The Economics of Egg Farming 101

I ran into a veterinary colleague of mine in the cafeteria at the University today.  He is a cow vet who teaches at the vet school, and I’ve known him for years through hockey.  He asked me what I was doing in the cafeteria, and I explained how I was working on my Masters in Animal Welfare (and I needed coffee….duh!).  

We started talking about my interest in laying hen welfare, and he said he bought eggs from birds who got more room, and was willing to pay more for chickens that weren’t kept in cages.  “I know that [cages] is the most profitable way to keep hens, but I don’t like it” was what he said to me.  And that is where the conversation stopped being of any value.

Don’t get me wrong…..there was no animosity, no anger, no “throw-down” in the caf (I coulda taken him, no sweat), but his most basic assumption made the discussion useless.  I was disappointed….here was a guy who knows a LOT about animals….is very familiar with animal agriculture, and is not close-minded, or brainwashed, or a zealot.  He is, like ALL of us…..lazy.  He was told that putting birds in cages is done to increase profits, and he believed it….and never questioned.

To be fair, the laying hen business is different than most, and if you are not intimately involved in it, you have NO contact with it, so it is easy to accept the “common wisdom” and continue with life.  I would like to point out how things really work…as I see it.  If any of you reading this takes a few minutes and thinks about how egg farming works, I’ll be very happy.  If you disagree with me, I’ll still be happy….I just want you to think about your preconceptions.

NOTE: these points only apply to Canadian production, and Ontario specifically.  We have a “supply managed” system (unlike most jurisdictions in the world, which work as free-enterprise)…..this means that you need to own quota (basically, you need a license to own more than 99 laying hens), and since the amount of quota is fixed, it needs to bought from someone who already has it.

Consider:

  • Laying hen quota costs more than $200 per bird, regardless of production type (free-run, caged, organic….whatever)
  • White hens kept in conventional cages are the base of the payment system….all other types of production get a premium on TOP of this (~5% for brown, ~5% for omega eggs, 20-30% for free run, >30% for organic)
  • Cage systems cost in the ballpark of $40 PER BIRD to buy (see the images of cages in my video, or some of the pictures in my other posts….its a LOT of stainless steel!!)
  • Non-caged systems cost ~$20 per bird to buy
  • Caged birds will eat about 10% less than non-caged birds
  • Caged birds will lay about 3-5% more eggs than non-caged (really variable….well run non-caged farms will lay more than mediocre caged barns)

I don’t want to use exact numbers because some people don’t like it when you talk about how much they earn, and the farmers I work with are no different, and I don’t want to offend anyone.  The number that professional farmers use to evaluate their success each year is the profit per hen above the cost of the feed and the cost of the 19 week old pullet (the 2 biggest yearly expenses).  You will have to take my word for it that free run flocks will usually make $1-$1.50 more profit per year per bird than a white bird caged flock. 

If it costs the same to have the license to own the bird (by far the biggest expense in the system we have), costs less to build the barn, and the birds make more profit per year than caged birds…..how do the caged hens make more money?

I’ll let you in on a little secret…..they don’t.  Increasing profit is NOT why hens were housed in cages originally, and it isn’t the driving force today.  There are lots of reasons why hens are kept in cages, and I plan to talk about them in other entries, but to increase profits is not one of them (again….economics are different in other places….this discussion is about the Canadian model). 

Everyone has an opinion on the issue of keeping hens in cages, and I am not trying to change that (at least not in this post……), but PLEASE don’t think that egg farmers keep hens in cages because that is how they make more money…..it makes the base premise wrong, and the discussion on how to improve egg production can’t proceed from there.

Thanks for letting me get that off my chest…..back to your regular programming….

Mike the Chicken Vet

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2 responses to “The Economics of Egg Farming 101

  1. Pingback: Response to Activist Video | mikethechickenvet

  2. Pingback: A poultry vet responds to this week’s activist videos - Let's Talk Farm Animals

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