Dean has been a fixture in the egg-breaking segment of the U.S. egg industry for 43 years. He has worked extensively on processing, product quality and marketing of liquids and has traveled extensively as a consultant. He obtained his baccalaureate degree from the University of Missouri and studied for a Masters degree from the University of Nebraska in Omaha. He joined Waldbaum Eggs in 1979. Although the company held 1.6 million hens at this time there were many challenges including sales. Dean was influenced during his early involvement in the egg industry by Dr. Milton Waldbaum and his partner Dan Gardner who along with other industry stalwarts served as mentors. An early experience was an extensive tour through Western Europe to observe egg production and processing. During his tenure with Waldbaum Eggs, company revenue increased sixfold to 1989 when the enterprise was sold to Michael Foods. Too young to retire, Dean worked with Papetti, Hennigsens and Rembrandt and has provided advice to customers in Canada, Mexico and Japan. He lives in Fountain Hills, Arizona with his wife Yoly and follows the egg-breaking industry undertaking consulting commissions.
In early September EGG-NEWS had the opportunity to meet with Dean virtually and gain from his experience.
EGG-NEWS: There has been considerable consolidation in egg products over the past decade, how do you view this trend?
Dean Hughson: Effectively industry growth stalled a long time prior to COVID. There has been limited innovation but with advances in efficiency through scale of operation. This said, there is scope for smaller processors marketing specialty products.
EGG-NEWS: Currently the egg breaking segment of our industry is bearing the brunt of COVID-19 restrictions. What do you foresee for producers?
Dean Hughson: Irrespective of whether we do or do not have a vaccine that is effective by the end of the year, restaurant traffic will not recover previous volume for a long time. A combination of concern over COVID-19 and a recessionary environment will lead to a continued at-home cooking and eating. A higher proportion of our eggs will be purchased and consumed in shell form.
EGG-NEWS: Could you contrast the 2015 HPAI crisis with the most recent COVID event with respect to the egg liquid industry?
Dean Hughson: Recovery from HPAI was a matter of time based on rearing replacement flocks and restoring production. In the interim, imports maintained supply since there was no effect of the disease on the market for liquids with soaring prices. In contrast the COVID pandemic has unfortunately seriously depleted the market for egg liquids forcing shutdowns of plants, reduction in hen numbers, as evidenced by the monthly statistics from Iowa and the need to divert eggs that would have been broken into the retail shell market.
EGG-NEWS: How do you view the future of existing independent inline breakers?
Dean Hughson: Most of the companies have probably exhausted their working capital and will require support from intermediaries in the supply chain. Banks are naturally disinclined to extend loans to any segment of egg production.
It is possible that there may be further consolidation in the industry, some may convert to shell eggs and yet others may cease production. It is possible that a major agribusiness concern may integrate backwards into the live bird aspect of liquid production.
EGG-NEWS: What are your views on conversion to cage-free?
Dean Hughson: Only about five percent of egg liquid is derived from cage-free hens. There does not appear to be a demand for the product in industry other than a few companies producing specialty foods containing egg liquids where either corporate policy or the demographics of customers dictate eggs from non-caged hens. Given the state of the industry it is difficult to envisage investment of in excess of $35 per hen to convert from cages to aviary or alternative systems.
EGG-NEWS: Following the severe loss of hens to HPAI in 2015, prices of egg products soared creating an opportunity for substitutes. Do you anticipate continued competition from alternatives?
Dean Hughson: It is extremely difficult to replace the functional properties of real eggs. The American Egg Board has done an excellent job of promoting “real eggs” using a dedicated team and their contacts in the culinary area. Customers are looking for clean labels and that presumes greater use of eggs as a major ingredient.
EGG-NEWS: How do you view foreign competition?
Dean Hughson: Providing the U.S. respects provision of the USMCA we will continue exporting to our neighbors, Mexico and Canada. Exports to Japan have dwindled and we may be in danger of losing Hong Kong. During the past decade, we have seen the rise of the Ukraine and India. Both nations have an excess of shell eggs and have installed modern breaking and pasteurizing equipment. Export of egg liquid is strongly dependent on trust. Neither of the major upstart competitors have earned a reputation in the world market place. In addition to the Ukraine and India there are many new installations in Southeast Asian nations that will be supplying local markets.
EGG-NEWS: Do you envisage any new technology or products?
Dean Hughson: Egg liquids are ingredients in a wide variety of foods. There has really been no major advance in developing high-value specialty products. Extraction of lysozymes appears to have faltered. There is still considerable demand for egg white based on perceived health considerations. With respect to technology the major manufacturers of whom there are few, have achieved incremental improvements in efficiency and yield but we are pushing the envelope. Size provides economies of scale up to a point but events in the past few months have demonstrated the fragility of markets with larger producers disproportionately affected.
EGG-NEWS: Do you have any messages for your colleagues in the industry?
Dean Hughson: I have been extremely fortunate in being able to learn from industry veterans. I am committed to extending my experience and knowledge to entrants to the field, mentoring and sharing both positive and negative experiences from my career. The challenge for producers will be to select a level of production that is balanced by market demand. There are always niches for specialty producers who can use egg liquids for innovative product applications.