The EIC has elected to break down costs to 1st and 2nd cycles reflecting May costs. This has complicated comparisons with previous data which aggregated all egg production. Accordingly values have been provided in this report for the first cycle which represents 70 percent of all U.S. output.
The USDA blended egg price in May 2015 at 128.4 cents per dozen, was 4.3 cents per dozen higher than in March 2015 and 48 cents per dozen higher than in April. The May figure should be compared to 92.6 cents per dozen in the corresponding month in 2014.
There was an 11.4 percent decrease in feed cost expressed as a component of the first cycle production cost per dozen over the 5-regions monitored by the USDA, attaining 33.07 cents per dozen in May compared to 34.99 cents per dozen in March. Year to date feed cost amounted to 34.86 cents per dozen for the first cycle. Taking both cycles into consideration weighted average feed cost was calculated to be 33.86 cents per dozen in May. The average feed cost in 2014 was 43.2 cents per dozen. The average monthly feed cost during 2013 was considerably higher at 50.12 cents per dozen reflecting the drought-affected crop of 2012.
Combining data from the USDA and the University of California, producers recorded a positive margin of 67.38 cents per dozen at farm level for the first cycle in May 2015 compared to an equivalent value of 60.86 cents per dozen in March 2015. The margin in May corresponded to a value of 141 cents per hen. Farm profit for the first five months of 2015 amounted to a monthly average of 42.34 cents per dozen or $4.32 per hen. For 2014, average ex-farm contribution was 33.9 cents per dozen with all months positive. The contribution per hen in 2014 was $7.89. During 2013, a monthly algebraic average of 15.3 cents per dozen was attained.
The simple average price of feed over the 5-regions decreased by 5.5 percent in May compared to March. The May 2015, University of California 5-Region value attained $212.69 per ton. The Southeast recorded the highest cost among regions at $256.05.The average figure includes ingredients plus milling ($10/ton) and delivery ($3/ton). An 8.2 percent decrease in the price of soybean meal from $390.08 per ton to $357.93 per ton in March was a contributory factor resulting in a lower feed cost. Corn decreased by 4.7 percent from $165.84 per ton in March to $157.94 per ton in May. There was a $74 per ton differential in corn price between the Midwest and the Southeast in May. Average feed cost during 2012 was $315.80 per ton compared to $300.80 for 2013. Average feed cost per dozen for 2014 was 43.1 cents per dozen with an average cost for feed of $259.10 per ton. Feed price will continue to be the major factor driving production cost and hence margin. Each $10 per ton difference in feed cost represents 1.75 cents per dozen.
Average total nest-run production cost in May 2015 for 6-regions was 61.12 cents per dozen. Production costs during May ranged from 56.29 cents per dozen in the Midwest up to 77.04 cents per dozen in California which was higher than the Midwest region by 20.8 cents per dozen. The differential in feed cost between the traditional high (West) and low-cost (Midwest) regions attained 7.5 cents per dozen in May.
Retail egg prices as determined by the Department of Commerce for April 2015 averaged 206.5 cents per dozen, down 2.3 cents per dozen or 1.1 percent from seasonally lower values in March 2015. Shelf prices in April did not reflect the onset of mortality which commenced in mid-April and initially was confined to in-line breaking complexes. This situation has changed as the supply chain for table eggs is now being filled with product carrying a higher price. This reflects the disparity between total demand for liquid and table eggs compared to the production capacity which has been reduced by 10 to 12 percent with corresponding diversion from table eggs to breaking. Where previously the liquid and shell egg markets existed as separate entities with approximately 100 million and 200 million hens respectively, price driven by post-HPAI demand has effectively merged egg production into a single market. The retail values for commodity eggs in the region of 206.5 cents per dozen in April 2015 should be compared with a monthly average of 201.9 cents per dozen for 2014, 191.0 cents per dozen for 2013; 188.9 cents per dozen for 2012 and 194.7 cents per dozen in 2011.
According to USDA-NASS data, flocks above 30,000 hens, representing 97.4 percent of the U.S. total, amounted to 295.9 million hens on May1st 2015. The averages for 2014, 2013 and 2012 were 303.0, 289.1 and 285.3 million hens respectively. The advent of HPAI with unprecedented mortality has invalidated all models projecting future flock sizes and prices. Accordingly predictions of price and hen numbers through the remainder of 2015 or until the epornitic is controlled would be speculation.
The total in-molt and post-molt population of hens in the 5-Regions monitored by the USDA remained fairly constant at 20.7 percent in May 2015 compared to the previous three months. This situation is expected to change as there will be an increased demand for pullets to replace 45 million hens depleted in flocks producing table-egg and egg-liquid product and for the 4 million pullets lost to date from HPAI. This requirement will be over and above the 18 million pullets required each month to maintain a flock level of 300 million hens. The inability of existing hatcheries to supply extra chicks over the short and intermediate term and the time-related biological restraints of rearing will dictate retention of a high proportion of hens through the second cycle as cage capacity will outstrip availability of replacements. It is also possible that some Midwest producers who reduced stocking density to conform to California cage requirements may revert to 67 inches2 per hen using second or even third-cycle flocks to satisfy demand at high prices justifying this strategy.
Slaughter of hens under USDA-FSIS inspection attained 6.0 million in April as flocks continued to be depleted after Easter sales. Regular mortality and alternative methods of flock disposal including landfills, rendering and shipment of live hens to Canada, account for the majority of depletion amounting to an average of 12 to 13 million hens per month. Again with longer cycles and additional molting the number of hens slaughtered will decline through the remainder of 2015.
Average rate of lay attained 79 percent in April as new pullets transferred in late February and early March achieved peak production. Average production reflects the balance between placement of pullets, their ages and the rate of depletion of flocks or retention of molted hens for a second cycle. Average flock production will decline as weighted age advances with retention and molting of older flocks.
According to USDA-FAS data, 540 thousand cases of shell eggs were exported in April 2015 representing 2.7 percent of total production. North America (78.8 percent of exports) and East Asia (17.7 percent), comprised the major importing regions.
Reports from Mexico confirm that the HPAI continues to be efficiently suppressed applying vaccination, contributing to an adequate domestic supply supplemented from the U.S. Both Canada and Mexico have imposed embargos on states with confirmed HPAI.
Exports of egg products in April 2015 represented 2.0 percent of U.S. output with North America (52.1 percent of exports), Asia (32.2 percent) and the EU (8.9 percent ) comprising the three largest importing regions. Due to the shortage of breaking stock and idling of large in-line units, exports will be curtailed. The USDA is allowing importation of pasteurized liquid from the Netherlands to compensate for deficiencies in supply to bakeries and food service customers.
Collectively, exports in April 2015 represented the equivalent of approximately 12.7 million hens in production during the month, attaining 942 thousand case-equivalents. This was a 4.8 percent decrease compared to 990 thousand case equivalents shipped in March 2015.
MAY 2015 STATISTICS
COSTS & REVENUE
Parameter MAY 2015 MARCH 2015
6-Region Cost of Production ex farm (1st Cycle) 61.12 c/doz 63.39 c/doz
Low 56.29 c/doz (MW) 57.93c/doz (MW)
High 77.04 c/doz (CA) 79.21 c/doz (CA)
Components of 6-Region 1stCycle Cost of Production:-
MAY 2015 MARCH 2015.
Feed 33.07c/doz 37.32 c/doz
Pullet depreciation 10.80 c/doz 9.58 c/doz
Labor 4.00 c/doz 4.00 c/doz
Housing 5.30 c/doz 5.30 c/doz
Miscellaneous and other 7.85 c/doz (adjusted March ‘15) 7.85 c/doz
Ex Farm Contribution according to USDA values reflecting costs for the 1st Cycle in May:-
128.40 cents per dozen1- 61.02 cents per dozen = 67.38 cents per dozen (March 124.07 cents per dozen – 64.05 cents per dozen = 60.02 cents per dozen.)
Note 1: USDA Blended egg price
MAY 2015 MARCH 2015
USDA ex-farm Price (Large) 128.4c/doz 124.1 c/doz
Warehouse/Dist. Center 136.2c/doz 149.8 c/doz
Store delivered 141.7c/doz 154.7 c/doz
Dept. Commerce retail 206.5 c/doz (April.) 208.8 c/doz (Feb.)
5-Region Layer Feed Cost
Layer Feed Cost (Average) $212.69/ton $225.03/ton
High $256.05/ton (SE.) $266.93/ton (SE.)
Low $186.48/ton (MW) $195.37 /ton (MW)
Differential $ 69.57/ton $ 71.56/ton
(equivalent to 17.7 cents per dozen)
Pullet Cost (19 weeks) $3.75 $3.84
VOLUMES OF PRODUCTION
Parameter MAY 2015 MARCH 2015
Egg-strain eggs in incubators 48.02 million (May) 44.46 million (March)
Pullet chicks hatched 24.82 million (April) 21.39 million (Feb.)
Pullets to be housed in 5 months 18.00* million (Sep.) 19.30 million (July)
Estimated National Flock, Total hens on 1st Month 295.5* million (May) 304.7 million (Feb.)
Proportion of flock over 72 weeks 21.7% (April 2015)
No. of hens under 72 weeks 231*million (April 2015)
5-Region proportion of molted hens 20.3% 20.4%
High (CA.) 36.0% (CA) 35.0%
Low (NE) 1.1% (NE) 3.5%
Hens processed under FSIS inspection 6.0 million (April) 5.7 million (Feb.)
Eggs produced 7.11 billion (April) 6.61 billion (Feb.)
Table-egg hens in flocks over 30,000 (97.4% of total U.S.) 292.0* million (April) 297.5million (Feb.)
“Top-6” States hen population (USDA) 162.1* million (Jan.) 165.3 million (Feb.)
Proportion of U.S. Total by state, 2015*
*(over 30,000 hen flocks)
STATE APRIL 2015 FEBRUARY 2015 Proportion by region (Feb. 2015.)
Iowa 18.8% 19.7% MW 53.2%
Ohio 10.6% 10.1% NE 10.4%
Indiana 8.6% 8.7% SE 11.0%
Pennsylvania 8.% 7.8% SC 10.1%
California 4.3% 4.3% CA 4.3%
Texas 5.0% 5.0% NW 3.1%
(Values rounded to 0.1%)
(It is possible that by mid June that Iowa is no longer the leading egg state by hen numbers)
Rate of Lay, weighted hen-week (USDA) 79.0% (April) 77.5% (Feb.)
Projected USDA-ERS 2014 U.S. per capita annual consumption revised due to HPAI 260.3*eggs
*(-3.0% increase from 2014 actual)
*Subject to revision as a result of losses attributed to HPA
Eggs broken under FSIS inspection (million cases) April 2015 6,061 February 2014 5,746
Cumulative proportion of total eggs 30.8% 31.6%
Parameter Quantity Exported
Shell Eggs (thousand cases) April 2015 540 February 2015 491
Products (thousand case equivalents) April 2015 402 February 2015 436
Total (thousand case equivalents) April 2015 942 February 2015 927
*Representing 4.7% of National production in April 2015