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.
Mark Kleinsmith: We sat down at breakfast, we're sitting there and he says, "You know, I like your equipment, but I can't buy it." I said, "Why not?" He goes, "Because you got a mustache." I said, "You mean if I shave this mustache, you'll sign this contract?" He gave me one of his little pocket knives, cut my mustache off, and I said, "Is this good enough?" He said, "Yep."
Greg Schönefeld: Hi there. Welcome back to Eggheads. I'm your host, Greg Schönefeld. Have you ever met someone who could sell you on just about anything? And it's not just because of their slick sales pitches, but because they've been there, they've done that, they make you feel comfortable, and on top of that, they're dang entertaining and full of stories. That's Mark Kleinsmith.
Mark Kleinsmith: He invited me in and all the employees were there. Well, at that time, I was trying to sell him some pullet houses. So he said, "Okay, if you want to sell these pullet houses, you'd be at my house and you're going swimming at 5:30 in the morning."
Greg Schönefeld: Mark's career in the egg industry spans decades, and it may be safe to say he's seen it all, from cutting edge innovations in poultry housing, to some of the most memorable sales meetings you'll ever hear about. Today we're diving into Mark's world, a blend of hard work, plenty of humor and raw determination. Mark's journey took him from picking up dead birds on Thanksgiving to managing multimillion dollar sales and developing strong relationships across the industry. Along the way, he's made a name for himself, not just as a savvy salesman, but as someone who understands the customer's needs, digs in with them, and, as we'll hear, is willing to do just about anything to gain trust and seal the deal. Mark's career started at Michigan State where he planned to be a veterinarian, but found his way into poultry science instead.
Mark Kleinsmith: I was trying to be a vet and it was probably the best decision I didn't do, but I really liked the chickens and I figured if I could learn everything about this little chicken, I would do well in the business. I graduated in Poultry Science, four year program. Then from there, I went to a company called Aerovent Fan and Equipment, and I was their service manager, and I went around the whole United States and Canada and gave talks about how to fix it, how to install it, and from that point on, I wanted to learn a lot more. I wanted to learn about fee conversion, mortality, egg numbers.
Greg Schönefeld: It was obvious to many around Mark that sales would be a natural fit and the best next step in his career. Over time, Mark built a reputation for hard work and eventually very big results.
Mark Kleinsmith: So I looked at an opportunity in sales, moved on to short-time cage systems, and when I went there, they had $900,000 in sales, and I thought, for the month or for the year? One thing, I loved challenges, and in this business, a salesman is always challenged. Well, they pitted me against three other salesmen and said whoever in the next two years will accumulate the most sales will be sales manager. Well, the first year out of the box I hit 5 million, and then I brought them, over my course of my career, to 50 million. So from 900,000 to 50 million.
Greg Schönefeld: So when you sold 5 million at Short Time the first year, what were the keys to that? How'd you go from kind of like a business unit that was doing 900,000 to you alone among three salespeople doing 5 million?
Mark Kleinsmith: Number one, you had to get to know the customers. I found out that maybe some of the past employees were not that well accepted at some of the places. So I went out my first year, I was out 250 nights. My wife didn't like that very much, but I mean, I was on my back showing them how to fix a Felix auger. I was walking knee deep in manure because no one else would do it. And hey, you know what? I love a challenge. I was young, I was energetic. I would work till midnight. It wasn't a nine to five job, it was, get the chickens fed, get the eggs out, and go from there. If it took 20 hours, it took 20 hours. And that's some of the things that made it, I think, made me successful in the business just because I was willing to do things to help them.
Greg Schönefeld: You really kind of put yourself in the mind of the customer and helped solve their problems.
Mark Kleinsmith: And when they had a problem, my rule was to react within four hours. Back when I started, there were no cell phones, there were no computers, so if you had a landline, you had to respond to that immediately. And that immediate response because they were in dire straits and they needed to get their chickens fed or they need to get their conveyors going. It just was so critical for them, and I just sort of helped them out. Our competitors at that time were Big Dutchmen and also Favorite, which was out of Holland, Pennsylvania. My goal was to beat them. And I mean I did. And when I was relieved of my duties, I think there were a lot of people that were very happy. The fellow that started Short Time, Howard Brambach, I worked directly for him. And, well, when I left, there was probably about a thousand employees and they made me over all the sales, like all the broiler turkey, Brock bins for two years. And you know what? It was too much.
And I realized my limits, and I realized what I really liked was the egg business and the egg producers themselves. So that and these relationships, and a lot of them were not business. A lot of them were just, "Hey, how's the family? How's things going?" Like Rose Acres.
Greg Schönefeld: Maybe we don't need to name names, but I wouldn't mind you sharing the story of maybe one in particular that made you really have to jump through some hoops to get the sale done.
Mark Kleinsmith: Oh, I'll name names because he's a great. Dave Rust was the patriarch of Rose Acres. He was very eccentric, but he was a genius, and people that worked with him and knew him. Dave challenged you every single time. So I went down one time and I went into a meeting and he invited me in and all the employees were there. Well, at that time, I was trying to sell him some bullet houses. So he said, "Okay, if you want to sell these pull houses, you'd be at my house and you're going swimming at 5:30 in the morning." I'm like, hey, I'm an athlete. I said, "I'll go swimming." I go into his house and I open the door and no lights are on. I'm going through. They had a sign that said pool. I went back to the pool and there were no lights on. As soon as I opened the door, it was 5:30, lights came on, music came on, Dave came up. I was taught that you don't pass him. I could have passed him 20 times. He dog paddled 39 laps.
And the reason he did 39 laps is he had a plus three club. He had built 36 houses at Court Acres and you had to do plus three, the extra effort. So after swimming in there, I thought, well, I'm going to sign this contract. So I got in and we sat down at breakfast and his wife served us eggs and we're sitting there and he says, "I like your equipment, but I can't buy it." I said, "Why not?" He goes, "Because you got a mustache." I said, "You mean if I shave this mustache, you'll sign this contract?" He gave me one of his little pocket knives with the little scissors on it. I went into the bathroom, I cut the mustache off. I come out and I said, "Is this good enough?" He said, "Yep." Signed the contract, gave me a check, and I bounced to Old Town Victoria all the way back to Short Time. And so we had done that, then we graduated to up in Newton County, which was the first complex in northern Indiana, in Brooke, Indiana. Well, I had the contract ready.
I remember it was $5,632,210, and it was for a million and a half. It was equipment, ventilation, watering, everything. So I went down again, I met him at his house, and this time he said, "Well, I'll sign that contract, but you're going to have to sign it in that tree house up there." He had built a tree house 80 feet in the air. And I thought, okay. The wind was blowing, that thing was going back and forth. I don't really like heights, but I stuck that contract in the back of my pants. I crawled up there. We sat on a four by eight sheet of plywood, and he signed that contract.
Greg Schönefeld: Oh, man.
Mark Kleinsmith: And again, challenge. It was a challenge. And you know what? Hey, he was fun to call on.
Greg Schönefeld: If you haven't picked up on it yet, Mark can tell a story.
Mark Kleinsmith: An interesting guy was Ernest Mayhard out in Texas. Ernest was a great guy, big guy, huge guy. Benefited by selling 200 acres to Ross Perot, but he sold that for 10 bucks a square foot, 200 acres. Do the math. Then got out of the cage business and basically Cal-Maine took that over. But I went there one time to sign a contract with Mr. Mayhard, and we went through, I had my salesman with me, Buddy Richie, and we went in and we went line item, line item, and I realized that I handed him the contract, but I realized that he couldn't read it. And so that's why I explained everything and went and took my time and went into detail. So at the very end, he says, "Well, yep, I want the equipment." He says, "You want me to sign this?" I said, "Yeah." He signed it. He asked his daughter, Marguerite, to get a check for me, brought it to me, and then he looked me right in the eye and says, "Do you need anything else?" And I said, "No." And he says, "Okay, you disease carrying SOBs. Get off my property."
But you built relationships, whether they were southern, whether they were northern, whether they were Canadian, whether they were Californian. I found that when you looked at the United States and you started in California, those guys were laid back, the Demmlers, the Gemperles, all those people. And as you move to the Midwest, they were more common. And you got on the East coast like Jack DeCoster, they were a little crazier and a little bit harder. When I would call on Jack DeCoster, who was from Maine, hey Mock. When Jack would take me, I had to drive. And I learned why, because he lost his license for so many speeding tickets, but he'd never tell you this. So you're trying to sell him something. I think I sold him like 140 houses or something. But he would make you drive, so you were like his chauffeur. And he was quite an interesting guy. He was the guy... I don't know if anybody remembers Popeye cartoons. There was a guy named Wimpy, and he'd gladly pay you Tuesday for a hamburger today. That was Jack DeCoster. He would buy something and then hopefully you got the check. And we're talking millions. You had to really stay on him.
Greg Schönefeld: The stories kept coming. Trust me, there are more, a lot more. I had to stop the recording, I was laughing so hard. But the hilarious stories aside, Mark can paint you a picture of the evolution of the egg industry.
Mark Kleinsmith: When I started in 1982, there were 6,000 egg producers. Now what? You got 63 that produced 95% of the eggs. So my goal was to stay on good terms with all those producers, and I was able to do that. And we had but interesting times. If there was a Mount Rushmore of egg producers in the eighties, you'd have Dave Rust, Jack DeCoster and Anton Bullman. And those were the three big guys you had to get to know to be able to get some of the business.
Greg Schönefeld: As funny as it is, it does build trust. I mean, he's got to know if you're willing to do that, you're not going to screw up the job after doing that, that's for sure.
Mark Kleinsmith: I'm not going to lie to them. Don't ever lie to a customer. You know what? Things are hard, and sometimes you just got to put it out on the table. And I've had some customers say, "Kleinsmith, I don't like what you're saying, but I know you're telling the truth, and I got to accept it." And instead of going around in circles and playing games, I was straight to the point, and I think a lot of people got to know me for that.
Greg Schönefeld: I want to come back to something Mark said a moment ago. The egg industry has undergone dramatic changes over the decades, evolving from thousands of small producers to just a handful that really dominate the market today. With that consolidation came advances in technology, shifts in regulation and changing consumer demands, all of which reshaped how producers operate today.
Mark Kleinsmith: In the early eighties, permitting was pretty easy to get. For example, in Indiana, you could apply for a permit and get it in about four to six weeks, now it's years. And it was around 1988, at Short Time we housed 28 million layers. But how did we do that? We did that because we were at 48 square inches, 12 by twenties with five birds in it. And then you could get a mass amount of birds, get a lot of eggs, and built the industry up from 200 to 250 to 300 to 325 and million as far as bird numbers. And what we saw in the evolution was high rises because they were easier to get permits because you had storage for the manure, which they were very concerned about. They were concerned about the bird health, and that's where the ventilation and the lighting and everything else came in. But you saw from two-tier hanging stair steps to three-tier A-frames to four-tier to five-tier, all A-frames, and that stayed that way until the belt revolution came in.
And that was basically belt cages that took the... There was no manure dropage, there was nothing, and there were straight vertical cages. And those cages could get as many birds as in the A-frame and maybe a little more because of their more compact as far as a box versus an A-frame.
Greg Schönefeld: Over time, consumer and activist pressure grew and the industry had to adapt. This meant increasing space allowed to each bird and redesigning entire systems to meet new standards.
Mark Kleinsmith: But throughout this entire time, you built relationships and that meant going to a lot of the state meetings to support them. While you're there, you go to their farms and you saw that there was an influence from Europe. We had the influx of the FACCOs, Tecnos, Valleys and the other cage manufacturers come in. And even today, you see a little bit more of others coming in, whether it be Fienhage, and they've got a big market share throughout the United States. But again, they did it by performance and friendly systems for the producers themselves.
Greg Schönefeld: And the performance has kind of had maybe different meaning over time, I guess, because as you said, maybe at one point the goal was, okay, how many birds can you put in a high-rise? Was the goal. And maybe that's a consideration, I'm sure, because of economics. No matter what kind of system you're in, you kind of have to look at that. But some of these environments have changed quite a bit now, right?
Mark Kleinsmith: You look at cost. When we put in, say, a big house with 60,000 back in the early eighties, then it got to be a hundred thousand. But you know what it cost? I mean, a turnkey job at 48 square inches for 120,000 birds was 5.50 a bird. So the outlay, and they didn't have to have as much money as they do now, which the systems are anywhere from 40 to 60 bucks a bird because of the increased square inches. And one of the things I brought up when all this came about of when we had to change from 48 to 53 to 64 to 144 was how are you going to do it? Because you needed to have three times the equipment as versus 48 square inches. So that took more installation time, more labor, and a lot more money as far as we see right now in today's markets.
Greg Schönefeld: So talk about that transition and now what are your thoughts on the transition to cage free? Because that's a whole other leap, right?
Mark Kleinsmith: I've been very outspoken about this, and one of the reasons is that we had a chance back before Prop two went in in California to really head this thing off. And I don't know if you've noticed, most of the farms that are getting hit by AI right now are cage free. Why is that? Well, because the birds are commingling. And they wanted them free and they wanted them to have their travel and fly and all that. Yeah, that's great, but it also helps in the spread of disease very, very quickly. And it also provides a little bit worse environment than the conventional systems. I mean, I've been at several farms that have conventional and have cage free, and if you gave the worker there the choice, he'd go to the conventional every time. I just saw that there wasn't the spread of disease in the conventional systems that I see today.
Of course, AI wasn't prevalent until 1988 in Pennsylvania, then we got into Newcastle in California, and then AI has been here, and I mean really bad in the last three months. I've seen the evolution of what is cage-free. Myself in watching the processing of the eggs and watching what... A lot of my friends ask me, should I buy those free-range eggs or should I buy conventional or should I buy these? And I always say generally it's the same bird, usually it's the same feed, and a lot of times it's paperwork as far as on the cage-free side and especially on the organic side. So what are you getting? What are you getting? Are you getting any more nutritional value out of that egg? Are you getting those type things? Are you making it harder for your workers? I think right now... I'll give an example. In the U.S, I've always said that we've always had a choice. I want to pick this. I want to use this equipment. Well, Canada went through the same thing and they have a choice today of either using enriched cages, which I really like.
I think that gives the bird everything it needs versus cage-free. Well, when you have a choice, what did they choose? Well, I worked for a company that sold watering and we had a 90% market share in all the cages, so I knew where all the watering was going and on what systems they were going on. It's about a 70% enriched to 30% cage-free in Canada in the years that I supplied the watering, which wasn't too long ago. So if you're given a choice, and I'll tell you, some of the research was always done in Guelph in Ontario with birds and how they reacted to different systems and were they happy hens or what? Those are some of the things that they did and allowed the enriched cage. And I still think the U.S should have done that because I still think that we should have a choice.
Greg Schönefeld: Obviously, and we've discussed this in previous episodes, shifting the industry to cage-free systems is no small task. It isn't just expensive, it's logistically daunting.
Mark Kleinsmith: When all this came about by UEP, we've got to go to cage-free, we've got to 144, I sat in several meetings and contested with them being through it myself, "There's no way you're going to do it by 2025. There's no way." "Oh, yes, we can." I said, "Well, good luck with that." I made a prediction that they'd hit 35%. Look at today's. What is it? 40? So you're asking the challenges. You got another 60% to go, and how many farms is that? How many places? How many new buildings? Do you know the lead time on cage-free equipment right now and some major of the... Take a Techno, FACCO, Dutchman Fienhage, it's going to be about 20 weeks. 20 weeks, one house. That's really holding things back too.
Greg Schönefeld: To really even make it possible to run cage free, you got to start with the permitting. Then there's the construction, the equipment, and then you're talking down to the install crews is all a challenge just to get that in place. And you haven't even gotten into managing the environment, which is kind of a new challenge for farmers as well, right?
Mark Kleinsmith: Many of the places that I've been, I would say 60 to 75% have built new and the others have remodeled. But you've got a footprint that you got to work around, and a lot of times, unless the don't customize that equipment, you have a hard time fitting it in an existing building. But they do that for a reason because they already got a permit, they already got a footprint, they don't have to go through all that rigmarole to get that done.
Greg Schönefeld: You touched on Canada's approach with Enriched versus Cage Free. So it sounds like your thoughts there, I mean, I guess, they were given a choice is what you were saying before. Basically, is it that the producers have a choice or how's that working?
Mark Kleinsmith: Yeah. Well, number one, Canada's under a quota system. They can't just go out and build a house. They have to have a little piece of paper that has, which is about $400 Canadian a bird right now, just that little piece of paper, to say, let's put in 10,000 birds times 400. That isn't the equipment, that's not the building. That's the right to have chickens. So now when they're over there, those are smaller houses just because they can't get that quota. Now, as their population increases, they increase their quota both for broilers, layers, everything, milk, but it's tough. So they said, "I don't have that much money. I want to build this style of system." And so the people in Canada just said, "You have two choices, Cage free or Enriched." They didn't have a lot of experience with Enriched either. That was a new concept right before the Cage free.
But you take a farm like JS West in California where they put cameras up above to show people, here's what the activity is of the birds in there. They weren't hurt, they were happy, they were fed, they were getting their eggs, they weren't mistreated. I would say in my 46 years, I had maybe one or two farms where I saw a neglect of birds. But you know what? If you're in the business to make money, and like I tell people, you can keep your sustainability, I like profitability. So when you go with profitability and you make money, then that's the kind of system you want to work around, that you employees are happy with and that type of thing. And I think that's part of it in Canada, that they like that and they can see the birds and they can observe them, and if anything happens, it's segmented. It's caught in this part of the house, not everywhere else.
Greg Schönefeld: In rounding out my conversation with Mark, he touched on a topic that I hadn't considered but found interesting, bird counting. Accurate data on bird numbers is critical for price discovery and production planning, yet gaps in the system create challenges for producers and the market. Mark shared his thoughts on why this issue matters and how it could be improved.
Mark Kleinsmith: Every year, Watt comes out. They don't produce egg industry anymore, but they come out with something like that of all the bird numbers and all the companies that have those bird numbers. And the numbers, to have adequate price discovery, you need to know how many birds are out there. The USDA puts out bird numbers, and the USDA is a government agency, the same one that runs Amtrak and the post office. How's that working? The problem is that I don't think all the birds are accounted for. There were several farms I was on that were never listed, and that has a big problem on egg pricing and price discovery itself. My biggest question is why don't they count the birds in Texas? I mean, if Indiana wanted, did they say, "I don't want you to count the birds in Indiana." Would they be able to do that? I know they asked for privacy because Cal-Maine has the lion's share, but there's other MPS and others that have things in Texas. So as far as price discovery, I think they can do a better job and help the producers.
Greg Schönefeld: To really have clear bird counts would be key.
Mark Kleinsmith: It has to be. And if you don't have those adequate numbers... There's some guy in, I'll pick a state, some guy in Wisconsin, some guy in South Dakota maybe has a hundred thousand birds. That's not much. But you go to some of these where they have 500, 600,000 and you're like, why aren't their name on the list? Well, it's because no one really talked to them. No one knew about them. In the year I retired, I would say I was on 90% of every egg farm in the United States. So I got to know them, and they'd take my call because I came through when we did business. I also saw in the eighties and nineties ,egg industry, they would put a producer on the cover of their magazine and say, "Look at this operation." That was like the kiss of death. As soon as they put that person on, something bad happened. So it was like, don't go on the cover.
Greg Schönefeld: One last thing, back on the thing about the bird counting, when you said Texas doesn't count their birds, and maybe we don't have great counts in general, that seems especially important with AI, right? As we're losing birds at any given time. In the farms, it's all supply and demand are the big drivers, and when we don't know the supply and the supply is changing, being disrupted by AI, that'd be all the more reason why these counts would be valuable, I would think.
Mark Kleinsmith: Well, in the last couple of weeks we've had 1.6, 4.5 million, 2.0 million. Well, what happens after that? You have pullets, and if they don't get hit along with the layers, if they're in close proximity to the farm, within 10 kilometers, you are going to have to get rid of those. Well, then you got to start with baby chicks. Well, guess what? All the breeders, whether it be Hendrix, whether it be Highline, Lohmann, H&N, well, they already have these set schedules for replacing pullets, I mean, years ahead. You put a three-year plan out. Well, what are you going to do? Are you going to tell this guy, "Hey, I'm sorry. This guy got AI and I got to help him out. You're not getting your birds." It has put a strain overall on the breeders. How do you get around that? There's some people that... Well, there's a company out in California, CV, they got hit with AI. They probably won't be able to repopulate until starting next March. Can't get chicks, can't get them grown, can't get them put.
I've seen people take systems and put birds in that are maybe 10 weeks old, 12 weeks old, and put them in a layer system just because they had to restart the pullet system again and put more birds in to keep that supply going, which was a smart move. One of my best friends that I've learned to and I really like over the industry is Marcus Rust. And Marcus is a guy, he's a thinker, and Marcus has probably 35 patents. One of them is what I call the day one to death cage, which is the ones he put out in Arizona and northern Indiana and southern Indiana where you put in the day old chick, and then it runs its course, whether you're laying them out to 108 weeks, 105 weeks, whatever. But it took that and put it in one system instead of having two systems. So you could regenerate pretty quickly because you already had the facility if you had to get rid of the birds.
But Marcus has turned over as CEO and also chairman of the board to Tony Wesner, another fine fella at Rose Acres. But he's looking for ways to improve on everything, and he's a thinker, man. He's a thinker.
Greg Schönefeld: Mark's stories aren't just entertaining, they're a testament to a career built on hard work, creativity, and a deep understanding of the egg industry's evolution. A guy who would shave his stash for a signature, but also one who can recall with precision the challenges and nuances of the cage-free transition. His thoughtful insights are backed by decades of experience, making his opinions both credible and compelling. What especially stands out to me about Mark is his hard work, the many nights he spent away from his home dedicated to serving his customers, the farmers, and also his willingness and attitude to dig in, get his hands dirty and go to great lengths to help the customer with anything he can. He provides an inspiration that anyone in sales or service can take to heart, including myself. There's no doubt that ethic was at the core of his success in the industry. Conversations like this remind us that the heart of the egg industry lies not just in technology or regulations, but in the people who it.
From forging relationships with producers to navigating the monumental shifts in production, Mark has seen it all, and his stories bring those challenges and triumphs to life. A huge thank you to Mark Kleinsmith for sharing not only his incredible stories, but also his wealth of knowledge about the egg industry. 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 let us know. We're all eggs, I mean ears. Until next episode, I'm Greg Schönefeld, and we'll talk to you soon. Mark, I do have one other question for you.
Mark Kleinsmith: Sure.
Greg Schönefeld: How do you prefer your eggs?
Mark Kleinsmith: You know what? Sunny side up. I take those eggs and I tell the person, buy the cheapest eggs because they're the same bird, same feed, and you know what? I've never been disappointed. It's always been good.
Greg Schönefeld: So the cheapest eggs on the shelf sunny side up. That's the way to go.
Mark Kleinsmith: That's it. You're exactly right.