Midwest Poultry Rides Consumer Wave
Published: Friday, March 22, 2019
Last Monday evening, Wabash County got a jump on celebrating National Agriculture Week. For the final session of 2019's Purdue Extension's Adult Farmer Classes, a large group of attendees made the trek a few miles north to tour one of the county's own ag success stories, Midwest Poultry Services.
"In 1875, my great-great-great grandfather, Daniel Strauss, built a water-powered grain mill on the Eel River, near our current feed mill in North Manchester," said Dan Krouse, who now represents the sixth generation of the Strauss agribusiness family. "We got into raising chickens for egg production in 1969, and it's grown into what you see here today."
"Grown" may be a considerable understatement. From those humble beginnings 144 years ago, Midwest Poultry now encompasses 9 million laying hens, located on multiple sites in Wabash and Kosciusko counties, another site in Illinois, plus a few contract sites in various locations. It is the ninth-largest egg producer in the nation, with Midwest hens laying 7.6 million eggs per day. The company also has a payroll of 560 employees.
The company, still family-owned, sends out about 20 semi truckloads of both conventionally-raised and cage-free white and brown eggs daily. The eggs are delivered to large grocery chains all throughout the eastern U.S. and as far west as Denver, Colo.
The tour took place at Midwest's Automated Egg site, located a few miles south of North Manchester, and home to 2.5 million laying hens. Biosecurity is a top priority, with all tour members having to don protective coveralls and foot coverings. But beyond the animal health precautions, everything else was fair game.
"Please feel free to take pictures, and ask me any question you like," said Krouse, who serves as company vice president of operations. "We're very proud of our business, and we like to show it off. We want to be very transparent."
First stop on the tour was a 500-foot-long conventional layer house for 500,000 caged hens, with cages stacked several layers high. The hens consume 100,000 pounds of feed per day, produced at the nearby Strauss Feedmill, with grain sourced from area corn and soybean farmers. Krouse explained that despite housing a half-million hens, due to high-tech automation, the building was only staffed by two employees per day.
"The birds are fed by conveyer belt, the eggs are 'gathered' by conveyer belt, the manure is removed by a larger conveyor belt, and they have an automatic waterer in the cage," he said.
Over a three-day period, the manure is dried, removed from the house, and stored in a barn, where it is sold to area farmers as a high-quality fertilizer. Krouse explained that while manure sales aren't a profit center, revenue from its sale do help to offset the cost of removing and drying it.
The group next toured a cage-free house. A growing market segment, cage-free eggs now amount to 20 percent of Midwest's production, and will be expanding to 25 percent by the end of the year. Although still highly automated, it was not so much so as its conventional counterpart. Krouse said that it took from two to five times more labor to produce the cage-free eggs.
While the cage-free eggs cost more to produce, Krouse explained that a growing number of customers are more than willing to pay the additional cost in order to get their eggs from an environment in which the hens are "free to express natural behaviors," like scratching in the dust, dust bathing and spreading their wings." He also explained that while the two systems varied considerably in terms of the production environments, neither was superior to the other in terms of animal health and well-being.
"There are tradeoffs in both systems. The air quality's not quite as good in the cage-free system, and while the cage-free hens are freer to express natural behaviors, one of those behaviors is aggression," he said. "Because of that, the birds quickly establish a pecking order, and while not a huge problem, we have a somewhat greater incidence of them pecking each other and a higher death loss in the cage-free houses."
Asked if adding the cage-free production houses had been a good business decision, Krouse said that in today's world, it was really a non-issue.
"The stores that buy from us told us that their customers wanted cage-free eggs, and that they needed for us to supply them," he said. "We have to produce what the consumer wants."
And in the eyes of the consumer, perception reigns supreme, whether it's based in reality or not. Krouse said that while there was "absolutely no difference" in taste or nutritional value between white and brown eggs, Midwest produces both. Again, because "If the consumers want brown eggs, we need to produce them."
Next stop on the tour was the processing building, where the eggs are washed, dried, scanned, and packaged, all by an extremely efficient, mega-automated system. As in the conventional production system, human labor here was also minimal. With only a few employees present, the vast majority of the work was done by an extremely sophisticated, highly-engineered system of conveyors and robotics. The pallets of eggs were then moved to a cooled storage area to await shipment.
Asked if there were plans for future growth, Krouse said that while there were no specific immediate plans, growth was definitely in Midwest's future.
"We're working at capacity now, serving our existing customers," he said. "We don't want to grow just because it's fun to get big, but as grocers consolidate and get bigger, they want suppliers that can supply more and more of their business. For us to be able to do that, we need to get bigger."
And while many critics today associate "big" with "bad," or "unstainable," Krouse isn't buying it.
"The idea of sustainability often gets equated with 'small is more sustainable,' but that's pretty far from the truth," he said. "We have 7 billion people in the world now, and are headed for 9 billion, and we're out of land to produce more food. So we need to be more efficient with the resources we have. Modern agriculture is extremely efficient. To produce eggs in systems that are less efficient, that take more grain and more land, with higher mortality and lower feed conversions to produce the same amount of protein, that's what's not sustainable."
Krouse said that Americans have great food production systems, and he sees eggs as a key player in that.
"Eggs are an excellent and complete source of protein," he said. "They're very safe and very economical. The United States has, by far, the safest, most efficient, most affordable food in the world, and that's something that we should be extremely proud of."
Return to Top of Page