How to Start an Egg Business

Follow these tried-and-true ideas to grow a successful—and profitable—egg business.


Perhaps the only thing better than cracking, cooking and savoring your own farm-fresh eggs is sharing a dozen or two with family and friends—and the occasional cash-paying customer. More of these consumers exist today, and small-flock growers are reaping the rewards, thanks to growing awareness of the health benefits of pasture-raised eggs.


Bud Brown, an 81-year-old chicken farmer in Roseburg, Ore., regularly fills his pockets with enough “egg money” to pay for feed, supplements and miscellaneous expenses. He sells his free-range eggs at his U-pick farm, at local farmers’ markets and through community-supported agriculture programs. His real customer base, however, formed from word-of-mouth advertising.



“Everybody wants my eggs,” says Brown, decked out in his utilitarian farm garb—a thread-bare T-shirt, perfectly worn denim overalls, a green-and-black frayed-cotton flannel and holey muck boots covered in years of chicken-rearing experience. “Twenty-something years ago, I started out with a dozen layers for my family. As soon as my wife started telling her friends about my eggs, we were in business.”


Brown now keeps between 200 and 250 Black Star chickens, a cross between Plymouth Rock chicken breed and Rhode Island Red chicken breed, to feed his customers’ supply, along with a few dozen blue-egg-laying Araucana chickens for clients who prefer colored eggs.


“The operation is just enough for my sons and me to handle,” he says.


Pairing the desire to provide nutritious homegrown eggs for loved ones and neighbors with the practical matter of finding a way to pay for chicken feed and expenses makes sense. Depending on where you live, a dozen pasture-raised brown eggs can sell for an average of $2.50; a 50-pound bag of organic chicken feed costs about $15. A flock of six chickens will gobble down the bag in about a month; that’s about 1½ pounds of food per chicken per week. In this instance, a hobby farmer would simply need to sell six dozen eggs to pay for his or her feed, along with a few extra dozen to cover additional costs, like egg cartons, bedding, water, power, supplements and supplies, which add relatively little to the overall monthly bill.


The good news is that the market for homegrown eggs exists. According to the USDA, an individual consumes an average of 259 eggs per year. More and more egg eaters prefer the all-natural or organic varieties, too.


While your hens continue to churn out two eggs every three days, how can you profit from their natural ability to transform crumble (feed pellets broken up into smaller pieces), greens, bugs and water into healthful sustenance for humans (and other four-legged critters)? Know your market, create a quality product and distribute it successfully to ensure your flock and your stock continue producing “egg money” to pay their own way—and then some.


Know Your Market, Know the Laws
Hands (or feathers!) down, the most important aspect to consider about the egg business is your market. Do you have buyers lined up before the chicks have feathered out? Do you live in a rural area where fresh eggs are a dime a dozen? Can you sell your wares at a local farmers’ market or through a CSA program? Maybe, like Brown’s wife, your spouse or partner can talk up sales and establish an egg-buying network amongst friends and neighbors. Or perhaps, as Bryan Thomas of Rogers, Ark., discovered, your efforts can take on a life of their own.


“When we moved [to Arkansas] from Arizona, we bought a half-dozen chicks and set up a small coop out by the garden with no intention of selling any eggs,” says Thomas, who invested in a 20-acre ranch after retiring from a career as a plumber. “Before long, my parents wanted a dozen every week, my sister wanted a dozen, their friends wanted some—and our girls couldn’t keep up with demand. So the following spring, we bought another two-dozen chicks, remodeled and expanded the coop, gave the birds an acre to themselves and have been in the egg business ever since.”


As with any successful business venture, you should create some sort of plan that identifies your target market and potential growth areas. It doesn’t need to be that of a billion-dollar corporation, but it should provide some sort of framework for growth, Thomas says.


“Does it mean we can retire on egg money? Not quite,” Thomas adds. “But after people were willing to pay for our eggs, we started to calculate our costs and income and to look at areas where we could sell more eggs to boost our profits. It was a great foundation for what we have now.”


In addition to having a rough business plan in place, you must also be aware of—if not well versed in—the laws regarding egg selling in your municipality, your county, your state and the country. Call your county extension agent or state poultry or agriculture specialist about local and federal laws regarding claims you wish to make about your eggs, conditions you must meet to make those claims and necessary sales permits you may need.


“In some areas, it’s against the law to reuse other companies’ egg cartons,” Brown says. “And most everywhere, you have to go through some big hoops and pay a lot of money to use the ‘organic’ label.” 


As for pricing your eggs? You may think your farm-fresh delights are worth $10 a dozen, but your customers will not be willing to pay quite that much. According to the USDA, as of April 19, 2010, the average price for a dozen extra-large certified organic eggs in cartons runs between $2.55 and $3.16. You probably can lean toward the higher end for your nutrient-dense eggs, depending on where you live and what the market dictates.


“In our area, we can charge $3 a dozen or $4 for an 18-pack,” Thomas says, who sells direct to customers rather than through a second party. “But that’s with free delivery.”


When deciding what to charge for your eggs, consider all of your expenses, including production, marketing and promotion, packaging and delivery costs for the entire year. Feed will likely be your greatest expense, but also budget in one-time or unexpected costs like coop remodels or fencing. Add all of those expenses together. Next, estimate how many eggs each hen will produce: A good average is 180 eggs per year. Multiply 180 by the number of hens you have to get your total number of eggs. Then divide that number by 12 to get your estimated total number of dozens for the year. Finally, take your total expenses and divide that by your number of estimated dozens to get the minimum price you should charge to break even.


If that number is too high, you may want to cut some costs.


“We didn’t make a profit on our eggs for some time,” Thomas recalls. “But after we had all the major expenses behind us, like the coop remodel and additional fencing, the money that came in started adding up quick.”