The February CPI report egg prices rose 59% year over year. So what's driving the rise in prices? How long will the higher prices last? Why do some eggs cost more than others? Pete & Gerry’s CEO Tom Flocco answers those questions and more in the video above.
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Our model, Pete and Jerry's and Nelly's are free-range pasture-raised eggs. We're on a distributed network of close to 300 farms and about 15 states across the country. Uh, and so we haven't had the same loss of of supply, uh, which is essentially hen count, uh, that's driving the price. So our price is the same today as it was a year ago, 18 months ago, going back to 2023 to the retailer. Uh, the the what the commodity folks are dealing with right now is just a dramatic reduction of the number of hens laying eggs today. It's 30 odd million birds have been taken out in the last about five weeks. Uh, roughly 50 million, which is close to 15% of the population, uh, over the course of the last two to two and a half months. All of that ties back to a bird flu strain today that is significantly more, um, uh, contagious than what we've seen in the past. And there's some estimates that the current bird flu is close to a thousand times more contagious to the birds, uh, than previous strains that we've had to deal with, which is why it's not going away. Uh, that in turn leads to a real challenge to be able to repopulate those 30 to 50 million birds depending on what time period you're looking at. You have to lay you have to lay the eggs, you have to those chicks have to grow into pullets and then turn into laying hens. That just takes time, and that's what we're trying to catch up with, or I should say we, but the folks in the commodity end of the business, cage and cage free are dealing with today.
That's remarkable in a few things that you mentioned. You said it's not going away. How does that translate through to prices long term?
Yeah, when I say not going away, I mean not going away anytime soon. So we the hope is that this is spread by migratory birds, so there is a chance that it starts to uh reintroduce itself in the migratory patterns in spring. Uh, it tends to then fall away in the summer months. So our hope is that as it starts to abate uh in terms of intensity, that we don't get the same number of um significant hits. And we haven't seen one, touch wood, to a to a commercial flock in in about three weeks. Uh, so we're hoping that we can turn that into four weeks and five. And that the the birds will start to repopulate. But you have to bring that layer supply. Normally call 330 million hens, about a hen for every person in the country. That number today is about 280 million, 290 million by best estimates. So they have a way to go on the cage and cage free side to be able to build that population back up. I don't expect it to be fixed anytime soon. Um, if you're asking for for any sort of a prediction, it's not something we're going to see go away uh overnight. It's going to take a little bit of time to build that supply back up.
What are you hearing and in in the pulse check of of wholesale partners or distributors that you work with or even some of your industry counterparts also work with?
So what we're hearing from retailers are frustrated. Retailers, uh, which is who we deal with mostly. We have some really good distributor partners as well, but we're dealing with both distributors and retailers. They want to be able to offer eggs at a reasonable price to their consumers. Um, now the good news is that that our eggs, Nelly's and and Pete and Jerry's, if we haven't taken price to our retailers, so they can offer that same price to consumers today. So they can offer a value on specialty eggs to the consumer. The challenges, I was in a store the other day, medium white cage cage-free eggs were $8.99. And our eggs were on the shelf at $6. Now, unfortunately, our eggs weren't on the shelf. They were we can't keep up with the with the demand. We're trying, we're doing our best to bring additional birds on supply, but the problem is once if our eggs are premium and they're $6 a dozen and they have better hen welfare standards, better better product as a result, consumers are going to just default to the premium eggs, which is why they're being sold out so quickly. And what you see in supply are those cage and cage-free eggs. I just want to remind everybody that a cage-free bird is not in fact getting outside. They are not sitting in cages, but they are they are kept inside of a barn. Free free-range birds, pasture-raised birds are getting access to the outdoors, which makes our model more expensive, but it also insulates it from some of the problems that you're seeing with that cage and cage-free supply model.
