Export of Shell Eggs and Products, January-February 2024.

Exports of shell eggs during the 12-month period commencing March 2022 were constrained by availability due to progressive and cumulative depletion of 44 million hens as a result of HPAI divided among spring and fall waves. The national flock was about 20 million hens lower than the pre-HPAI complement on an average weekly basis during 2022. Sharp rises in price as a result of supply-demand disequilibrium made U.S. export prices non-competitive as denoted by lower volumes over successive months from March 2022. Egg products were also impacted but to a lesser extent than shell eggs. During June 2023 shell and product exports combined represented 2.5 percent of total production, more than double the volume recorded in January 2023 but exports declined in July to 1.9 percent of production by U.S. flocks. At the present time the national flock is approximately 18 million hens lower than pre-HPAI levels with relatively high prices sufficient to constrain exports of shell eggs. Combined shell and product exports in December 2023 represented 2.6 percent of the output of the national flock. It is questioned whether lost markets other than the USMCA and Caribbean nations will be reclaimed over the intermediate term. Sporadic and short-term exports may be made to various nations based on supply disruption caused by HPAI.

USDA-FAS data collated by USAPEEC, reflecting export volume and values for shell eggs and egg products are shown in the table below comparing 2023 with 2022:-

                           U.S. EXPORTS OF SHELL EGG AND EGG PRODUCTS DURING

                                              JANUARY-FEBRUARY 2024 COMPARED WITH 2023

SHELL EGGS

Shell egg exports from the U.S. during January-February 2024 increased by 9.9 percent in volume but declined 20.7 percent in total value compared to the corresponding months in 2023. Unit value declined 26.9 percent to $1.98 per dozen compared to January-February in 2023.

Canada was the leading importer of shell eggs during January-February 2024, with 8.1 million dozen representing 66.4 percent of volume and 64.7 percent of the $24.1 million total value of U.S. shipments of shell eggs. Unit price in January-February 2024 was $1.93 per dozen compared to $2.99 per dozen for consignments in February 2023. Imports by Canada are driven by consumer demand balanced against availability from the controlled supply situation. This inhibits flexibility necessitating imports from the U.S. to cater for demand. During February 2024 Canada imported 6.0 million dozen up 81.8 percent over the corresponding month in 2023. Value was up 30.3 percent to $11.6 million but unit value was 28.5 percent lower to $1.93 per dozen.

The Caribbean Region was a distant second in shell egg imports from the U.S. during January-February 2024, with 2.1 million dozen representing 17.2 percent of volume and 19.1 percent of the total value of U.S. shipments of shell eggs. Unit price in February 2024 was $2.19 per dozen

Mexico was the third-ranked importer of shell eggs in January-February 2024 with a volume of 0.5 million dozen representing 4.1 percent of export volume and 3.7 percent of value. This price discrepancy was due to a low unit value of $1.80 per dozen compared to an average value of $1.98 per dozen for all exports.

During January-February 2024 the next three significant importing regions, the Middle East, the E.U. and East Asia, (principally Hong Kong.) with a collective volume of 1.1 million dozen represented 19.8 percent of U.S. exports. Value of exports to these importing regions amounted to $1.6 million in January-February 2024 compared to $1.7 million in January-February 2023. Unit price for these importers in January-February 2024 averaged $1.45 per dozen, compared to the January-February 2024 average USDA export price of $1.98, per dozen, tray packed, excluding processing but with inland transport and outer cartons. The average 12-month trailing USDA benchmark price for nest-run large shell eggs was $1.40* per dozen weighted by high prices during shortages during the first quarter of 2023 resulting from depletion of flocks infected with HPAI.

*USDA 12-month USDA benchmark nest-run unit prices per dozen: $2.13; March, $2.74; April, $1.38; May, $0.60; June, $0.82; July, $0.83 and August, $0.90; September, $1.00; October, $0.89; November, $1.65; December, $1.81; January 2024, $1.72 and February, $2.51.

EGG PRODUCTS

The total volume of exported egg products during January-February 2024 increased 23.6 percent to 3,715 metric tons compared to January 2023. Total value of $22.4 million was higher by 5.2 percent compared to January-February 2023. Unit value decreased by 14.9 percent to $4,879 per ton compared to January-February 2023. During 2023 the U.S. exported 29,814 metric tons of egg products valued at $134.3 million with a unit price of $4,505 per metric ton. Fluctuation in unit price reflects the composition of exports and the relationship between World supply and demand. Ukraine is now restrained in production but India continues as a significant exporter.

Japan was the 1^st-ranked importer by volume of egg products during January-February 2024 receiving 1,137 metric tons from the U.S. valued at $5.8 million representing 24.8 percent of volume and 25.8 percent of value with a unit price of $5,101 per metric ton. Volume for January-February 2024 was down by 17.3 percent and value was lower by 17.1 percent compared to January-February 2023. During February 2024 Japan imported 751 metric tons down 3.1 percent over the corresponding month in 2023. Value was down 9.1 percent to $4.0 million and unit value was 6.1 percent lower to $5,326 per metric ton. During 2023 Japan imported 10,352 metric tons of egg products from the U.S., valued at $49.9 million. With the conclusion of a bilateral trade agreement, the U.S. is no longer at a competitive disadvantage with respect to the E.U.

Mexico fell to the 2^nd rank of importers from the U.S. during January-February 2024 based on a volume of 1,032 metric tons with a value of $3.7 million, representing 22.5 percent of volume and 16.5 percent of the total value of U.S. exports of egg products. Exports to Mexico were up by 10.3 percent in volume but 30.2 percent lower in value compared to January-February 2023. The unit value of $3,585 per metric ton can be compared with the average unit value for U.S. exports of all egg products at $4,879 per metric ton.

Canada was the 3^rd-ranked importer in January-February 2024 based on a volume of 744 metric tons with a value of $2.7 million. Canada represented 15.2 percent of volume and 12.1 percent of value with a unit price of $3,629 per metric ton. During February Canada was 2^nd- ranked with 503 metric tons representing 20.1 percent of exports of egg products and up 5.4 percent from February 2023. Value was $1.6 million or 14.4 percent of the monthly total, up 128 percent from February 2023 due to a 116 percent increase in unit revenue to $3,180 per metric ton, reflecting a change in proportions of egg products consigned. Volumes shipped reflect restoration of the institutional and food service sectors and relative availability of domestic product in Canada.

South Korea was ranked fourth among importers of egg products during January-February 2024 with a volume of 635 metric tons valued at $2.5 million with a unit value of $3,937 per metric ton. Comparing these values with January-February 2023, volume was 177 percent higher and value was up by 92.3 percent. Most flocks in South Korea have been restored to production after depopulation following 2021-2022 outbreaks of HPAI. Import volume may have been influenced by limited but rising flock depletion or alternatively increased demand in advance of the Lunar New Year. In 2023 South Korea imported 1,141 metric tons valued at $5.3 million. Depending on severity, the return of HPAI may result in a disparity between local availability and demand requiring imports in 2024 as in 2022.

COMMENTS

Exports to Canada and Mexico combined in 2022 amounted to $126.5 million in value equivalent to 47.5 percent of the total value of shell eggs and products shipped. During 2023 exports valued at $150.7 million represented 50.8 percent of shell egg and egg products amounting to $296.5 million. Canada represented 59.0 percent of the $162.2 million for shell eggs and 10.3 percent of egg products valued at $121.2 million, consigned during 2023, emphasizing dependence on this USMCA partner. During January-February 2024 the USMCA represented 49.0 percent of combined shell egg and product sales valued at $46.5 million.

Aspirational volumes of exports in excess of five percent of domestic production are unrealistic. The E.U., Japan, South Korea and Taiwan will buy according to their needs for undifferentiated shell eggs and products based on landed price in a competitive World market. Purchase decisions for commodities are determined by FOB price, freight, duty and broker margins. Shell eggs and the various categories of egg products are essentially commodities and generally do not respond to promotion.

Exports will be dependent on the willingness of importers to accept the World Organization for Animal Health (WOAH) principle of regionalization (zoning) in the event of outbreaks of exotic Newcastle disease or isolation of either H5 or H7 avian influenza (AI), in commercial flocks, irrespective of pathogenicity. Most importing nations are now applying regionalization and permitting imports on a zonal, county or state-exclusion basis following H5 or H7 AI infection. Canada and the U.S. operate according to a 2018 bilateral agreement to maintain trade in the event of outbreaks of catastrophic exotic diseases including HPAI and END.

Generally pasteurized egg products should not be subject to any embargo imposed following reports of AI or Newcastle disease in a region.