Photo courtesy teejaybee via FlickrIn his recent New York Times op-ed, “Math Lessons for Locavores” — discussed at length by several contributors in the first edition of our new “Food Fight” feature” — Stephen Budiansky writes:
The best way to make the most of these truly precious resources of land, favorable climates and human labor is to grow lettuce, oranges, wheat, peppers, bananas, whatever, in the places where they grow best and with the most efficient technologies — and then pay the relatively tiny energy cost to get them to market, as we do with every other commodity in the economy.
Budiansky is essentially applying the doctrine of comparative advantage to food — the idea that every region should specialize in producing what (if any) crop it can grow more cheaply than other regions, export it widely, and import everything else its residents need to eat.
In doing so, he is defending the intellectual basis for America’s and what is fast becoming the global food system: concentrate production of key commodities in certain regions, and let the magic of trade ensure that everyone gets plenty to eat.
The massive ongoing recall of salmonella-tainted eggs — which expanded this week to include another 170 million eggs, for a grand total of more than half a billion, with more possibly to come — got me to thinking about Budiansky’s defense of regional consolidation of food production for maximum efficiency.
By this logic, there’s much to love about the U.S. egg industry. According to Food & Water Watch, half of U.S. egg production is concentrated in just five states: Iowa, Ohio, Indiana, Pennsylvania, and California. And for decades, egg producers have been scaling up and implementing “the most efficient technologies” — forgoing the farmyard chicken run and moving their hens into massive, streamlined, highly mechanized factories. Iowa State University’s Ag Marketing Resource Center (AG MRC) puts it like this:
In the table egg industry, specialized production replaced the general farm flock due to improvements in breeding, feeding, disease control, management, and marketing. Technological innovations in the 1950s and 1960s, including automated egg washers, blood spot detectors, and automated egg cartoners, encouraged large-scale production and mechanized handling and distribution of large numbers of eggs.
As the industry made huge investments in technology, fewer and fewer entities produced more and more of the eggs we eat. In 1987, AG MRC reports, there were 2,500 producers that kept at least 75,000 laying hens. Today, there are just 205, and these companies produce 95 percent of the eggs Americans eat. According to the USDA, there are 338 million laying hens in the United States. If 95 percent of them belong to just 205 egg producers, then the average egg producers keeps about 1.6 million hens. As someone who takes care of fewer than 20 laying hens, I can testify that just keeping 1.6 million of them alive would require breathtaking efficiency!
Of course, the very largest companies maintain many more birds than that. The largest of them all is Cal-Maine Foods. The company recently released an “Investor Report” that stands as one of the most revealing documents I’ve seen about the egg industry. To impress the investors, the report singles out a single $30 million facility in Texas with 1.67 million hens kept in nine laying houses, or 185,000 chickens in each house.
The report also offers a convenient list of the largest U.S. egg producers. Cal-Maine rules the roost, with its flock of 28 million hens. The two companies involved in the egg recall both crack Cal-Maine’s list of the top ten producers — Hillandale Farms, with its 14 million hens, comes in third, while DeCoster Egg Farms and its 9 million layers place ninth. All in all, the ten largest producers have 135 million hens — about 40 percent of the nation’s total flock of 338 million.
No one can say these mega-producers aren’t adept at keeping prices rock bottom. According to its Investor Report, Cal-Maine sells fully a third of its eggs to Walmart. I just got off the phone with the Walmart in Boone, N.C., near where I live. A carton of 18 eggs sells for $1.86 there — about a dime an egg. Walmart, with its vast fleet of trucks, highly rationalized inventory/storage system, and nationwide web of stores, is surely a highly efficient conduit for getting eggs from gigantic facilities to consumers.
But the egg recall is now exposing, yet again, the underside of maximum efficiency and regional concentration of the food system. Those fleets of trucks don’t just move millions of eggs from a handful of companies to hundreds of millions of consumers; they also, with stunning efficiency and breadth, move pathogens hatched in those very factory-scale facilities along with eggs.
It’s worth noting that the two firms embroiled in the recall, DeCoster and Hillandale, have more in common than the Iowa locations of their salmonella-tainted operations. “Hillandale Farms of Iowa and [Decoster-owned’] Wright County Egg Farm share a number of common suppliers because they are in the same industry in the same state,” Hillandale recently declared in a statement quoted by the New York Times. Indeed, “the company said that it bought young birds, called pullets, and feed from a company run by the DeCosters,” the Times reports.
That’s regional concentration in action: Budiansky’s ideal. The upside, if you see it that way, is 10-cent eggs. One of the many downsides is the rapid, wide spread of pathogens. Another is leaving the food system in the paws of a handful of companies whose products are so cheap that they can only make money by relentlessly slashing costs. To understand the repercussions of that kind of economic arrangement, see my post from last week about the DeCoster operations.