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Should egg producers worry about Beyond Eggs?

Written July 11, 2013
Egg Production

Earlier this summer National Public Radio ran a story on Beyond Eggs, a formulated vegan substitute for eggs in baked and processed foods. Beyond Eggs is a dry product made from sorghum, peas and some other ingredients. There are other egg substitutes for inclusion in processed products on the market, and items like egg-less mayonnaise substitutes have been around for years.

Food costs going up

For decades the inflation-adjusted cost of producing eggs declined. Genetic improvements, better housing and equipment, better nutrition and better disease control all have contributed to improved bird performance and made the cost of producing eggs increase at a slower rate than the cost of goods in general. But eggs are no longer getting cheaper to produce. Biofuels policies in the U.S. and EU have driven up the cost of feeding poultry, and it now appears that $5.00 per bushel corn may be the “new normal” in the same way $2.50 per bushel used to be “normal.”

While the future of the Egg Bill is uncertain, it is a sure bet that the capital cost of keeping hens in the U.S. is going to go up. Whether in aviaries, in enriched colonies or on range, it will cost more dollars per hen to “house” them. Europe provides a chilling example of what could happen to the cost of producing eggs if a cage-free future is in store for the U.S.

Substitution is inevitable

Some consumers are willing to pay a premium for hens raised outside of traditional cages, but many others will not. Some consumers will still want to be able to crack open an egg when baking a cake, making pancakes or when beating eggs for an omelet, even if it costs more money, but some others will not. My guess is that if egg substitutes are developed that are less expensive than eggs and offer the functional properties of eggs for a given application, say for baking or inclusion in processed products, markets will develop and grow for these substitutes.

Competition from egg substitutes is a good way of reminding egg producers that people don’t have to eat eggs; they have choices. Eggs are consumed at current rates because of a number of factors like price, nutrition, habit, disposable income and marketing. If eggs cost more money to produce, then this changes the equation, and all other things being equal, fewer eggs will be consumed. I think that vegetable-based egg substitutes provide a long-term challenge to eggs because of dollars, not greenhouse gas emissions.

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