Patrick Thomas
Appearances
The Journal.
An Eggspensive Dilemma
Eggs are just so ubiquitous. That's what's for breakfast, right? Like, Americans generally have about 279 eggs a year, so about six a week.
The Journal.
An Eggspensive Dilemma
Steak is always the most expensive, followed by pork, which has always kind of had its weird middle ground between chicken and beef. Chicken is always the cheaper of those meats. And then you have eggs, which loves to fancy itself as the cheapest protein. When we're in a depression, a recession, people tend to go buy eggs because it was even cheaper than chicken when times were really hard.
The Journal.
An Eggspensive Dilemma
Once it is confirmed in a flock, you just kill the whole flock. So when one barn gets infected, you might be putting down four million hens at a time.
The Journal.
An Eggspensive Dilemma
Yeah, it's a lot. It has just been absolutely devastating for egg farmers, producers, the whole supply chain over really since the start of 2022 is when we first started hearing about it pop up again. But it just, it has not gone away. There's little signs that it is going to go anywhere.
The Journal.
An Eggspensive Dilemma
It's about 160 million commercial chickens and turkeys. Just chickens, it's over 120 million egg-laying hens.
The Journal.
An Eggspensive Dilemma
The funny thing is, not really. Consumers have always just kept buying eggs. It's just, think about it. There's not that many things you can just substitute for eggs. There's not another ingredient that comes to mind. There's some other products or fake egg products, but they tend to be a little bit pricier. There's just no good substitute for eggs.
The Journal.
An Eggspensive Dilemma
Well, especially if you're a cage-free operation or a pasture-raised egg operation, you're going to literally have to chase the chicken in some of those barns. So, you know, it's more complicated than I think some people think we can flip a switch and just vaccinate.
The Journal.
An Eggspensive Dilemma
The reasoning is a bit complex, but it boils down to this, and that's that all of the other countries that import poultry products from the U.S. would have to sign off on our vaccination strategy. So they would have to approve the vaccine we're using, how we are surveilling the birds after it is administered, all of those different types of nuances of vaccinating an animal.
The Journal.
An Eggspensive Dilemma
And essentially, we'd individually have to go to the more than 150 trading partners of the United States to do such a thing.
The Journal.
An Eggspensive Dilemma
The general fear is that vaccines do not completely prevent infection and could mask the disease's presence. So it's always a safety concern of whether we're bringing the virus into their country.
The Journal.
An Eggspensive Dilemma
The egg industry has really changed their tune. It has been a breaking point for them. They say it would basically be more worth it to vaccinate the flocks and not have to worry about infection than lose out on their exports. So the egg industry is willing to bite the bullet on that. But the broiler chicken industry, the Tyson Foods, Purdue Farms, Pilgrim's Pride, those guys...
The Journal.
An Eggspensive Dilemma
are not willing to lose out on exports because that is a huge deal to their bottom line to have that market.
The Journal.
An Eggspensive Dilemma
There's a split in the poultry industry, yes, over vaccinations.
The Journal.
An Eggspensive Dilemma
So Kevin Hassett said that essentially that the administration wanted to find new ways to address the bird flu outbreak.
The Journal.
An Eggspensive Dilemma
So by Medicaid, I think everybody assumed he meant vaccination. Like, there's no Tamiflu for birds here in this situation. But we don't really know what they're talking about yet.
The Journal.
An Eggspensive Dilemma
I will be perfectly frank. I did not think we were going to get here two years ago. So the fact that we are talking about it is pretty remarkable. Two years ago, at least when I was talking to people, they're like, you know, people toss it out. It was really talked about as like unfathomable that we would actually reach the point of vaccinating layer hens. And now it's like, nope, we got to do it.
The Journal.
An Eggspensive Dilemma
There's a lot of nuance to it, but we are closer than ever to vaccination.
WSJ What’s News
Grocers Try to Hold Prices Steady as Tariffs Threaten Produce
It's just a tough math for these guys. And some of them took losses last week on this. And trying to figure out what to do with it has been really complicated for a lot of people in the supply chain.
WSJ What’s News
Grocers Try to Hold Prices Steady as Tariffs Threaten Produce
So the biggest item that you're going to see, fruits and vegetables. The first thing in the supply chain that you would see affected, the tariffs are constantly changing, but we import quite a bit of fruits and vegetables from both Mexico and Canada. So depending how the tariffs work out, that would be an area really affected, especially if you think about produce.
WSJ What’s News
Grocers Try to Hold Prices Steady as Tariffs Threaten Produce
Perishable goods, you can't put it on ice like you could even in meats. So you're going to see that cost pass down the supply chain significantly. a lot faster than you would, say, something else like the ingredient in a cereal that used maybe wheat imported from Canada.
WSJ What’s News
Grocers Try to Hold Prices Steady as Tariffs Threaten Produce
It's a tricky equation for them. If you think about the supermarket right now, they're balancing a lot of costs increases on certain commodities. One of the grocers that I talked to for the story talked about his 80-20 rule. For example, you price 80% of the wholesale increase and then eat the other 20%. So basically he's been doing this with eggs. And what that does for him is
WSJ What’s News
Grocers Try to Hold Prices Steady as Tariffs Threaten Produce
Is his eggs look cheaper than store down the street? Maybe it's a big Kroger, Albertson store, Whole Foods and might gain market share from them because the consumer is going to see that. Maybe they'll think, wow, this is the low priced retailer. I'm going to keep coming back here.
WSJ What’s News
Grocers Try to Hold Prices Steady as Tariffs Threaten Produce
Well, that's one of the things that companies are starting to talk about. Kroger, about a week ago, talked about their willingness to start looking at their supply chain and shifting around to some trading partners that maybe aren't immediately of concern to the president about which country he's going to slap tariffs on.
WSJ What’s News
Grocers Try to Hold Prices Steady as Tariffs Threaten Produce
One of the produce companies quoted in the story, he talked about the uncertainty that the last two weeks has brought, and he has had to cancel orders, bring them back. He paid two days worth of tariffs. And instead of passing that along to the customer, ate the cost. It's just a tough math for these guys.
WSJ What’s News
Grocers Try to Hold Prices Steady as Tariffs Threaten Produce
And some of them took losses last week on this and trying to figure out what to do with it has been really complicated for a lot of people in the supply chain.
WSJ What’s News
Grocers Try to Hold Prices Steady as Tariffs Threaten Produce
Thank you for having me.