Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Very pleased to be joined again by Bill Skeby was
the executive director of the Colorado Egg Producers. He's also
the former chairman of the Colorado Egg Council. And we
should probably talk about horses sometime, Bill, but it's going
to be eggs today. It's going to be eggflation today.
So good morning and welcome back.
Speaker 2 (00:17):
Oh Ross, thanks for having me on.
Speaker 3 (00:19):
Very glad to do it.
Speaker 1 (00:20):
So it seems to me like egg prices have been
a little bit high and rather volatile in recent months.
Do you see it that way? And what have been
the key drivers of egg prices in the recent month
or two? And then I want to talk about what
Coloradon's need to look forward to at the beginning of
next year.
Speaker 2 (00:37):
You bet you, Yes, It's no secret that eggs seemed
to be in the news every day and as well
as inflation, as well as the cost of living, so
on so forth. Why are eggs going up in price? Well,
there's a couple reasons, two things I've already mentioned inflation
and the cost of the cost of living. The price
(01:02):
of eggs go up because of the transportation costs, because
of the grain cost, because of the cost of getting
them packaged and the cost of labor. Okay, so those
are the costs that are involved with that. On top
of that, we've been hit in our country by the
Avian influenza, which means that we lose flocks of hens
(01:28):
that are producing eggs. Therefore, the supply chain is a
lot lower than what we've had in the past. Egg
prices are part of a commodity price structure. The farmers
do not dictate the cost of eggs. It's a commodity.
And you, better than anybody else, knows about commodities when
(01:52):
the market. When the market changes, so do the prices
of those commodities.
Speaker 3 (01:57):
How muchymodity start to interrupt you? How much do you?
Speaker 1 (02:03):
Obviously, the prices of inputs into eggs aren't immediately represented
necessarily in the cost of eggs.
Speaker 3 (02:13):
It can take a little time to filter through.
Speaker 1 (02:15):
I note that over the past couple of months, I
guess there's been a massive sell off in the price
of corn, which should probably help egg producers. I'm expecting
there's going to be some decline in the price of
fuel based on what's going on with oil prices, but
we haven't seen too much of that yet.
Speaker 3 (02:33):
Is there any reason to think.
Speaker 1 (02:35):
That there would be any significant downward pressure on egg
prices anytime soon.
Speaker 2 (02:41):
I don't think so, Ross, I really don't, because the
eggs are sold so many months in advance, so I
don't understand how far that goes out with the contracts
of eggs. Just to be honest with you all, but
they're sold way in advance. And the other thing that
we haven't talked about, we've lost our flocks. But in
(03:05):
the state of Colorado, we started a trend back in
twenty twenty two to start to go cage free. So
there's only eleven states in the country that are totally
cage free, and those laws state that we cannot buy eggs.
You cannot buy eggs or sell eggs in the State
of Colorado unless they come from a cage free environment.
(03:29):
The cost of producing eggs in a cage free environment
is anywhere from seventeen to twenty percent more than the
conventionally caged egg. So in the State of Colorado, and
starting January first, twenty twenty five, all of our farms
have to be cage free. One of our farms has
(03:50):
spent over two hundred million dollars to retrofit their farm
into a cage free environment, so they take this very seriously.
That is another reason why the cost of eggs are
going up. We in the state of Colorado decided that
we're going to go cage free, and we only have
(04:10):
cage free eggs to sell.
Speaker 3 (04:12):
So I realized this is complicated.
Speaker 1 (04:15):
But all else being equal, approximately, how much more would
a cage free egg cost than a more conventionally created
egg in a smaller amount of space per chicken?
Speaker 2 (04:31):
I think you're talking in close to seventeen to twenty
percent were ofs. I just you know, I do.
Speaker 3 (04:35):
But how about in cents?
Speaker 1 (04:36):
How about an inaction in number of cents rather than
in percentage, because I don't know the base rate with
a percentage, So ten cents an egg, twenty cents an egg?
Speaker 2 (04:46):
Boy, you got me on that way. That part, I think,
I think you're looking at about five to five to
ten cents more pre egg.
Speaker 1 (04:54):
Okay, so maybe maybe a dollar a dozen. I'm just
going to use around number here. Now, you said that
one of the big egg producers has already spent an
immense amount of money on this, so and you also
said that the law actually goes into force at the
beginning of next year. But like you, as you noted,
(05:16):
companies can't just turn on a dime and do it
the old way and then immediately the next day do
it the new way. So they're doing they're investing already.
So to the extent that you might think that a
dozen cage free eggs from the same producer would cost
let's say a dollar more than a dozen eggs the
old way. How much of that dollar do you think
(05:37):
is already in the price because of investments they've already
made and are recovering now, versus a price that would
suddenly show up at the beginning of next year.
Speaker 2 (05:49):
Now you didn't tell it. I'd had to do maps today.
But that's hard to say because now the price of
that egg went up just formed the cage free part.
Now add in inflation, and add in we've got the
production done, so add in inflation and all the factors
(06:10):
that go into that. So I can't I don't. I
can't state that right now, Ross, I can do a
little bit of homework for you, But at the same time,
I think you're going to see that and the other
expense that we had, I need to go back a
little bit.
Speaker 3 (06:24):
The other expended just a few seconds here, Bill, Okay, we.
Speaker 2 (06:28):
The other expense that they've had with the avian influenza.
We had to repopulate all of our farms, and we
have we have five large farms in the stadium.
Speaker 1 (06:36):
How many how many hens either died or had to
be called because of avian influenza in Colorado?
Speaker 2 (06:44):
In Colorado this year two point three million across the
country seventy nine million. Wow? This and this disease does
not stop.
Speaker 3 (06:56):
All right.
Speaker 1 (06:57):
Well, so for listeners, you know, we'll come back to
this over time. But I just want you to understand.
You may think egg prices are high and relative to
a few years ago, they surely are. There are a
bunch of reasons for it. It's not just one thing,
as Bill is reminding us. And you know, per Bill,
who should know, it's not likely we're going to see
(07:18):
any real relief in egg prices anytime soon. Bill Skeby
is executive director of Colorado Egg Producers.
Speaker 3 (07:23):
Thanks for your time. As always, we'll do it again, Hey,
you bet you.
Speaker 2 (07:27):
Thanks for having me
Very pleased to be joined again by Bill Skeby was
the executive director of the Colorado Egg Producers. He's also
the former chairman of the Colorado Egg Council. And we
should probably talk about horses sometime, Bill, but it's going
to be eggs today. It's going to be eggflation today.
So good morning and welcome back.
Speaker 2 (00:17):
Oh Ross, thanks for having me on.
Speaker 3 (00:19):
Very glad to do it.
Speaker 1 (00:20):
So it seems to me like egg prices have been
a little bit high and rather volatile in recent months.
Do you see it that way? And what have been
the key drivers of egg prices in the recent month
or two? And then I want to talk about what
Coloradon's need to look forward to at the beginning of
next year.
Speaker 2 (00:37):
You bet you, Yes, It's no secret that eggs seemed
to be in the news every day and as well
as inflation, as well as the cost of living, so
on so forth. Why are eggs going up in price? Well,
there's a couple reasons, two things I've already mentioned inflation
and the cost of the cost of living. The price
(01:02):
of eggs go up because of the transportation costs, because
of the grain cost, because of the cost of getting
them packaged and the cost of labor. Okay, so those
are the costs that are involved with that. On top
of that, we've been hit in our country by the
Avian influenza, which means that we lose flocks of hens
(01:28):
that are producing eggs. Therefore, the supply chain is a
lot lower than what we've had in the past. Egg
prices are part of a commodity price structure. The farmers
do not dictate the cost of eggs. It's a commodity.
And you, better than anybody else, knows about commodities when
(01:52):
the market. When the market changes, so do the prices
of those commodities.
Speaker 3 (01:57):
How muchymodity start to interrupt you? How much do you?
Speaker 1 (02:03):
Obviously, the prices of inputs into eggs aren't immediately represented
necessarily in the cost of eggs.
Speaker 3 (02:13):
It can take a little time to filter through.
Speaker 1 (02:15):
I note that over the past couple of months, I
guess there's been a massive sell off in the price
of corn, which should probably help egg producers. I'm expecting
there's going to be some decline in the price of
fuel based on what's going on with oil prices, but
we haven't seen too much of that yet.
Speaker 3 (02:33):
Is there any reason to think.
Speaker 1 (02:35):
That there would be any significant downward pressure on egg
prices anytime soon.
Speaker 2 (02:41):
I don't think so, Ross, I really don't, because the
eggs are sold so many months in advance, so I
don't understand how far that goes out with the contracts
of eggs. Just to be honest with you all, but
they're sold way in advance. And the other thing that
we haven't talked about, we've lost our flocks. But in
(03:05):
the state of Colorado, we started a trend back in
twenty twenty two to start to go cage free. So
there's only eleven states in the country that are totally
cage free, and those laws state that we cannot buy eggs.
You cannot buy eggs or sell eggs in the State
of Colorado unless they come from a cage free environment.
(03:29):
The cost of producing eggs in a cage free environment
is anywhere from seventeen to twenty percent more than the
conventionally caged egg. So in the State of Colorado, and
starting January first, twenty twenty five, all of our farms
have to be cage free. One of our farms has
(03:50):
spent over two hundred million dollars to retrofit their farm
into a cage free environment, so they take this very seriously.
That is another reason why the cost of eggs are
going up. We in the state of Colorado decided that
we're going to go cage free, and we only have
(04:10):
cage free eggs to sell.
Speaker 3 (04:12):
So I realized this is complicated.
Speaker 1 (04:15):
But all else being equal, approximately, how much more would
a cage free egg cost than a more conventionally created
egg in a smaller amount of space per chicken?
Speaker 2 (04:31):
I think you're talking in close to seventeen to twenty
percent were ofs. I just you know, I do.
Speaker 3 (04:35):
But how about in cents?
Speaker 1 (04:36):
How about an inaction in number of cents rather than
in percentage, because I don't know the base rate with
a percentage, So ten cents an egg, twenty cents an egg?
Speaker 2 (04:46):
Boy, you got me on that way. That part, I think,
I think you're looking at about five to five to
ten cents more pre egg.
Speaker 1 (04:54):
Okay, so maybe maybe a dollar a dozen. I'm just
going to use around number here. Now, you said that
one of the big egg producers has already spent an
immense amount of money on this, so and you also
said that the law actually goes into force at the
beginning of next year. But like you, as you noted,
(05:16):
companies can't just turn on a dime and do it
the old way and then immediately the next day do
it the new way. So they're doing they're investing already.
So to the extent that you might think that a
dozen cage free eggs from the same producer would cost
let's say a dollar more than a dozen eggs the
old way. How much of that dollar do you think
(05:37):
is already in the price because of investments they've already
made and are recovering now, versus a price that would
suddenly show up at the beginning of next year.
Speaker 2 (05:49):
Now you didn't tell it. I'd had to do maps today.
But that's hard to say because now the price of
that egg went up just formed the cage free part.
Now add in inflation, and add in we've got the
production done, so add in inflation and all the factors
(06:10):
that go into that. So I can't I don't. I
can't state that right now, Ross, I can do a
little bit of homework for you, But at the same time,
I think you're going to see that and the other
expense that we had, I need to go back a
little bit.
Speaker 3 (06:24):
The other expended just a few seconds here, Bill, Okay, we.
Speaker 2 (06:28):
The other expense that they've had with the avian influenza.
We had to repopulate all of our farms, and we
have we have five large farms in the stadium.
Speaker 1 (06:36):
How many how many hens either died or had to
be called because of avian influenza in Colorado?
Speaker 2 (06:44):
In Colorado this year two point three million across the
country seventy nine million. Wow? This and this disease does
not stop.
Speaker 3 (06:56):
All right.
Speaker 1 (06:57):
Well, so for listeners, you know, we'll come back to
this over time. But I just want you to understand.
You may think egg prices are high and relative to
a few years ago, they surely are. There are a
bunch of reasons for it. It's not just one thing,
as Bill is reminding us. And you know, per Bill,
who should know, it's not likely we're going to see
(07:18):
any real relief in egg prices anytime soon. Bill Skeby
is executive director of Colorado Egg Producers.
Speaker 3 (07:23):
Thanks for your time. As always, we'll do it again, Hey,
you bet you.
Speaker 2 (07:27):
Thanks for having me
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