I, I guess first things first is, um, would you tell me what this egg clearinghouse thing is, please?

Yeah.

So the egg clearinghouse is... essentially think of it as a wholesale marketplace for eggs, or as it's known, uh, nicknamed among the egg producers, the Wall Street of eggs.

Basically, what it does is buyers and sellers or, of producers of eggs buy and sell from each other.

So in big demand seasons, or maybe you have a flock that went down with avian flu, you can kind of go onto the egg clearinghouse and basically put out a call for eggs.

"Hey, I've got an order due for Kroger.

I need eggs." They put out a bid for eggs, and then you have somebody who says, "I've got eggs," and then they offer you the price for it, and so on and so forth.

How?

I, I guess first things first is, um, would you tell me what this egg clearing house thing is, please?

Yeah, so the egg clearing house is...

Essentially, think of it as a wholesale marketplace for eggs, or as it's known, uh, nicknamed among the egg producers, the Wall Street of eggs.

Basically, what it does is buyers and sellers or, of producers of eggs buy and sell from each other.

So in big demand seasons, or maybe you have a flock that went down with avian flu, you can kind of go onto the egg clearing house and basically put out a call for eggs.

"Hey, I've got an order due for Kroger.

I need eggs." They put out a bid for eggs, and then you have somebody who says, "I've got eggs," and then they offer you the price for it, and so on and so forth.

How?

One unnamed co-conspirator talked about bidding like they vote in Chicago early and often, an old joke about political corruption.

Another former Cal-Maine executive said, let it rip when they needed to place bids aggressively, stuff along those lines.

So they used casual language and probably, as the DOJ would say, should not have been talking to each other quite in this manner, especially among rival business executives.

But Thomas says this episode illustrates just how fragile the American food system can be.

At its core, it is meant to give us cheap, affordable food.

It doesn't always do that.

And you have situations like this where you can just see the fragility in the supply chain or how easily it can be taken advantage of and some of the cracks.

So at the end of the day, you're dealing with live animals, disease, and people who are behind these trades.

Patrick, why is the Middle East important for the fertilizer industry?

So the Middle East is actually a massive producer of what's called nitrogen fertilizer.

The plants are idled right now, so you're not having the fertilizer produced in plants in the Middle East, and then raw materials that would go into producing it maybe in Europe and elsewhere right now are not getting out as well.

The raw materials all come through the Strait of Hormuz, and that is being blocked.

That cannot get out, and that is causing big supply problems.

Now, as these fertilizer costs are also rising, what are these farmers doing about this?

So this is a massive deal and might have an impact for quite some time.

This could stretch into 2027.

Okay, Patrick, what is pushing these prices so high?

Several years ago, cattle ranchers across the United States started shrinking their herds.

This was due to some pretty poor financial conditions following the COVID-19 pandemic, and then in '22 we had a massive drought that made it really expensive to feed livestock, so it made more financial sense for ranchers to send their animals to market.

They sent more to slaughter and essentially just shrunk their herds, and now we're in a situation where we just don't have the supply to meet demand, and that's pushed prices up to these record levels over the last year.

Does it look like things might stay this way, or are ranchers looking like they're gonna expand their herds?

Ranchers are just, they're really enjoying these good times.

They've historically always struggled to make profits, and now they're really making money, and a lot of them have decided that they're gonna hold onto it, and there's not a lot of signs of significant herd rebuilding.

There are more farmers over 75 than there are under 35, so some of these guys are just choosing to retire.

How important has the Tyson plant been to that city's economy?

It's hard to understate how important that plant has been.

It really defines the town.

Like, when you think of Lexington, it is a meatpacking town, the largest employer, and it's where, you know, the city draws most of its tax base from.

Without it, you're gonna have thousands of people who are expected to be out of work.

You have even businesses that are not connected to the plant.

Think of all the restaurants, the trucking companies that sh- hauled things in and out of the plant or moved the cattle from some of the neighboring ranches and feed yards.

What might Lexington be like a year from now if these trends continue?

Uh, before we get to the aid package, I mentioned some of the stresses on farmers, but can you tell us a little bit more about the pressures that they are under right now?

Yeah, and thanks so much for having me on.

I appreciate it.

Um, so farmers have had an exceptionally difficult year.

Uh, and really, it's been a la- a difficult last couple of years.

So there's a number of different factors.

Number one is just costs.

this may be enough to get them through the short term, but long term, some of these challenges may still remain?

Now, why exactly is that? Is that due to tariffs? Is that due to inflation? Like, what's the reason?

Yeah, it really depends on the supply chain.

Overall, I mean, we've seen food prices have really been accelerating over the last few months.

And we've heard that from a number of grocery executives, right? You know, in this Thanksgiving, you're going to see sweet potatoes is one thing that'll rise.

You'll see coffee has been one that we've talked a ton about.

And that's because of the tariffs, especially on Brazil.

Smuckers, though, said recently this week it wasn't going to raise coffee prices further.

Ground beef up about 13 percent.