USDA Weekly Egg Price and Inventory Report, September 13th 2018.

09/13/2018
  • Hen Numbers in Production Increased 0.8 million to 319.2 million Continuing an Upward Trend
  • Shell Inventory up by 1.5 Percent From Previous Week
  • Generic Prices for Extra Large and Large Were Down 8.0 Percent on Average Compared to Previous Week.

OVERVIEW

Prices

According to the USDA Egg Market News Reports posted on September 10th the Midwest wholesale prices for Extra Large and Large sizes were respectively lower by 8.0 percent and 8.1 percent. Mediums were lower by 15.0 percent compared to the past week. The progression of prices during 2018 is depicted in the USDA chart reflecting three years of data, updated weekly.

The September 10th USDA Egg Market News Report (Vol. 65: No. 37) documented a USDA Combined Region value rounded to the nearest cent, of $1.08 per dozen delivered to warehouses effective September 8th This price lags current Midwest weekly values by one week. The USDA Combined range for Large in the Midwest was $0.99 per dozen. At the high end of the range, price in the South Central Region attained $1.14 per dozen. The USDA Combined Price last week was 40 cents per dozen below the three-year average and 5 cents per dozen above the corresponding week in 2017.

Flock Size

The number of producing hens this week was 319.2 million, an increase of 0.8 million due to second-cycle hens resuming production and from placements in May. The hen population is more than adequate to meet both late-Summer seasonal consumer demand and industrial requirements but any number above 317 million in production over the short term at this time of year portends lower prices and increased inventory going forward. The total U.S. egg-flock comprises 326.4 million hens including 2nd Cycle birds and those in molt on all farms. The 7.2 million difference between hens in production and total hens is the same as last week and represents 2.2 percent of the national flock. This suggests that there are now more molted flocks soon to come back into production with implications for price given increased supply and seasonally low to moderate demand.

Stock levels

Generic shell-egg stock rose 1.5 percent to 1,403,700 cases following a 3.0 percent decrease over the previous week. To maintain prices the market will have to find a balance between supply and demand as the Industry moves through the third quarter, generally characterized by falling prices during late Summer.

The National stock of frozen egg products as reported by the USDA on August 22nd 2018 attained 29.9 million pounds (13,589 metric tons) on July 31st 2018 down 25.6 percent from July 31st 2017.

Dried-egg inventory increased by 3.2 percent during July to 13.9 million lbs. (6,319 metric tons) as of July 31st 2018 (was 13.9 million lbs. on June 30th 2018)

INVENTORY

Cold Storage

Cold storage stocks in selected regions on September11 th 2018 amounted to 2.911 million pounds (1,323 metric tons), 0.6 percent above the stock of 2.893 million pounds during the week of September 1st. 2018.

The most recent monthly USDA Cold Storage Report released on August 22nd 2018 documented a total stock of 29,896 million pounds (13,589 metric tons) of frozen egg products on July 31st 2018. This value was down 25.6 percent from July 31st 2017. A total of 85.3 percent of combined inventory comprised the categories of "Whole and Mixed" (44.2 percent) and "Unclassified" (41.1 percent). The lack of specificity in classification suggests a more diligent approach is required to enumerate and report inventory by the USDA.

Shell Inventory

The national stock of generic shell eggs reflecting September 10 th 2018 was higher by 1.5 percent, following a 3.0 percent decrease in inventory during the previous week and a 6.6 percent increase during the preceding week. This suggests that the market is striving for equilibrium following oversupply in early September due to additional output from molted hens coming back into production and pullet flocks placed in early April reaching peak production. Medium size eggs in the Midwest, which were disproportionately low in price compared to Large and Extra Large fell to a range of 55 to 58 cents per dozen reflecting the lower contribution from flocks of increasing age. Last week an additional 0.8 million hens were added to production.

Four of six USDA Regions reported higher stock levels. The Midwest Region was up 6.4 percent compared to the previous week to 475,100 cases. This region was followed in decreasing order of stock level by the Southeast Region, up by 2.8 percent to 277,000 cases; the South Central Region up by 3.4 percent to 254,900 cases; the Southwest Region down 10.8 percent to 167,600 cases; the Northeast Region up 0.7 percent to 140,800 cases and the Northwest Region down 4.7 percent to 88,300 cases.

The total USDA Six-Area stock of commodity eggs comprised 1,753,300 cases, of which 80.1 percent were shell eggs. The inventory of breaking stock was up 3.5 percent to 349,600 cases reversing the downward trend from previous weeks.

The price for breaking stock and hence availability from both mature and young flocks will be influenced by the demand for generic shell eggs and contract obligations for the breakers.

As of Monday September 10th 2018 the inventory of other than generic eggs, compared to the previous week in parentheses, comprised:-

  • Specialty category, down 8.1 percent to 37,200 cases. (was up 10.3% to 40,400)
  • Certified Organic, down 1.5 percent to 92,100 cases. (was up 1.2% to 93,500)
  • Cage Free, down 9.0 percent to 83,000 cases. (was down 5.2% to 76,100)

Recent data suggests a weekly fluctuation in demand for cage free products. This is attributed to an increase in production of this category in 2016 and 2017, motivated by commitments by members of the FMI, NCCR and NRA. Recent announcements by major egg producers indicate a pause in conversion of existing facilities and a short-term moratorium in erecting new complexes and houses in other than the Western coast states until demand for eggs from non-caged flocks rises. Demand for cage-free eggs is influenced by the relative shelf prices of the category in comparison with generic white-shelled eggs from caged flocks. At the other end of the price range, consumers will purchase less-expensive brown cage-free product over organic eggs when there is a differential in price greater than $1.20 per dozen. Similarly, consumers purchase white-shelled generic eggs in preference to brown-shelled cage-free with a differential of over $1.20 per dozen. The need for structured statistically relevant market research on willingness to pay for attributes such as housing, GM status and nutritional enrichment is self-evident.

Relative Prices of Shell-egg Categories

During the past week the USDA benchmark retail price of Cage-Free brown rose 5.3 percent or 14 cents per dozen to $2.76 per dozen. Certified Organic fell 10.6 percent or 43.0 cents per dozen to $3.62 per dozen narrowing the price differential to $0.86 per dozen ($1.54 per dozen last week) suggesting increased demand for Certified Organic over cage free brown during the current week. The differential between generic white Large and Cage-Free brown was $1.28 per dozen ($1.23 per dozen last week) which will increase demand for generic white. Preference for generic white over cage-free brown is evident with a price differential greater than $1.20 per dozen. Large week-to-week percentage fluctuations can be expected in the stock of specialty and organic eggs based on the small base of these categories. The low stock of specialty eggs is noted in the section on inventory.

USDA Cage-Free Data

According to the latest monthly USDA Cage-free Hen Report released September 4th 2018 the number of hens held in other than conventional cages in August remained stable from July as follows:-

Total U.S. flock held for USDA Certified Organic production = 15.6 million

Total U.S. flock held for cage-free production = 39.1 million

Total U.S. non-caged flock = 54.7 million This is 17.3 percent of a nominal 317 million U.S. flock in production but 25.4 percent of a presumed flock of 215 million held for shell-egg production

Processed Eggs

For the week ending September 8th 2018 eggs processed under FSIS inspection decreased by 5.1 percent compared to the previous week to a level of 1,504,541 cases. The proportion of eggs broken by in-line complexes rose to 55.2 percent (was 52.8 percent) denoting an increase in consignment of non-contracted eggs from breaking to packing in response to prevailing spot prices. During the corresponding week in 2017 in-line breakers processed 55.0 percent of eggs broken due to lower wholesale prices for generic eggs.

Eggs broken YTD attained 55.0 million cases, 3.0 percent more than the corresponding period in 2017.

PRODUCTION AND PRICES

Breaking Stock

The price range for breaking stock delivered to Central States plants on September 10th was down 8.8 percent compared to the previous week over a range of 48 to 55 cents per dozen. Checks were down 17.8 percent over a range of 39 to 44 cents per dozen. The revenue for breaking stock and checks was lower than the production cost for nest-run, estimated by the EIC at 61.4 cents per dozen during August 2018.

Shell Eggs

The USDA Egg Market News Reports released on September 4 th 2018 documented the changes in price for the major grades from the Midwest, for Central States Breaking Stock and Certified USDA Organic. The following table lists the "most frequent" ranges of values as delivered to warehouses*:-

Size/Type

Current Week

Previous Week

Extra Large

91-94 cents per dozen

99-102 down 8.0%

Large

89-92 cents per dozen

97-100 down 8.1%

Medium

55-58 cents per dozen

65-68 down 15.0%

Certified Organic EL

275-310 cents per dozen

unchanged long term

Breaking stock

48-55 cents per dozen

55-58 down 8.8%

Checks

39-44 cents per dozen

48-53 down 17.8%

*Store Delivery approximately 5 cents per dozen more than warehouse price

The September 10th 2018 Regional (IA, WI, MN.) average FOB producer prices, for nest-run grade-quality white shelled eggs, with prices in rounded cents per dozen (last week in parentheses) were unchanged:-

EL. $0.79 ($0.84) estimated by proportion: L. $0.78 ($0.81): M. $0.37 ($0.45)

The following advertised retail prices for the week ending September 3 rd 2018, (compared with the previous week in parentheses) were posted by the AMS for dozen packs:

  • USDA Certified Organic, Brown, Large: $3.62 ($4.05)
  • Cage-Free Brown, Large: $2.76 ($2.62)
  • Omega-3 Enriched Specialty, White, Large: $2.50 ($2.53)
  • Generic White, Large Grade AA $1.22 ($1.29)
  • Generic White, Large Grade A (Feature price) $1.51 ($1.34)

Retail prices as determined by the USDA-AMS for generic white Large AA last week were down $0.07 per dozen to $1.22 per dozen. This price is following seasonal trends.

(See the text, tables and figures in the review of production and prices comprising the report on USDA August 2018 data in this edition. A report on the financial results posted by Cal-Maine Foods for the completed 4th Quarter of Fiscal 2018, released July 23 rd can be retrieved under the STATISTICS tab)

 

Shell-Egg Demand Indicator

The USDA-AMS Shell Egg Demand Indicator for September 12th 2018 was numerically higher by 1.0 points from the last weekly report to +0.6 with a 1.5 percent increase in inventory as determined by the USDA-ERS as follows:-

Productive flock

319,203,010 million hens

Average hen week production

78.4 % (was 78.5%)

Average egg production

250,255,160 million per day

Proportion to shell egg market

69.1% (was 67.4%)

Total for in-shell consumption

480,351 cases per day

USDA Inventory

1,403,700 cases

26-week rolling average inventory

4.82 days (was 4.82)

Actual inventory on hand

4.79 days (was 4.84)

Shell Egg Demand Indicator

+1.0 points (was -0.4 on September 4th 2018 )

Dried Egg Products

Prices for dried egg products (most frequent price with a range in $ per pound) effective September 7th 2018 were:-

Whole Egg

$3.10-$3.20

Down $0.05 on the low end and up $0.05 on the high end of the range

Yolk

$3.10-$3.25

Unchanged

Spray-Dried White

$5.65-$5.85

Up $0.05 on the low end and up $0.05 on the high end of the range

Blends

$2.75-$2.80

No new quotation

Although steadily declining, U.S. dried egg inventory is now at a moderate level attaining 13.9 million lbs. (equivalent to slightly less than 4-weeks current production) on July 31st 2018, with a 50 percent decrease compared to July 31st 2017. During the period July 1 st 2018 through July 28th 2018, dried egg processed under USDA inspection amounted to 10.6 million lbs. (11.6 million lbs. in June 2018). Lower shell-egg prices over the past two weeks restored the volume of non-contracted eggs from packing to breaking.

COMMENTS

Newcastle Disease (END)

Over 115 exotic Newcastle disease (END=vvND) cases in small multi-species backyard flocks were confirmed between May 26th and September 11 th in the Southern California Counties of San Bernardino Riverside Ventura and Los Angeles This situation should not disrupt exports of raw poultry, breeding stock, hatching and table eggs and egg products to Mexico despite isolation of an H7 virus from a commercial flock of turkeys in Stanislaus County. This flock was rapidly depleted. Following negotiations after the index case was diagnosed in Los Angeles County during mid-May, authorities in Mexico have accepted regionalization and on May 23rd restored importation of raw poultry from other than the restricted Counties in California. There is absolutely no reason to embargo pasteurized egg products derived from a USDA-FSIS inspected plant.

After fourteen weeks since the first San Bernardino outbreak, it is high time that APHIS and the CADA& F release the results of their preliminary epidemiologic investigations, assuming they have collected and processed data. It is important for commercial egg producers to know the source of the END virus, mode of dissemination, extent of infection and whether any or which species of wild birds may be reservoirs. This information is required to plan biosecurity procedures and predict possible outcomes in the event that the incidence rate does not fall.

Avian Influenza

As in the U.S. and the E.U. reassortant strains of avian influenza virus are introduced into regions beneath flyways by migratory birds and then transmitted to commercial free-range flocks or to confined flocks by deficiencies in biosecurity. This was evidenced by the apparently now contained, outbreak of H5N8 HPAI in commercial flocks in South Africa although the virus persists in free-living birds. Incident cases in the E.U., Asia and North Africa should be a warning to U.S. producers during the fall of 2018 since the risk of infection necessitates enhanced and effective containment. An outbreak of low-path H7N1 AI was diagnosed in a turkey flock in Stanislaus County, CA. in early September. Previous sporadic outbreaks in counties each with one affected flock in Missouri (turkeys) and Texas (broiler breeders) were eligible for export by mid-June. There is a presumption that migratory waterfowl cease shedding AI virus by the first week of April. Enhanced biosecurity is however still indicated under the Central and Mississippi flyways. Flocks allowed outside access during periods when migratory birds are shedding virus are vulnerable to infection. A resumption of migration will occur in the Fall.














































































































































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