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News and analysis on the global poultry
and animal feed industries.
on September 14, 2007

Boom continues for non-confined laying systems

Production of eggs from non-confined (NC) flocks has increased rapidly in the United States during the past 5 years.

It is estimated that approximately 15 million NC hens are now producing either conventional or organic product. Eggs are marketed as specialty brands based on housing system, all vegetable diets, and nutrient enrichment.

Although specialty eggs generate a premium over generics, additional costs are incurred in production and for the efforts expended in attaining high standards of quality. Production of eggs from NC systems is now undertaken by the nation's largest egg producers and volume, increasingly derived from commercial operations, is no longer confined to small-scale family farms.

Due to the consumer demand for eggs from NC flocks, product is now offered in upscale gourmet and boutique grocery outlets as well as mainstream supermarkets and club stores.

Currently four alternatives are used to house non-confined egg production flocks:

Conversion of surplus or obsolete broiler breeder houses, especially in the Southeast and the Mid-Atlantic states.

Installation of floor systems in existing houses following removal of old unserviceable cages.

Erection of new units incorporating conventional floor systems with mechanical egg collection, usually undertaken by owners of large enterprises.

Establishment of new units equipped with sophisticated aviary installations. Logistic and capital cost considerations usually require direct company ownership.

Considerations for Non-Confined Flocks

At the present time, maintaining an adequate supply of eggs from NC flocks to balance demand from the marketplace results in instances where producers may compromise on housing and equipment. This will adversely affect quality or even food safety and is contrary to establishing an acceptable image for a brand.

Most small NC flocks, especially those housed in converted broiler breeder units, are owned and operated by contractors. This requires product to be held on farms and transported to plants for off-line processing. With the advent of aviary systems, which offer high stocking density relative to floor area, it is possible to develop operations that offer the cost advantages, quality and ease of management associated with conventional in-line cage complexes.

The most important determinants in the design of housing and selection of equipment include return on investment, labor efficiency, quality of product, and flock welfare. In the case of organic production, compliance with the rules of the National Organic Program requires certification of facilities and procedures by an approved agency, placement of organic pullets and purchase or mixing of feed containing only certified organic ingredients.

High Initial Capital Cost

Aviary systems developed in Europe during the late 1980s, are compatible with an in-line configuration. The relatively high initial capital cost, which is offset in part by high density relative to floor area, makes this system attractive to existing integrators expanding into specialty egg production. It is estimated that a unit holding 25,000 hens would incur an expenditure of $300,000 for mechanical installations, feeders, watering system, mechanical nests, conveyors, and ventilation.

The additional cost for the house might range from $100,000 to $200,000 depending on configuration, construction materials, services, and insulation. The capital cost per hen housed could extend from $16 to $20 depending on selection of equipment and the design of the facility. Assuming depreciation of the building at 10 percent per annum, and 15 percent on mechanical equipment, interest at 5 percent and allowing provisions for maintenance, the annual fixed cost component of production would approach $90,000 representing a value of 12 to 14 cents per dozen at 80 percent flock production.

The cost of a retrofitted nest installation, lighting, feeders, slats and other upgrades in a suitable existing building would be in the region of $75,000 for a flock of 9,000 to 10,000 hens. In the case of the conversion the annual fixed cost would be approximately $20,000 representing 8 to 10 cents per dozen. If units are established at a distance from the plant, additional costs would be incurred for transport and breakage in transit.

Loss Problems

Extensive losses may occur in NC units as a result of extensive soiling of eggs, especially in units with insufficient or poorly designed nests and slats leading into nests. Laying on litter or slats may become a consistent problem in some NC units resulting in additional labor costs for manual collection, decreased yield from shell damage and direct loss of eggs into the pits.

General Considerations

Replacement pullets for NC systems should generally be raised on either litter or slats using feeding and watering installations similar to those installed in laying operations. This avoids problems of adjustment when flocks are transferred to laying houses. Incompatibility of rearing and feeding systems may be reflected in post-transfer mortality due to dehydration, injuries from competition and weight loss due to inability to adapt to a new feeding system. As with the caged flocks, optimal uniformity and live weight consistent with strain standard is critical to attaining standard production and persistence.

Prompt removal of floor eggs from slats and litter during the four weeks following the onset of production will reduce the persistence of the problem and contribute to gathering a high proportion of eggs with clean shells. The additional labor required is a worthwhile investment as contractors and processors benefit from higher yield of saleable eggs.

As the demand for egg from NC flocks increases, more aviary and retrofit installations will be purchased. Conversion of old broiler breeder houses may continue in the Southeast and the Mid-Atlantic States, but the deficiencies of these units and the fact that they are operated by small-scale contractors will generally disfavor this approach to expansion. Over the long term, NC eggs will be supplied from company-owned facilities operated as in-line operations offering economies of scale.

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