might have to do the exact same thing in a few months' time, that might be more than even the hardiest producers can tolerate.
And as these producers do their part in stepping up biosecurity and depopulating farms whenever outbreaks occur, people like Glenn are just asking for the green light to use what he sees as the best tool against AI in our arsenal, vaccines. And at the end of the day, what's really at stake here is the continued existence of an affordable and reliable domestic egg industry in the United States, and that's definitely something worth protecting, both for the sake of the producers and the end consumers, and Glenn belongs in both of those camps. I do have one last question for you, Glenn. How do you prefer your eggs?
Glenn Hickman:
Honestly, poached. And you know why?
Greg Schonefeld:
Why?
Glenn Hickman:
Because a lot of people can't poach eggs. So if I order two eggs, I might get to sell them three, because one yolk breaks and they have to start over.
Greg Schonefeld:
That might be the best answer I've heard. 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 Schonefeld, and we'll talk to you soon.