The Chicken Story

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Other developments began in the 1930s that transformed not the egg—an evolutionary creation of such awesome perfection that it could hardly be improved upon—but the way eggs were farmed. Eggs, like chickens, had long been simply a byproduct of other kinds of farming, produced a few at a time by millions of flocks that seldom numbered more than fifty birds each. And because the chickens largely fended for themselves, there were few out-of-pocket expenses and so no one cared about costs. As a result, between 1910, when the federal government began keeping track of egg production and prices, and 1943 the price of a dozen eggs remained remarkably constant in real terms.

BUT THE GREAT DEPRESSION FORCED MILLIONS OF SMALL farms out of existence, reducing the number of flocks, and some of the remaining farmers, seeing opportunity, began to specialize in egg production. Suddenly there were people who, in their own interest, began to care about the cost of producing eggs and thus about the way of producing eggs: professional egg farmers. Betty Macdonald’s classic memoir The Egg and I (as well as the equally classic movie based on it, starring Claudette Colbert, Fred Acura, and Marjorie Main) had its origins in this subtle economic shift—proof that art can arise from anything.

 

The first change these new egg farmers made from traditional poultry husbandry, as the broiler raisers before them had done, was to begin confining their chickens. When the birds ran free, their eggs had to be hunted for, and every day was Easter—although, to be sure, chickens tend to lay their eggs in the same places over and over again. This was labor intensive, and many eggs were overlooked, fell victim to such predators as rats and snakes, or were broken. Confinement increased egg production per bird immediately and thus ensured higher profits for farmers and lower prices for consumers.

But confinement brought its own problems. At first the birds were usually kept in houses that had dirt floors covered with wood shavings. As the manure built up, so did the incidence of disease as the chickens scratched, which chickens will do even when they are not hungry. To solve this problem, farmers began putting their chickens in houses with wire floors so that the droppings could fall through and be removed. The health of the chickens, and thus their egg production, greatly improved.

The keeping of birds in tiers of wire cages, where they could be fed, watered, and cared for more easily, soon followed. The price of a dozen eggs began a fifty-year decline. Much of that continuing decline has come from ever- increasing economies of scale as the number of egg farms has steadily dropped and the number of chickens at each farm has increased. In the 1940s an egg farm with a hundred thousand birds was considered very large. Today a farm needs ten million birds to have that status.

As a result of these enormous numbers—an egg farm with ten million birds produces well over half a million dozen eggs per day —even the most minor savings per egg makes major improvements to the bottom line. Just a tenth-of-a-cent drop per egg in production costs increases the daily gross profit by more than six thousand dollars, or over two million dollars per year.

Although the number of independent egg farms has drastically declined since the days Betty MacDonald wrote about, there are nonetheless still about 350 companies in the United States, and competition among them remains fierce. Much of the decreased cost that ensues from innovation, then, is necessarily passed along to the consumer as lower prices. This, in turn, requires an unceasing search for new ways to drive down costs if profits are to be maintained, just as Adam Smith predicted.

 

TECHNOLOGY, GENETICS, AND DECREASES IN THE USE OF manpower—the last almost always representing the most expensive economic input nowadays—have made profits possible. A state-of-the-art hen house today holds around a hundred thousand birds in tier after tier of cages stretching the length of two football fields. Water is piped in while robots dispense food every hour in carefully controlled amounts. The cages are slightly inclined so that the eggs produced roll down onto a conveyor belt and are whisked away for cleaning, grading, and packing.

Some houses are built underground to save heating and air-conditioning costs, while light, which stimulates egg production, is provided at the optimal level. About the only thing that is not automated today is the removal of dead chickens. Only about three in ten thousand die per day in a well-regulated hen house (just about half again the human mortality rate in this country). But out of two hundred fifty thousand, that is still seventy-five dead birds a day that must be removed immediately to prevent disease.