A fashionable egg --Poultry producers could gather more income with omega-3 ‘designer eggs’

The egg is back.

Derided for decades as a high-cholesterol artery clogger, egg consumption slid almost 50 percent from 1945 to 1991. Now eggs are gaining nutritionists’ respect and sales are climbing. The average American cracked open 250 eggs last year — over 70 billion total in the United States.

Three billion of those were “designer eggs” — pasteurized, low-cholesterol, cage-free — and now the hottest on the market: omega-3 enriched. At double the price of conventional eggs, poultry farmers hope omega-3 eggs catch on here as they have in Canada, where they have four percent of the market.

Six times the egg

“Four percent is a ton of eggs,” about 120 million in terms of Minnesota’s production, says Jerry Crawford, an AURI chemist in Marshall, Minn. Minnesota is the nation’s eighth-largest egg producer.

Crawford has analyzed eggs produced by the Southwest Minnesota Poultry Cooperative and confirmed they contain six times more omega-3s than typical eggs, are low in saturated fat and high in polyunsaturates. “Jerry’s work was invaluable,” says Ray Teeter, SMPC’s manager.

To meet label claims, the co-op’s 13 members have agreed to certain standards, including cage-free hens, chemical-free production and special feed.

A 10-percent flax blend in feed produces eggs with 350 mg of omega-3 fatty acids; a typical egg has 60 mg. There are no FDA recommendations on omega-3 consumption, but Canada recommends a daily average of 1100 mg for women and 1500 mg for men.

Oily acid studied

Omega-3 is a fatty acid found in cold-water fish such as salmon, herring and tuna and in vegetable oils such as flaxseed, linseed, soybean and canola. An AURI-sponsored market assessment cites studies of Alaskan Eskimos and Japanese fisherman that showed “increased consumption of omega-3 fatty acids can decrease the risk of heart disease by 50 to 70 percent. … These benefits are attributed to the natural blood-thinning ability of omega-3.”

The report also says omega-3s may improve the ratio of “good” (HDL) to “bad” (LDL) cholesterol in the blood, improve oxygen supply and brain function, and help relieve rheumatoid arthritis and inflammatory disorders.

On the downside, omega-3s have been linked to free radical production, which can cause cell damage, increase cancer risk and accelerate aging. Some egg producers fortify feed with vitamin E, an antioxidant that may neutralize free radicals.

AURI worked with Southwest State University marketing advisors to conduct the study, which was completed in December. Grain farmers as well as poultry producers have benefited from AURI’s work — both the nutritional and marketing analyses, says DeEtta Bilek of the Buckwheat Growers Association in Wadena, Minn., where SMPC purchases its feed. “We just couldn’t afford to buy that kind of research — and more is needed.”

$2 a dozen

Omega-3 eggs sell for around $2.50 per dozen in the Twin Cities and less in rural areas. Traditional egg prices can dip to 99 cents or less per dozen.

SMPC has been selling omega-3, free-range eggs for $1.60 per dozen wholesale, but wants to gradually increase that to $2. Members net an average of 20 cents a dozen in sales to southern Minnesota food co-ops and a few traditional groceries. Producers also sell directly to consumers, setting their own prices for individual sales.

So far, the markets are not huge; SMPC’s biggest outlet is a St. Peter food co-op that sells 40 to 45 dozen a week. But recently the co-op received a request for 90 dozen eggs a day from a metro suburban co-op. “We can’t meet that now,” Teeter says, but it is proof of market demand.

“Cooperatives need to have the volume to satisfy the market,” says Dennis Timmerman, AURI project director in Marshall. “The large producers will step in and take the omega-3 market if smaller producers can’t. Then the opportunity will be gone.”

Small co-ops like SMPC have two options. They can sell eggs to a distributor that already has a customer base for designer eggs and avoid the high cost of advertising, promotions and building brand recognition. Or members can reap higher profit and retain more control by selling eggs directly to consumers and retailers. “But that will require significant marketing to sell the public on the benefits of omega-3 eggs,” through coupons, brochures, free samples and media promotions, the market assessment states.

The co-op could also emphasize the eggs’ cage-free and organic elements, markets that are expanding every year. Exporting presents opportunities as well: consumers in Canada, Australia, Japan and England “are willing to pay a premium for omega-3 eggs,” according to the report. In 2001, Canada imported 19 million dozen eggs of all varieties, valued at $11.8 million.

Secrets of the feed

The buckwheat, field peas, flax and other feed grains SMPC buys are grown in Minnesota or North Dakota — the nation’s biggest flax supplier. Rich in lysine and other amino acids as well as omega-3s, the feed is reasonably priced, Bilek says. “People who compare our feed with their local store say there is not much difference (in price).” A 50-pound bag of conventional feed for hen layers (primarily a corn/soybean blend) sells for about $7, the organic buckwheat/flax blend sells for $7.75, and transitional feed is $7.25. Farmers who buy by the ton get a discount. However, transporting the feed from northern to southern Minnesota increases the cost.

Not all SMPC members use the same feed; those with homegrown certified grain mix a concentrate into their feed. But the nutritional result must be the same, says Teeter, whose job includes verifying that farmers meet co-op standards. “Basically, my job is to assist farmers in getting the right chickens, feed, management and to see to it that the quality is the same on all farms.”

Co-op members grade, candle and package their own eggs. Teeter, a sprightly 79, picks them up and travels throughout southern Minnesota selling eggs to co-ops and small grocers. A $125 annual fee charged to each member pays his salary.

Broilers not far behind

For SMPC, the chicken comes before the egg, as broilers are a bigger market. “There may be omega-3 in the meat, too, but we don’t have test results yet,” Teeter says. Since the birds are range-fed, they are raised only from May through September.

The co-op’s products include both organic and “transitional,” meaning the feed-grain production is pre-organic, in the second of a three-year chemical-free requirement. Contracted processing plants are also certified organic or in transition, including facilities in Hector, Browerville and Fairmont.

Natural broilers sell for about $1.65 per pound, certified organic for $2.40. Since they can be shipped frozen, SMPC sells broilers as far away as Grand Marais, Minn.

Both egg-laying and broiler chickens are raised without antibiotics and hormones, and the feed doesn’t contain GMOs or farm chemicals. “We’re raising chickens without all that crud,” Teeter says, adding that many consumers are becoming concerned about antibiotic-resistant bacteria in poultry. Price is yet a deterrent, however. “Out in farm country, they don’t like to pay $2 a pound for chicken.”

Producers are averaging about $1.50 net profit per broiler “over all expenses, including electricity, labor and all production costs,” Teeter says. The profit margins vary greatly from farmer to farmer, however. “One producer is netting over $4 per bird on 1,000 head — he’s been at it for a few years. Some are netting only a few cents per bird. We have to sit down and work out whether it’s lack of management or the feed or the water or what the trouble is — those hurdles have to be crossed by every producer.”

Teeter says the challenge is worth the effort because there is consumer interest in buying local, naturally-produced poultry and eggs. He is reminded of a seminar where he heard “the ‘tale of two chickens.’ One was traced back to Alabama — every step of the way (from hatch to market) was owned by one corporation.

“That’s what we’re trying to get away from. The basic idea is to service as near the local trade as possible — because people are beginning to wonder where their food is coming from.”