The USDA reports data for six regions, respectively comprising the Northeast, South East (Mid-Atlantic), South Central, Midwest, Northwest and California (NW and California combined in some tables)
The EIC elected to break down costs to 1st and 2nd cycles from May onwards. This has complicated comparisons with previous data which aggregated all egg production irrespective of cycle. There were no outstanding differences in variable costs for 1st and 2nd cycle flocks. Accordingly unless otherwise specified, values have been provided in this report for the first cycle which represents 70 percent of all U.S. output.
The USDA ex farm blended egg price in December 2015 at 106.1 cents per dozen, was 56.4 cents per dozen lower than in November 2015 consistent with seasonal trends. The December 2015 value should be compared to 146.7 cents per dozen for the corresponding month in 2014 and 115.1 cents per dozen in December 2013. It is noted that the December 2014 value was inflated in anticipation of shortages predicted before implementation of California Proposition #2 in January 2015.
There was a 1.7 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 31.8 cents per dozen in December compared to 32.3 cents per dozen in November. Feed cost during 2015 amounted to 34.1 cents per dozen for the first cycle. Taking both cycles into consideration, weighted average feed cost (70% first cycle) was calculated to be 34.9 cents per dozen in 2015. The average feed cost in 2014 was 43.2 cents per dozen. The average 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 EIC (formerly from from the University of California) , producers recorded a positive margin of 46.5 cents per dozen at farm level for first-cycle flocks in December 2015 compared to an equivalent value of 67.33 cents per dozen in May 2015 before the onset of mortality. Farm profit for 2015 amounted to a monthly average of 74.5 cents per dozen. For 2014, average ex-farm contribution was 33.9 cents per dozen with all months positive. During 2013, a monthly algebraic average of 15.3 cents per dozen was earned.
The simple average price of feed over the 5-regions decreased by 1.7 percent in December compared to November. The December 2015, EIC 5-Region value attained $204.40 per ton. The Southeast recorded the highest cost among regions at $239.50 per ton. The average figure includes ingredients plus milling ($10/ton) and delivery ($3/ton). A 5.0 percent decrease in the price of soybean meal from $337 per ton in November to $320 per ton in December contributed to a lower feed cost. The 5-region average cost of corn was almost unchanged from November at $161 per ton. There was a $60.40 per ton differential in corn price between the Midwest and the Southeast in December. Average feed cost during 2012 was $315.80 per ton compared to $300.80 for 2013. Average feed cost per dozen during 2014 was 43.1 cents with an average price of 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 USDA-calculated total nest-run production cost for both cycles in December 2015 for 6-regions was 59.77 cents per dozen. Production costs during December ranged from 54.51 cents per dozen in the Midwest up to 75.29 cents per dozen in California which was also higher than the Midwest region by 20.78 cents per dozen. The differential in feed cost between the Southeast and the Midwest regions was 11.3 cents per dozen in December.
Retail egg prices as determined by the Department of Commerce for November 2015 averaged 266.4 cents per dozen, down by approximately 14 cents per dozen from October at 280.8 cents per dozen and 56.4 cents per dozen below the seasonally lower, pre-HPAI four-month average of 210.0 cents per dozen. In November 2014 and 2013 retail prices were 203.2 and 192.5 cents per dozen respectively. Shelf prices as determined in June and July (257.0 cents per dozen) reflected mortality commencing in mid-April and early May. A large rise in price commenced in June when the differential between wholesale and retail prices was no longer buffered by pre-HPAI inventory. Farm price increased from 128.4 cents per dozen in May to 172.1 cents per dozen in June peaking at 204.5 cents per dozen in August.
Although mortality was initially confined mainly to in-line breaking complexes the total availability of eggs to meet both shell egg and liquid markets was constrained by flock losses. The current situation in the supply chain for table eggs is influenced by prices for breaking stock. The decline during the past two months is in part due to gradual re-stocking but also to imports of breaking-stock eggs which peaked at 150 containers per week equivalent to the production of 8.5 million hens. This is reflected in the disparity between total combined demand for liquid and table eggs compared to production capacity which was reduced by 10 percent. Previously the liquid and shell egg markets existed as separate entities with approximately 100 million and 200 million hens in each segment respectively. The price of shell eggs as driven by post-HPAI demand effectively combined all egg availability into a single market. The retail values for commodity eggs at 257.0 cents per dozen in July, 294.3 cents per dozen in August and 296.6 cents per dozen in September 2015 should be compared with the averages of 201.9 cents per dozen in 2014 and 191.0 cents per dozen in 2013.
According to EIC data, the estimated complement of U.S. hens amounted to 282.9 million on December lst 2015 compared to the projection of 313.5 million hens published in March. 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 complicated all models projecting future flock sizes and prices. The EIC estimates a flock size of 298.4 million hens in May 2016 based on pullet chick placements and patterns of depletion.
The total in-molt and post-molt population of hens in the 5-Regions monitored by the USDA declined by 1.2 percent in December 2015 to 20.4 percent of the national flock compared to the 2015 average of 20.6 percent. It is possible that some Midwest producers who reduced stocking density to conform to California cage requirements may revert to 67 inches2 per hen using second-cycle flocks to satisfy demand at high prices to justify this strategy. This situation is expected to change as there will be an increased demand for pullets to replace over 38.5 million hens depleted in flocks producing table-egg and egg-liquid product and for the 3.5 million pullets lost to date from HPAI. This requirement will be over and above the 19 million pullets required each month to maintain a flock level of 305 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 higher proportion of hens through the second cycle as cage capacity will outstrip availability of replacements in areas affected by HPAI. USDA statistics show an encouraging increase of 8.9 million pullets or an increase of 117.0 percent hatched during August through November compared to the corresponding months in 2014. Operators of parent-multiplier farms have increased their collective output by using molting, leased housing and other improvisations to maximize output over the short term. The hatchery supply flock increased from a level of 2.6 million hens in production in September to 2.9 million hens in November with projections showing 2.8 million to 3.0 million over the first five months of 2016.
Slaughter of hens under USDA-FSIS inspection attained 3.8 million in November compared to the pre-HPAI monthly average of 5.99 million hens over the period including January through May 2015. Depending on availability of housing, flocks were retained from June onwards to take advantage of higher prices. Regular mortality and alternative methods of flock disposal including landfills, rendering and shipment of live hens to Canada from approved states, accounts for the majority of depletion amounting to an average of 12 to 13 million hens per month. With longer cycles and additional molting, the number of hens slaughtered should not exceed 4.5 million per month through the first quarter of 2016.
Average rate of lay was almost unchanged from October attaining 77.9 percent in November as new pullets transferred in late September and early October 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 extended retention and molting of older flocks.
According to USDA-FAS data, 279 thousand cases of shell eggs were exported in November 2015 representing 1.5 percent of total production. North America (73.8 percent of exports) and East Asia (21.5 percent) comprised the major importing regions. (See concurrent report on egg exports for January through November in this edition of EGG-CITE)
Both Canada and Mexico imposed regional embargos on U.S. states with confirmed HPAI.
Exports of egg products in November 2015 represented 0.9 percent of U.S. output with North America (46.3 percent of exports) East Asia (42.2 percent) and the EU (1.5 percent, was14.5 percent in October) comprising the principal importing regions. Due to the shortage of breaking stock and reduced capacity through large in-line units, exports were curtailed in 2015 and volume decreased by 33.8 percent attaining 1.6 percent of total U.S. output. The USDA allowed importation of pasteurized liquid from the Netherlands and breaking stock from the EU, Mexico and Canada equivalent to the production of 8.5 million hens, at peak to compensate for deficiencies in supply to bakeries and food service customers.
Collectively, exports of shell eggs and products in November 2015 represented the equivalent of approximately 5.9 million hens (was 6.9 million in October) in production during the month, attaining 436 thousand case-equivalents. This was a decrease compared to monthly average shipments of 960 thousand case equivalents exported over the first four months of 2015 prior to the advent of HPAI.
DECEMBER 2015 STATISTICS
COSTS & REVENUE
Parameter NOVEMBER 2015 DECEMBER 2015
5-Region Cost of Production ex farm (1st Cycle) 60.44 c/doz 59.77 c/doz
Low 55.15c/doz (MW) 54.51c/doz (MW)
High 75.94 c/doz (CA) 75.29 c/doz (CA)
Components of 6-Region 1stCycle Cost of Production:-
NOVEMBER 2015 DECEMBER 2015.
Feed 32.34c/doz 31.78 c/doz
Pullet depreciation 10.70 c/doz 10.62 c/doz
Labor 4.00 c/doz 4.00 c/doz
Housing 5.30 c/doz 5.30 c/doz
Miscellaneous and other 7.86 c/doz (adjusted Nov. ‘15) 7.86 c/doz
Ex Farm Contribution according to USDA values reflecting costs for the 1st Cycle in December:-
106.07 cents per dozen1- 59.56 cents per dozen = 46.51 cents per dozen (Oct. 162.51 cents per dozen – 60.20 cents per dozen = 102.3 cents per dozen.)
Note 1: USDA Blended egg price
NOVEMBER 2015 DECEMBER 2015
USDA ex-farm Price (Large) 162.5c/doz 106.07 c/doz
Warehouse/Dist. Center 192.60c/doz 157.14c/doz
Store delivered 198.15c/doz 162.64 c/doz
Dept. Commerce retail 280.8 c/doz (Oct.) 266.4c/doz (Nov.)
5-Region Layer Feed Cost
Layer Feed Cost (Average) $208.00/ton $204.40/ton
High $243.73/ton (SE.) $239.50/ton (SE.)
Low $179.35/ton (MW) $175.90 /ton (MW)
Differential $ 64.38/ton $ 63.60/ton
(equivalent to 15.9 cents per dozen)
Pullet Cost (19 weeks) $3.71 $3.69
VOLUMES OF PRODUCTION
Parameter NOVEMBER 2015 DECEMBER 2015
Egg-strain eggs in incubators 47.44 million (Nov.) 48.46 million (Dec.)
Pullet chicks hatched 24.99 million (Oct.) 23.02 million (Nov)
Pullets to be housed in 5 months 22.60 million (March.) 20.8* million (Apr ‘16.)
Estimated National Flock, Total hens on 1st Month 279.5 million (Nov.) 279.5million (Dec)
Proportion of flock in or post-molt 21.6% (November)
No. of hens in 1st cycle 221.8 million (November)
5-Region proportion of molted hens 21.6% 20.4%
High (S.Cen.&CA.) 29.0% (CA) 26.8%
Low (NE) 2.1% (NE) 2.6%
Hens processed under FSIS inspection 4.4 million (Oct.) 3.8 million (Nov.)
Eggs produced 6.66 billion (Oct) 6.57 billion (Nov.)
Table-egg hens in flocks over 30,000 (97.2% of total U.S.) 270.3 million (Oct.) 273.1 million(Nov.) (May)
“Top-6” States hen population (USDA) 145.3 million (Oct.) 148.0million (Nov.)
Proportion of U.S. Total by state, 2015
*(over 30,000 hen flocks)
STATE OCTOBER 2015 NOVEMBER 2015 Proportion by region (November 2015.)
Iowa 12.5% 12.1% MW 48.4%
Ohio 11.5% 11.1% NE 11.4%
Indiana 10.5% 10.4% SE 12.2%
Pennsylvania 8.8 % 8.4% SC 11.6%
California 4.9% 4.2% CA 4.3%
Texas 5.8% 5.8% NW 3.4%
(Values rounded to 0.1%)
Rate of Lay, weighted hen-week (USDA) 77.2% (Oct.) 77.9% (Nov.)
Projected USDA-ERS 2015 U.S. per capita annual consumption revised due to HPAI:- 249.1 eggs (-13.9 from 2014)
Projected USDA-ERS 2016 U.S. per capita annual consumption projected to be:- 255.7 eggs (+6.6 from 2015)
Eggs broken under FSIS inspection (million cases) October 2015 5,814 NOVEMBER 2015 5,354
Cumulative proportion of total eggs 31.3% 31.1%
Parameter Quantity Exported
Shell Eggs (thousand cases) October 2015 328 NOVEMBER 2015 279
Products (thousand case equivalents) October 2015 212 NOVEMBER 2015 157
Total (thousand case equivalents) October 2015 540 NOVEMBER 2015 436
*Representing 3.8 percent of National production in November 2015