By way of introduction, I managed to pay for my last two years of college by being the hired hand on an egg ranch. Every morning — I mean every morning — I’d get up, drive to work, and feed 7,000 chickens. Then I’d gather their eggs and go to school.
Not all eggs are laid with shells; some are contained by just a translucent membrane. I could take those few duds home to share with my roommates. Shell-less eggs don’t keep very well, so we had to use them quickly, but at least they were free. Ground up oyster shells are put in the hens’ mash to provide them with sufficient calcium so they can continue being commercially productive. The birds also got lit up at night to let them think another day had gone by. I was also told that methedrine was put in their food to accelerate their production, but that may be hearsay.
Twice a year, each group of birds was put into molt. Their water was cut off, and their diet was changed, from “lay mash” to “grow mash.” The rest of the birds kept producing until their turn for molt came around. Grow mash was also used for young birds, called pullets, that were not mature enough to make eggs. They were purchased to replace birds that died and those that just stopped laying eggs. Live birds that stopped laying were sold to the pot pie and broth companies.
White eggs, being most common, are laid by Leghorn hens. In the 1930s, the agricultural extension service of U.C. Berkeley developed the strain of leghorn still in use today. Brown eggs are laid by Rhode Island Red hens. These birds are bigger than Leghorns and are thus better suited for cold weather. They also eat more and are more expensive to use for egg production.
Today’s jump in the price of eggs is a classic demonstration of supply-chain economics. Commodities are constantly consumed, and their prices are determined by the dynamic relationship between supply and demand. Bird flu reduced the number of laying hens and thus the number of eggs being produced. Prices naturally went up due to the shortage. The egg ranches that maintained their flocks could be profiting significantly, though there may also be insurers and trade associations that have their members sharing the risk, since communicable disease is a common problem in the poultry farming business.
The silver lining to this cloud is that poultry reboots in numbers quicker than any other form of livestock, especially when compared to beef. Economists use the term inelastic demand to describe compelling reasons for the consumption of certain commodities even when the price jumps up due to supply problems. But most consumers have some degree of discretion and can include affordability when deciding how many eggs they choose to purchase. I just went to Costco, and eggs were on my list, but there were none in the entire store. My checker told me that their daily shipment had sold out right after it was delivered, and if I wanted to buy some, I’d have to show up just as the store was opening. As a result, I am assuming that Costco’s price for eggs is still very competitive when compared to other retailers.
Another silver lining is that eggs have a very good shelf life, as long as their shells are intact. I knew someone who would buy only half a dozen eggs at a time because she feared spoilage. I told her that I buy two dozen at a time and have never had an egg go bad. After that, I came across an article that declared that Americans are the only people on Earth who bother to refrigerate eggs.
This all brings to mind the distinction between core inflation and overall inflation. Excluding food and energy from calculating inflation leaves out the primary essentials to life. But supply problems can often affect the price to the ultimate consumer regardless of political meddling with the value of money. May I again suggest that the value of gold is a particularly accurate standard to which money — any nation’s currency — can be measured, since its supply and demand are relatively constant?
Image via Pixabay.