An Eggspensive Dilemma

Summary

Summary of "An Eggspensive Dilemma" – The Journal Podcast

Podcast Information:

• Title: The Journal
• Host/Author: The Wall Street Journal & Gimlet
• Description: The most important stories about money, business, and power. Hosted by Kate Linebaugh and Ryan Knutson, with Jessica Mendoza. The Journal is a co-production of Spotify and The Wall Street Journal.
• Episode: An Eggspensive Dilemma
• Release Date: February 25, 2025

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Introduction: The Heartbeat of American Breakfast

The episode opens at RVA Cafe in Richmond, Virginia, where owner Daquan Woodbury emphasizes the central role eggs play in his restaurant’s menu. Jessica Mendoza introduces the scenario:

[00:05] Jessica Mendoza: "At the RVA Cafe in Richmond, Virginia, omelet pans are popping. In the kitchen, Daquan Woodbury is cracking, frying and whisking eggs. Lots and lots of eggs."

Daquan elaborates on the ubiquitous presence of eggs in American breakfasts:

[00:20] Daquan Woodbury: "I mean, it's the basis of American breakfast, right? So I mean, everything comes with eggs and even things that you don't realize comes with eggs, right? Cause you'll say chicken and waffles and everybody's okay, well, you don't really think about eggs in that."

Eggs: The Backbone of Brunch and Breakfast Chains

Daquan highlights various menu items that rely heavily on eggs, revealing the staggering volume of egg usage:

[01:04] Jessica Mendoza: "Put another way, Daquon's Brunch Cafe runs on eggs, eggs, eggs, eggs."

[01:09] Daquan Woodbury: "Eggs and more eggs. Yeah, just on a good, good week, we're cracking at least 3,000 eggs. 3,000 eggs. And maybe up from there."

Rising Egg Prices: A Threat to the Business

Jessica Mendoza introduces the central dilemma faced by Daquan and many others in the food industry: soaring egg prices.

[01:19] Jessica Mendoza: "But in the last few months, Da Kwon's reliance on eggs has become a grade A problem for his business. The average cost of a dozen eggs has jumped to historic levels."

Daquan expresses the shock and challenge posed by the price hike:

[01:48] Daquan Woodbury: "Even taking it back to like the beginning of last year... our normal case of 15 dozen eggs was generally somewhere around 40ish dollars. Right now that same case is $200."

Egg Consumption in America: Insights from Patrick Thomas

Patrick Thomas, The Journal’s resident eggspert, provides statistical context on American egg consumption:

[03:31] Patrick Thomas: "Eggs are just so ubiquitous. That's what's for breakfast, right? Like, Americans generally have about 279 eggs a year, so about six a week."

He discusses eggs' position in the protein hierarchy and their affordability during economic downturns:

[03:47] Patrick Thomas: "When we're in a depression, a recession, people tend to go buy eggs because it was even cheaper than chicken when times were really hard."

Bird Flu Outbreak: The Culprit Behind High Egg Prices

The primary reason for the skyrocketing egg prices is the resurgence of the bird flu, significantly impacting egg production.

[04:31] Patrick Thomas: "The number one reason is the bird flu outbreak."

Jessica details the severity of the outbreak:

[04:34] Jessica Mendoza: "Bird flu cases soaring once again in the US... avian flu has been confirmed in 146 flocks in the past month, affecting more than 20 million birds."

Preventative measures and government support are discussed, but the main strategy remains culling infected flocks:

[05:11] Patrick Thomas: "Once it is confirmed in a flock, you just kill the whole flock. So when one barn gets infected, you might be putting down 4 million hens at a time."

Economic and Supply Chain Impact

The extensive culling of birds has devastated the egg supply chain. Patrick provides alarming figures:

[06:50] Patrick Thomas: "In this particular outbreak, it's about 160 million commercial chickens and turkeys. Just chickens. It's over 120 million egg laying hens."

This massive reduction in egg-laying hens directly correlates with the soaring egg prices observed nationwide.

Consumer Behavior: Demand Remains Steady Despite High Prices

Surprisingly, high egg prices have not significantly dampened consumer demand. Patrick explains the scarcity of substitutes:

[07:37] Jessica Mendoza: "I asked Daquon, the cafe owner in Richmond, about the possibility of eggless brunch."

[07:56] Daquan Woodbury: "Yeah, it's like you say that, but then what are you substitute for eggs?"

Even with price surges, consumers continue to prioritize eggs in their diets, limiting the effectiveness of price-driven demand reduction.

Business Strategies: Adaptation to Rising Costs

In response to the increased costs, businesses like Daquan’s cafe have implemented price adjustments:

[08:09] Daquan Woodbury: "So recently we've gone up about a dollar on each of our menu items. That includes eggs."

Despite price hikes, the demand for egg-based dishes persists:

[08:26] Jessica Mendoza: "People still want eggs for their breakfast."

Potential Solutions: Vaccination as a Controversial Option

Patrick introduces the idea of vaccinating poultry as a solution to curb the bird flu outbreak:

[08:50] Jessica Mendoza: "One fix Patrick says could be something that the poultry industry has refused to consider for a long time."

[09:01] Patrick Thomas: "They have not tried to vaccinate the birds for bird flu."

However, vaccination faces significant hurdles:

• Logistical Challenges: Vaccinating 300 million hens is a daunting task, especially in cage-free or pasture-raised operations.

  [09:47] Patrick Thomas: "...you're going to literally have to chase the chicken in some of those barns."

• Economic Concerns: Vaccination could jeopardize the $5 billion U.S. broiler chicken market due to international trade implications.

  [10:13] Patrick Thomas: "...all of the other countries that import poultry products from the US would have to sign off on our vaccination STR strategy."

[10:52] Patrick Thomas: "The general fear is that vaccines do not completely prevent infection and could mask the disease's presence."

Industry Split: Egg Producers vs. Broiler Chicken Industry

A divide emerges within the poultry industry regarding vaccination:

[11:06] Jessica Mendoza: "...the egg industry is getting desperate. Many want to vaccinate the flocks and it's put them at odds with the broiler industry."

[12:08] Patrick Thomas: "There's a split in the poultry industry, yes, over vaccinations."

Egg producers, facing existential threats from bird flu, are more open to vaccination, whereas the broiler chicken sector prioritizes export markets and fears the implications of vaccination protocols.

Government Response: Conditional Vaccine Licensing

The Trump administration signals a potential shift from culling to vaccination strategies. A conditional license for vaccine production has been issued by the USDA:

[12:35] Jessica Mendoza: "The Agriculture Department has issued a conditional license to a company to produce a vaccine for chickens."

However, practical implementation remains uncertain:

[13:25] Jessica Mendoza: "...the vaccine hasn't been authorized for use on farms, and poultry producers can't buy it."

Patrick notes the unexpected momentum behind vaccination:

[13:54] Patrick Thomas: "I did not think we were going to get here two years ago. ... we are closer than ever to vaccination."

Future Outlook: Adapting to an Egg-Scarce Economy

With the persistent bird flu outbreak and high egg prices, businesses like Daquan’s cafe contemplate rebranding and diversifying their menus:

[14:46] Daquan Woodbury: "...maybe our star isn't breakfast anymore... Can we rebrand ourselves into something that's like, hey, you can get an egg sandwich, but you don't have to?"

This reflects a broader existential crisis within the American breakfast landscape, as traditional egg-centric menus face challenges.

Conclusion: Navigating an Uncertain Future

The episode concludes with Daquan expressing hope for relief and solutions to the egg crisis:

[15:40] Daquan Woodbury: "I look forward to expectations that the prices will go down."

Jessica Mendoza wraps up by highlighting the ongoing struggle for both consumers and businesses to adapt to the unprecedented rise in egg prices, emphasizing the critical need for effective solutions to stabilize the market.

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Key Takeaways:

• Egg Prices Soar: Driven primarily by a severe bird flu outbreak affecting millions of egg-laying hens.
• Industry Impact: Restaurants and breakfast chains face higher costs, leading to price hikes and potential menu rebranding.
• Consumer Behavior: Despite high prices, demand for eggs remains strong due to a lack of viable substitutes.
• Potential Solutions: Vaccinating poultry presents a controversial but increasingly considered option amidst industry splits.
• Government Role: Conditional vaccine licensing indicates a possible shift in handling the outbreak, though practical application remains complex.
• Future Implications: The American breakfast industry stands at a crossroads, grappling with sustainability and economic viability in the face of ongoing challenges.

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Notable Quotes:

• Daquan Woodbury [00:20]: "It's the basis of American breakfast...everything comes with eggs."
• Patrick Thomas [03:31]: "Eggs are just so ubiquitous...Americans generally have about 279 eggs a year."
• Daquan Woodbury [01:48]: "Our normal case of 15 dozen eggs was generally somewhere around 40ish dollars. Right now that same case is $200."
• Patrick Thomas [08:50]: "They have not tried to vaccinate the birds for bird flu."
• Patrick Thomas [13:54]: "There’s a lot of nuance to it, but we are closer than ever to vaccination."

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This comprehensive summary captures the multifaceted issues surrounding the skyrocketing egg prices in the United States, delving into economic impacts, industry responses, and potential solutions amidst an ongoing bird flu crisis.

Transcript

[Jessica Mendoza]

At the RVA Cafe in Richmond, Virginia, omelet pans are popping. In the kitchen, Daquan Woodbury is cracking, frying and whisking eggs. Lots and lots of eggs.

[Daquan Woodbury]

I mean, it's the basis of American breakfast, right? So I mean, everything comes with eggs and even things that you don't realize comes with eggs, right? Cause you'll say chicken and waffles and everybody' okay, well, you don't really think about eggs in that.

[Jessica Mendoza]

Eggs are also in Daquon's pancake batter, his banana nut muffins, they're in the egg wash, the breakfast sandwiches, the signature scramble. Can you actually list off the things that might contain eggs on your menu?

[Daquan Woodbury]

Our good morning, which is our simple eggs meat toast. You have the hangry breakfast. That's a big breakfast that comes with eggs. And then somebody else ordered an omelet. So right there, that's eight eggs on one ticket. So it'.

[Jessica Mendoza]

Put another way, Daquon's Brunch Cafe runs on eggs, eggs, eggs, eggs.

[Daquan Woodbury]

Eggs and more eggs. Yeah, just on a good, good week, we're cracking at least 3,000 eggs. 3,000 eggs. And maybe up from there.

[Jessica Mendoza]

But in the last few months, Da Kwon's reliance on eggs has become a grade A problem for his business. The average cost of a dozen eggs has jumped to historic levels.

[Daquan Woodbury]

Even taking it back to like the beginning of last year. So just a quick 12 months ago. Right. You know, I would say our normal case of 15 dozen eggs was generally somewhere around 40ish dollars. Right now that same case is $200.

[Jessica Mendoza]

Wait, what?

[Daquan Woodbury]

Yeah, right.

[Jessica Mendoza]

$200.

[Daquan Woodbury]

$200. And you're looking at it and you're like, so what do you do?

[Jessica Mendoza]

Wel. Our show about money, business and power. I'm Jessica Mendoza. It's Tuesday, February 25th. Coming up on the show, cracking the conundrum of egg prices.

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[Jessica Mendoza]

To quote an Iconic ad from the American Egg Board. I love eggs. I love eggs from my head down to my legs. I will take them scrambled, sunny side up, poached. I just love them, just like so many Americans do.

[Daquan Woodbury]

Ooh, you gotta love it. The incredible edible egg.

[Jessica Mendoza]

Here's the Journal's resident evil eggspert, Patrick Thomas. How much do Americans love eggs, Patrick?

[Patrick Thomas]

Eggs are just so ubiquitous. That's what's for breakfast, right? Like, Americans generally have about 279 eggs a year, so about six a week.

[Jessica Mendoza]

The humble egg occupies a dependable rung on what Patrick calls the protein ladder.

[Patrick Thomas]

Steak is always the most expensive, followed by pork, which has always kind of had its weird middle ground between chicken and beef. Chicken is always the cheaper of those meats. And then you have eggs, which loves to fancy itself as the cheapest protein. When we're in a depression, a recession, people tend to go buy eggs because it was even cheaper than chicken when times were really hard.

[Jessica Mendoza]

But right now, egg prices at stores across the country are sky high. According to US government data, a dozen eggs cost an average of $5 these days. And in some places, it's even higher. Last year, eggs averaged at about $3 a dozen. So what's the one big reason that eggs have gotten so expensive?

[Patrick Thomas]

The number one reason is the bird flu outbreak.

[Jessica Mendoza]

Bird flu cases soaring once again in the US to make matters worse, a new strain of the virus has been detected in California. According to the USDA, avian flu has been confirmed in 146 flocks in the past month, affecting more than 20 million birds. The virus mostly spreads through contact with infected wild birds and their droppings. Farmers have installed things like lasers and sound cannons to keep the wild birds away from their chickens. And the government has provided more than a billion dollars in support. But once the virus does infect a chicken farm, there's been one main strategy for controlling the outbreak.

[Patrick Thomas]

Once it is confirmed in a flock, you just kill the whole flock. So when one barn gets infected, you might be putting down 4 million hens at a.

[Jessica Mendoza]

That's so many.

[Patrick Thomas]

Yeah, it's. It's a lot. It has just been absolutely devastating for egg farmers, producers, the whole supply chain over really, since the start of 2022 is when we first started hearing about it pop up again. But it just. It has not gone away. There's little signs that it is going to go anywhere now.

[Jessica Mendoza]

There's a growing sense that in the US the outbreak has gotten out of control. The virus has started jumping to other species.

[Patrick Thomas]

Five more possible cases of the bird flu in cats.

[Jessica Mendoza]

The contagious virus has infected hundreds of dairy herds this year.

[Patrick Thomas]

Right now it is not spreading human to human, thank goodness. Right now it's not killing a lot of people, thank goodness. But those are two things that can change on a dime.

[Jessica Mendoza]

As of January, there have been nearly 70 confirmed human cases of bird flu in the United States. And a patient admitted to a hospital in Louisiana became the first US death from the virus. But the Centers for Disease Control and Prevention says that the current public health risk is low. The patient who died was elderly and had underlying medical conditions. And most of those who were infected worked on poultry or dairy farms. The CDC says it's watching the situation carefully and working with states to monitor people with animal exposure. The persistence of this outbreak has meant that farmers have had to wipe out flock after flock of birds. Do we know how many chickens have been culled or put down?

[Patrick Thomas]

In this particular outbreak, it's about 160 million commercial chickens and turkeys. Just chickens. It's over 120 million egg laying hens.

[Jessica Mendoza]

And wiping out millions of egg laying hens means a lot fewer eggs, which is how we get those higher prices. Has that high price affected demand?

[Patrick Thomas]

The funny thing is not really. Consumers have always just kept buying eggs. It's just, think about it. There's not that many things you can just substitute for. There's not another ingredient that comes to mind. There's some other products or fake egg products, but they tend to be a little bit pricier. There's just no good substitute for eggs.

[Jessica Mendoza]

I asked Daquon, the cafe owner in Richmond, about the possibility of eggless brunch. Have you thought about, I don't know, making food without eggs or finding some kind of substitute for it?

[Daquan Woodbury]

Yeah, it's like you say that, but then what are you substitute for eggs?

[Jessica Mendoza]

And Daquon's customers still want their omelets and French toast. That's why he's had to make a tough decision. Something breakfast chains like Waffle House and Denny's have also done tack on an egg surcharge.

[Daquan Woodbury]

Yeah, so recently we've gone up about a dollar on each of our menu items. That includes eggs. And the demand is always going to be there. So we've increased our prices, but that doesn't stop people from buying it necessarily. Right. So they still want it.

[Jessica Mendoza]

People still want eggs for their breakfast.

[Patrick Thomas]

Yes.

[Daquan Woodbury]

It just is what it is.

[Jessica Mendoza]

What are you hoping for in this situation?

[Daquan Woodbury]

Just general relief, a plan. I feel like in a general sense we're getting educated on why the egg prices are what they are. But okay, how are we going to solve it? What's the fix?

[Jessica Mendoza]

One fix Patrick says could be something that the poultry industry has refused to consider for a long time.

[Patrick Thomas]

And there is something out there that they haven't tried.

[Jessica Mendoza]

What's that?

[Patrick Thomas]

They have not tried to vaccinate the birds for bird flu.

[Jessica Mendoza]

Why not? That's after the break. One possible solution to the rapidly spreading bird flu is a vaccine for poultry. But that idea has faced a lot of opposition for years, and there's two main reasons why. First, it's a logistical nightmare. Considering there are 300 million egg laying hens in the U.S. what does a mass vaccination of chickens even look like for 300 million chickens?

[Patrick Thomas]

Well, especially if you're a cage free operation or a pasture raised egg operation, you're going to literally have to chase the chicken in some of those barns. So, you know, it's more complicated than I think some people think we can flip a switch and just vaccinate.

[Jessica Mendoza]

The bigger concern, though, is that a chicken vaccination program could jeopardize America's $5 billion market for broiler chickens or chicken meat.

[Patrick Thomas]

The reasoning is a bit complex, but it boils down to this, and that's that all of the other countries that import poultry products from the US Would have to sign off on our vaccination STR strategy. So they would have to approve the vaccine we're using, how we are surveilling the birds after it is administered, all of those different types of nuances of vaccinating an animal, and essentially we'd individually have to go to the more than 150 trading partners of the United States to do such a thing?

[Jessica Mendoza]

Why wouldn't other countries just embrace the idea of US Vaccinated chickens or chicken products? Like, what's the issue there?

[Patrick Thomas]

The general fear is that vaccines do not completely prevent infection and could mask the disease's presence. So it's always a safety concern of whether we're bringing the virus into their country.

[Jessica Mendoza]

But these concerns affect one part of the poultry industry more than the other because there are two camps in the chicken the egg people and the broiler chicken people. For a long time, these two camps were on the same page. In 2022, they were telling Pat that any plan to vaccinate chickens would never fly. But today, egg producers are getting desperate. Many want to vaccinate the flocks and it's put them at odds with the broiler industry.

[Patrick Thomas]

The egg industry has really changed their Tune just it has been a breaking point for them. They say it would basically be more worth it to vaccinate their flocks and not have to worry about infection than lose out on their exports. So the egg industry is willing to bite the bullet on that. But the broiler chicken industry, the Tyson Foods, Purdue Farms, Pilgrim's Pride, those guys are not willing to lose out on exports because that is a huge deal to their bottom line to have that market.

[Jessica Mendoza]

So there's like a split in the poultry industry over vaccinations?

[Patrick Thomas]

There's a split in the poultry industry, yes, over vaccinations.

[Jessica Mendoza]

And this is giving rise to a new debate when it comes to vaccines, which industry should come first, the chickens or the eggs? And then earlier this month, the Trump administration signaled it might move away from culling and towards vaccines.

[Patrick Thomas]

And tonight, there's a new approach to fight the bird flu, and it's being considered by the US Department of Agriculture.

[Kevin Hassett]

The Agriculture Department has issued a conditional.

[Jessica Mendoza]

License to a company to produce a vaccine for chickens. Shortly after the head of President Trump's economic council talked about solving the egg shortage. Here's Kevin Hassett on CBS's Face.

[Patrick Thomas]

Just went to the grocery store. I shop for our family in parks. I love to look at prices. And there were no eggs at the store yesterday, just a few. So Kevin Hassett said that essentially that the administration wanted to find new ways to address the bird flu outbreak. And so what we need to do is have better ways with biosecurity and medication and so on. So by Medicaid, I think everybody assumed he meant vaccination. Like there's no Tamiflu for birds here in this situation. But we don't really know what the they're talking about yet.

[Jessica Mendoza]

And to be clear, even the USDA's conditional approval for a vaccine doesn't mean there are plans to administer doses yet. The vaccine hasn't been authorized for use on farms, and poultry producers can't buy it. The Trump administration says it's committed to safeguarding poultry farms and keeping egg prices affordable. And the USDA plans to roll out a strategy in the coming days. Caveats aside, Patrick says vaccination has more momentum than he's ever seen, with many in the egg industry behind it.

[Patrick Thomas]

I will be perfectly frank. I did not think we were going to get here two years ago. So the fact that we are talking about it is pretty remarkable. Two years ago, at least when I was talking to people, they're like, you know, people toss it out. It was really talked about as like, unfathomable that we would actually reach the point of vaccinating layer hens. And now it's like, nope, we got to do it. There's a lot of nuance to it, but we are closer than ever to vaccination.

[Jessica Mendoza]

Still, until there's a way to curb this bird flu outbreak or get cheaper eggs from elsewhere, Americans may just have to keep shelling out for pricey eggs. Back in Richmond, Virginia, Daquan Woodbury is thinking about how he's going to deal with these higher prices as time goes on. And he's considering a whole new dining concept.

[Daquan Woodbury]

Maybe our star isn't breakfast anymore, right? So it's like, well, is. Is that where we go? You know, do we lean more on the coffee? You know, coffee is kind of a side gig for us, but our brand is breakfast. Do we start saying, hey, can we rebrand ourselves into something that's like, hey, you can get an egg sandwich, but you don't have to to? Maybe our culture now doesn't eat eggs as much?

[Jessica Mendoza]

The way Daquon is talking, it's like the American breakfast itself is now at a crossroads. Call it an existential crisis. I don't like this future that you're painting for us. That is a dark. I love eggs. Da Kwon, thank you so much for taking the time to chat with us.

[Daquan Woodbury]

Thank you. I appreciate you guys having me, and I. I look forward to expectations that the prices will go down. Right.

[Jessica Mendoza]

That'S all for today. Tuesday, February 25th. The Journal is a co production of Spotify and the Wall Street Journal. If you like our show, follow us on Spotify or wherever you get your podcasts. We're out every weekday afternoon. Thanks for listening. See you tomorrow.