Dakota Layers, owned by local farmers and other investors in the Flandreau, S.D., area, is expanding. however, it’s not just an ordinary growth project.
The 60-employee company, which produces 800,000 eggs daily from almost 1 million hens in five barns, is adding its sixth and biggest barn complex yet, but this one will be different in the fast-changing egg industry.
Instead of cages, the barn will contain two flocks that will be housed in colonies – instead of 67-square-inch cages.
Colonies are still cages but are a response to animal activists and consumers concerned about treatment of the hens. the colonies will hold 60 to 80 birds, with room for hens to nest, scratch and roost on perches.
The first flock will move into the new facility in late October, with the second in January, adding 344,000 birds to the operation.
“It’s driven by the consumers wanting birds to be in a more natural habitat, versus traditional cages,” president and CEO Scott Ramsdell said.
Ramsdell said the 10-year-old company has been producing a safe, high-quality egg – something the company and others in the egg industry have worked hard to develop in the past years – but the next step seemed like it should be doing something for the birds, bringing them into a nicer, more natural environment.
With the colony-based addition, Ramsdell said it seems like the right thing to do.
“Will it increase productivity? I doubt it. but can we feel better at night knowing that we gave the bird a little better habitat? Yes, I think so,” he said.
Studies are under way to see whether the colony will increase productivity.
Nonetheless, Ramsdell said, “We look at what the consumer wants, and we want to make sure we meet the needs of the consumers.”
Egg prices will go up, however, Ramsdell predicted.
He said the colony-based operation probably will add about 2 cents per egg at the retail level.
That doesn’t seem like a lot, but “when you have millions and millions of eggs, that’s quite a bit more money.”
At the least, the company is joining others in developing “a new standard.”‘
Consumers, he said, are asking not only for “cage-free” eggs, but also organic, fertile, pasteurized and free-range eggs.
The free range is something a large company probably will avoid, Ramsdell said, because of the large amount of land it would take.
However, Dakota Layers is working on another “exciting” project with South Dakota State University to create a consortium of free-range growers in South Dakota and California.
Ramsdell said growers, who often have from 50 to 500 free-range layers, are having a difficult time finding where to market them.
He said Dakota Layers, which has a distribution center in Santa Maria, Calif., too, would take the eggs and market them with the name of the grower on them. A story about the free-range grower would be included in each egg carton, another benefit to not only the consumer but the grower.
“If you go out in the country, you’d be surprised how many have birds. Lots of consumers think it’s a better egg, but with a bird eating bugs, worms … it certainly doesn’t seem as nutritious as ours with our balanced diet, but we want to meet the demand,” Ramsdell said.
It’s definitely a special clientele, he said, with the cost of a dozen free-range eggs at $6 to $12.
Ramsdell said a group of four SDSU students is meeting with growers and grocery stores, and the interest in the plan so far has been “pretty good.”
The SDSU team and others are making a trip to California to meet with growers to further the idea of a cooperative association.
Ramsdell has had a few interesting conversations with free-range growers already. he talked with two women in California who were asked where the birds stay at night. They replied, “in the trees.” why? “To stay away from the coyotes.”
So wouldn’t a bird be better off in one of the new colonies?
“If I was a bird, I think I would rather be in a colony than sitting out on the range being ate by some coyote,” Ramsdell said. “But consumers want free-range birds, and if that’s what some of them want, that’s what we will give them.”
While work on the free-range consortium and colony addition advances, Ramsdell said Dakota Layers also is planning to double cage sizes in other barns during the next few years to one bird per 116-square-inch cage.
Most of Dakota Layers eggs take a two-day trip to California, where a voter-approved proposition will take effect on Dec. 1, 2015, requiring any egg sold in the state to come from a chicken with at least that size of cage.
It’s about double the size of current cages and will require a lot of work in the Dakota Layers barns as cages are replaced and birds thrown out.
“We’d love to sell more eggs locally,” Ramsdell said. however, with grocers such as Hy-Vee and Wal-Mart Stores Inc. becoming such large entities, it’s difficult to work out agreements, he said.
The 800,000 eggs produced daily in Flandreau, would be too many for South Dakota, anyway, with its population of 824,000.
The South Dakota eggs are often fresher when they arrive in California than from producers there, Ramsdell said. once the eggs are laid here, they roll onto the conveyors, are cleaned, packaged and put on trucks.
Ramsdell said most California producers pack their own eggs and take them to a processor, a system that often takes up to a week by the time the eggs hit the shelves.
A portion of Dakota Layers eggs are sold locally, however, and the Brookings Hy-Vee finally has added the product to its offerings, he said. perhaps more area stores will be added in the future.
“We’d love to have our eggs in the Sioux Falls Hy-Vees,” he said.
The new addition has another added benefit to the region. With the addition of 344,000 more birds, that means about 30 percent more feed will be needed and another five employees.
Most of the feed is bought in the region. More than 1 million bushels of corn a year from the region currently is used to feed chickens, with another 8,000 tons of soybean meal, for a total of about 38,000 tons of feed per year.
The operation is getting ahead of the curve with its colony addition and larger cages. Ramsdell said the two advancements “are coming faster than people think” for the industry.
With California and its population of 37 million being such a huge importer of eggs, that state’s new rules “are a game-changer.”