Egg farmers base million-dollar investment on consumer demand for premium eggs

Sunday, June 7, 2015

For producers like the Eisses family of Simcoe County, consumer preference for eggs from animal-friendly environments is driving their investments in state-of-the-art colony systems. And major clients like A&W like the concept, too

by MIKE BEAUDIN

When Harry Eisses built his first egg barn 23 years ago, his customers had no interest in the cages he used to house his 23,000 hens. Times have changed.

Today, Eisses and other egg farmers are basing million-dollar business plans on consumer demands for eggs from hens housed in what they perceive as more animal-friendly environments.

Last year, when Eisses and his family developed plans for a new egg barn at their Simcoe County farm, the discussion focused primarily on what type of cage to use or whether to abandon cages all together.

With that in mind, Eisses and son-in-law Jeff Wohlgemuth invested between $2.5 million and $3 million in a state-of-the-art colony system that allows their 45,000 birds to live in larger cages with amenities such as perches, nesting boxes and scratching areas. They also installed a manure-drying process, which they believe is the first of its kind in Canada and which eliminates the stench and flies of their old liquid manure.

Eisses Farm Ltd. is investing in an agriculture sector that has been growing steadily. Statistics Canada says egg consumption in Canada dropped from 1980 to 1995, but has been on the rise ever since. Canadians on average have been consuming three per cent more eggs every year for the past eight years.

But they're demanding more than just conventional eggs. They also want a say in how the hens live, what they're fed and the type of eggs produced. Consumers now have a choice between conventional eggs, Omega-3 eggs, cage-free eggs, free-run eggs, free-range eggs, organic eggs and colony eggs.

"It's great to be part of a growth industry, but it's really changing," says Eisses, who is also a councillor on Egg Farmers of Ontario. "When I first started back in 1989, there were (four) types of eggs – small, medium and large and maybe extra-large. Now there's a whole selection out there."

Production systems have also changed dramatically. Although most eggs in Ontario are still produced by hens in conventional cages, there are now four common options – the conventional system with cages on top of each other in rows; enriched colonies that give the birds more room and amenities in their cages; free-run housing, where hens roam freely and where birds are furnished with nests and perches; and free-range where hens can go outside, weather permitting.

Consumers are also willing to pay a premium for eggs, depending on which system they're produced under. Eisses Farms Ltd. hens consume only vegetarian feed. Eggs are sold by Burnbrae Farms under the Nature's Best Brand for about $1 more than conventional eggs.

A&W also purchases most of the Eisses Farm eggs through Burnbrae. On its website, the fast-food restaurant chain says their customers have told them they prefer eggs fed a vegetarian diet without any animal byproducts.

"When we first started up, A&W came out and inspected everything," says Wohlgemuth. "They made sure everything was up to their standard and then gave the go-ahead. When we first planned the barn, we didn't know about A&W. We got a bonus there."

The A&W connection is exactly what Eisses Farm Ltd. was looking for when they decided to invest millions in the new 64-by-494-foot barn designed by Germany-based company Big Dutchman. Their vision is based on the belief that, as the egg market continues to grow, so will the demand for their premium eggs.

In fact, they're banking on the additional profit to make the business plan work. The new fully automated and climate-controlled system adds about 15 per cent to their operating costs, offset only somewhat by a 1.5 per cent increase in productivity, which Eisses attributes to more contented birds. The new barn can also house more hens in the future.

The manure drying system is also an add-on they choose after visiting a huge egg barn in the United States and noticing there was almost no smell. The manure dryer uses the barn's natural ventilation by exhausting the heat from the birds out of the barn, drawing in fresh air and using the exhaust air to pass through the manure. The dry manure runs over a series of belts into a pit. It is then used as fertilizer for the corn and soybean crops produced on the family's adjoining 2,800-acre farm.

"We can't calculate a buyback for the new barn over X number of years. It's too soon," says Eisses. "We could have stayed longer in the old barn, but we wanted to be ahead of the industry." BF