Thursday, March 31, 2022

Big producers keep expanding

 The US financial analytical and data business, Bloomberg, says that consolidation in the egg industry is driving small farmers out of business.

Deadly avian influenza is spreading across the U.S. and is hitting commercial egg farms, forcing farmers to kill millions of hens. Feeding the birds is also costly, with grain prices high, partly due to supply chain shortages caused by Russia’s invasion of Ukraine. As a result, ​​​​​the U.S. industry is  shifting to producing mostly cage-free eggs

Economies of scale mean that the higher costs have little effect on major corporate producers such as Cal-Maine Foods Inc., the biggest U.S. producer, which has 20% of the market. It’s been buying smaller operators in recent years. The company is spending $82 million on acquisitions to increase its cage-free operations. Similar cost pressures are being experienced here and the big corporates are planning major expansions – particularly as politicians  trashed labeling standards, allowing intensive production to be described as 'free range'.

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