Pasture-Raised Eggs Go Commercial
From Georgia to Texas, Vital Farms is helping egg farmers reclaim their craft to meet consumer demand — and taking market share while doing it.
This story starts with a set of doors. They’re the large barn doors designed to open up onto pasture every morning when Kathy Cooper, a farmer in Chestnut Mountain, Georgia, lets her hens out to roam around in the fresh air. The birds might flock together or venture out alone to the edge of the fenced-in pasture to scratch for bugs before they’re called back into the barn for the night through the same set of doors.
It hasn’t always been this way. Kathy and her husband John used to raise 14,000 birds in a single barn. And then, four years ago, they shifted to raising laying hens on pasture for Vital Farms, an Austin, Texas-based company that contracts with farmers around the country.
Kathy is one of a number of farmers who have changed their farms and their approach to fit Vital Farms’ standards.
Pasture-raised eggs are a step beyond cage-free, the standard that dozens of companies — most recently Costco, Nestle, and Wendy’s — have pledged to adopt in recent years.
While so-called “cage-free” farms can contain thousands of birds in a single barn 24/7, pasture-raised birds live outside during waking hours. On Vital’s farms each bird is required to have over 100 square feet of space.
The first few times Kathy and her family opened the barn doors to let their 6,000-bird flock out, Kathy says she didn’t quite believe they’d ever come back in. In the old days, she says, “it would have been a horror for a chicken to get out.” But Kathy and her son found that if they made just the right noise — rustling a trash bag works well — they could corral the flock back to the barn easily. And they’ve done it nearly every day since.
Many of the farmers Vital works with have a history of raising birds or eggs for a handful of much larger companies — think Tyson and Perdue. When they lose their contracts or opt out, they’re often left with empty barns and other infrastructure, says Jason Jones, co-founder and CEO of Vital Farms. “We don’t care if the barns aren’t state-of-the-art,” he tells me. “We can come in and, in many cases, take a saw to the walls” to make it easier for the birds to get in and out. Vital Farms employs a team of technicians whose job is to help the farmers change their operations by doing things like adding in the doors.
As a result, the company often attracts producers in places like Alabama, Arkansas, and Georgia looking to transition out of contracts with big poultry companies — contracts that keep them locked in a scenario where they’re raising giant flocks of birds they don’t own for companies that often treat them like cogs in a machine.
So the doors can be seen as having a kind of symbolic weight too. And the shift to pasture-based farming — which is hardly new but hasn’t been practiced on any kind of commercial scale in the U.S. in recent decades — has been liberating for the birds and the farmers.
Case in point: Kathy’s husband used to have to wear a beeper at all times because most crowded, closed henhouses require a series of giant ventilation fans to literally keep the birds from over-heating. “Someone always had to be nearby,” says Kathy.
“If the power clicks off and your generator doesn’t go on, you’ll lose all your birds,” she adds. And she wasn’t exaggerating. The U.S. Department of Agriculture recently recommended farmers use intentional ventilation shutdown as a way to euthanize or essentially bake flocks of chickens or turkeys alive if they come down with bird flu.
Now, with the pastured birds, Kathy says, “we just close the curtains at night.”
If the farmers had stayed big, Kathy says, “we would have been caught in a cycle of upgrades.” This is a common refrain. Every few years, the contracting company will insist the farmers add this or that electronic device, or step up their ventilation. In fact, it’s not uncommon for these farmers to find themselves deep in debt with no viable way out.
The fact that farmers like Kathy are able to work this way is pretty remarkable. They don’t have to make the hustle to the farmers market every week, create a website, or rely on the goodwill of their local chef community to make a profit.
They’re able to farm at a human scale, and they all know enough about the alternatives. So they’re taking advantage of the chance to do so. “My husband raised chickens all his life and he says this was like going back to the way he did it with his dad,” Kathy told me. In today’s food and farm world, that’s no small thing.
Vital Farms’ Jones says that difference isn’t a coincidence. The business, which started off as a tiny egg operation in 2007, has grown impressively fast in eight years.
“We wanted to scale this but keep it small,” he told me. “We wanted to be the antithesis of the factory farm and get distributed more and more broadly.”
For this reason, the company is attracting former conventional farmers, but it’s also working with new and beginning farmers — many of whom would have no point of entry without the company.
“Critical to our growth was making sure the demand was there, and that people will pay more for it because it’s more expensive to do this way,” says Jones. And it looks like they will. Vital Farms’s eggs sell for a range of prices — beginning at around $5 in some stores — based on the feed the animals receive (it ranges from conventional, to non-GMO and organic which can retail for closer to $8-$9 a dozen). And, so far, consumers appear to be willing to pay the price. Vital Farms scaled up initially thanks to a national deal (and a $100,000 producer’s loan) with Whole Foods Market, but they’re also now available in more mainstream chains like HEB and Kroger — as well as a few Target locations. In order to fulfill this demand, Vital now works with around 90 farms across the Southern half of the United States. Jones estimates that the number could double in the next several years.
At a time when more than half of the country’s farmers must work off-farm jobs to survive and the average family farm is technically running at a deficit, Jones and his co-founder Matt O’Hayer had a radical vision to keep these farmers on the land by creating a network of pasture-raised egg operations.
“All of [the growth] happened quicker than we would have thought five or six years ago.” He adds: “it has to be a win-win situation. We have very consciously followed the stakeholder model, and not just put money in the shareholder’s pocket.”
Jones and O’Hara also like the environmental advantages of pasture, like doing away with the manure runoff and other pollution associated with factory farms. “If done right, we’re actually improving the land because it’s self-fertilized, rotated, and managed in a way that encourages healthy pasture,” says Jones.
But the bigger idea — the really big idea came wrapped up in a small-sounding one: “We wanted the quality of production you get with a small family farmer who wants to be on their farm all day and not have a “real job” during the day and then come home and flip some switches at night — which is basically what you have when Tyson or Pilgrim’s Pride or similar-sized company is more or less renting your backyard,” he says. Poultry farmers aren’t alone in often needing to work off-farm-jobs to make ends meet. At least one person works off the farm in 91 percent of farm households.
Jones also wanted those small farms’ eggs to be widely available. And while the model isn’t ultimately all that different from the ones larger companies use (Vital owns the birds and controls the feed, and the farmer is responsible for the infrastructure), Jason Jones says, “there are triggers in the contracts that protect them from feed price spikes.”
Vital also agrees to buy all of the eggs produced, regardless of whether or not they sell in stores. “Because no one else has been doing this the way we have. It’s a risk [for the farmer],” adds Jones. For instance Vital asks farmers to “put up a chicken house that looks goofy to anyone else,” he adds.
While it’s an outlier in the egg business, Vital Farms is just one of a handful of businesses that have the potential to keep family farmers on the land. Rather then encouraging all small producers to get big or get out, companies like Organic Valley, Niman Ranch, Shepard’s Grain, and Country Natural Beef are providing an alternative to that dichotomy — a third option, if you will. And they’re doing so by creating what some in academic agriculture circles call “agriculture of the middle.” As the food system has consolidated, most of what Americans now eat comes from very large and very small producers; the middle has fallen out.
Fred Kischenmann, of the Iowa’s Leopold Center points to “small and mid-sized farmers who differentiate their product but collaborate together and form cooperatives, LLCs, and other business arrangements,” as an important, often overlooked component of the food system. And yet, he says, “these models allow [farmers] to pool their resources together, reduce their transaction costs, and produce the kinds of differentiated products that consumers want.”
The retail is so now consolidated, says Kischenmann, companies like Walmart are able to drive down prices to the point where only the largest corporate interests can compete for shelf space. So when players like Vital Farms are able to stake out space on grocery stores, it’s in a place where you just won’t otherwise see food from small farms.
Farms like the one run by Donald Blosser, a Mennonite Vital farmer from Missouri used to raise caged laying hens and then turkeys for a company that was bought out by Cargill. At the height of the operation, Donald and his family were raising 33,000 turkeys indoors. The money was decent, but the turkeys were often unhealthy and the mortality rate was high. And they had to hire additional people to come in and truck out the overwhelming quantity of manure.
“At Cargill they’re like, ‘If you don’t like the way we’re doing it, you can quit.’ It was like we were one farm in 5,000,” he adds.
Now Donald is back at it, raising pastured hens. The work in manageable and he can give each bird the individualized attention it needs. And — most important — he can stay home and work the land, rather than having to find a market for the eggs.
He says keeping animals on pasture is a kind of reward in and of itself. It might be more work but it’s also allows for kinship with the animals — something he had given up on expecting. “We open the doors, and they just run out. You get to the place where you want to turn them out because it’s what they love to do.”
