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USDA Weekly Egg Price and Inventory Report, January 25th 2016

  

Jan 27, 2017

    

OVERVIEW

According to the USDA Egg Market News Reports posted on January 23rd Midwest-wholesale prices for Extra Large and Large increased by 15 percent this past week. The progression of prices during 2017 is depicted in the USDA chart reflecting three years of data, updated weekly.

  

The USDA Egg Market News Reports released on January 23rd documented a USDA Combined Region value of $0.71 per dozen delivered to warehouses. This price lags Midwest Weekly values by one week, and is compared to a peak price of $2.20 per dozen in late November 2015.  The USDA Combined range for Large, in the Midwest was $0.65 per dozen. At the high end of the range, the price in the South Central Region, attained $0.75 per dozen. The current USDA Combined Price was approximately 49 cents per dozen below the three-year average. In early 2016 the average was inflated by the rise in prices attributed to the post-HPAI shortage of all eggs.

Hen numbers continue to rise relative to demand attaining approximately 308.5 million in production. Hens in lay increased from 303 million in early December 2016. For the past week the number of hens increased by 1.7 million. The total egg-flock is 314 million including hens in molt and small flocks. Generic shell-egg stock increased by one percent reflecting the balance between post-holiday demand and production. Dried-egg inventory of 29.4 million pounds as of December 31st is extremely high, as is the National stock of frozen egg products at 35.8 million pounds.   

  

INVENTORY

 Cold storage stocks in selected regions on January 16th 2017 amounted to 2.982 million pounds, 1.2 percent above the stock of 2.945 million pounds during the week of January 1st. 2017.

The latest monthly USDA Cold Storage Report released on January 24th documented a total stock of 35.821 million pounds of frozen egg products on December 31st 2016. This was down 12.4 percent from December 31st 2015. Approximately 83 percent of inventory comprised the categories of “Whole and Mixed” (31.7 percent) and “Unclassified” (51.4 percent).

The national stock of generic shell eggs was up by 1.0 percent this past week, compared to a 6.8 percent decrease in inventory during the previous week. Three of the six regions showed declines in inventory. The Midwest was up 5.8 percent compared to the previous week to 358.900 cases. This region was followed in decreasing order of stock level by the Southeast which declined by 3.8 percent to 258,400 cases; the South Central Region down by 0.3 percent to 248,600 cases, the Southwest up by 6.2 percent to 165,100 cases; the Northwest up by 0.8 percent to 123,500 cases and the Northeast Region down 5.7 percent to 114,200 cases. 

The total USDA Six-Area stock of commodity eggs comprised 1,607,400 cases, of which 78.9 percent were shell eggs. The inventory of breaking stock was down 5.3 percent to 338,700 cases. The lower price for breaking stock this week reflects the availability of eggs from both mature and young flocks in relation to the falling demand for generic eggs.

Specialty egg inventory was up 5.4 percent compared to a decline of 8.7 percent the previous week, to 174,700 cases with organic stock comprising 47.0 percent of inventory (51.7 percent for the previous week). Recent data suggests a fluctuating build in the stock of USDA Certified Organic product. This is attributed to an apparent trend by consumers to purchase less-expensive brown cage-free product over more costly organic eggs. During the past week the retail price of cage-free brown rose 16.3 percent, or 49 cents per dozen to $3.49 per dozen while USDA Certified Organic increased 4.4 percent, or 17 cents per dozen to $4.02 per dozen, narrowing the price differential to $0.53 per dozen ($0.85 per dozen last week).  Large week-to-week fluctuations can be expected in the stock of specialty and organic eggs based on the small base of these categories.

According to the monthly USDA Cage-free Hen Report for January 9th the number of hens held in other than conventional cages during December was unchanged comprised:-

Total U.S. flock held for USDA Certified production = 14.1 million     (was 13.5 million, October & November)

Total U.S. flock held for cage-free production            =  23.5 million    (was 17.0 million, October & November)

Total U.S. non-caged flock                                         = 37.6 million (12.5 percent of a nominal 300 million flock but 18.8 percent of a nominal flock of 200 million held for shell-egg production)                                                                                                                     

For the week ending January 14th eggs processed under FSIS inspection increased 3.1 percent from the previous week to a level of 1,533,394 cases. The proportion of eggs broken by in-line complexes reached 55.3 percent, a decrease from 58.4 percent last week. The high values in past weeks confirms the extent of restocking large units in Iowa and Nebraska impacted by HPAI in 2015. During the corresponding week in 2015 in-line breakers processed 44.1 percent of eggs including imports, denoting the severe mortality affecting approximately eight large in-line complexes affected by HPAI in 2015. 

The price range for breaking stock delivered to Central plants for the week ended January 14th narrowed to 25 to 27 cents per dozen. The price of checks remained at a range of 12 to 14 cents per dozen  representing a “rock bottom” price well below the average cost of production for nest-run, estimated by the EIC at 59 cents per dozen for December 2016.

 

PRODUCTION AND PRICES

The USDA Egg Market News Reports released on Monday 24th January 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

  75-78 cents per dozen

   65-68   Up 15%

Large

  73-76 cents per dozen

    63-66  Up 16%

Medium

  60-63 cents per dozen

    48-51  Up 24%

Certified Organic EL

275-310 cents per dozen

   Unchanged

Central States Breaking Stock

  26-27  cents per dozen

   25-35  Down 30%

Checks

  12-14  cents per dozen

   Unchanged

 

 

The January 23rd National 5-day rolling average FOB producer prices, for white shelled eggs, with prices in rounded cents per dozen for the past week were:-

                                   EL. $0.62 (est.):  L. $0.59: M. $0.46

The following advertised retail prices for the week ending January 20th, (compared with the previous week in parentheses) were posted by the AMS for dozen packs:

  • USDA Certified Organic, Brown, Large:            $4.02  ($3.85)
  • Cage-Free Brown, Large:                                    $3.49  ($3.00)
  • Omega-3 Enriched Specialty, White, Large:       $2.19  ($2.16)
  • Generic White, Large  Grade AA                        $1.28  ($1.16)
  • Generic White, Large  Grade A (Feature price)      $1.12  ($1.05)                                 

 Retail prices for generic white Large AA were 12 cents per dozen higher this past week, according to the USDA-AMS. In past months retailers have maintained disproportionately high prices at the shelf, taking advantage of low wholesale cost to boost margins. By this strategy, retailers have effectively depressed consumption thereby holding the industry to record-low price levels for generic eggs. 

(See the text, tables and figures in the review of production and prices comprising the report on USDA December 2016 data posted in the January 13th Edition of EGG-CITE now listed under the STATISTICS tab. The financial results posted by Cal-Maine Foods for the completed 2nd Quarter of Fiscal 2017 posted in the December 21st Edition can be retrieved through the SEARCH feature entering “Cal-Maine”

The USDA-AMS Shell Egg Demand Indicator for January 25th 2017 increased numerically by +0.1 points from +8.4 in the last report to +8.5 with a 1.0 percent higher inventory calculated by the USDA-ERS as follows:-  

 

Productive flock

308,589,361 million hens

Average hen week production

80.5%

Average egg production

248,414,435 million per day

Proportion to shell egg market

69.0% (was 68.1%)

Total for in-shell consumption

476,128 cases per day

USDA Inventory

1,268,700 cases

26-week rolling average inventory

4.74 days

Actual inventory  on hand

                4.37 days (was 4.41 days)

Shell Egg Demand Indicator

+8.5 points (was +8.4 in the last report)

 

 

 

Prices for dried egg products (most frequent price with a range in $ per pound) posted January 20th were:-

Whole Egg

$1.55-$1.65

   Unchanged

Yolk

$2.00-$2.10

   Up $0.05 on both ends of the range

Spray-Dried White

$2.10-$2.20

   Down $0.05 on the high end of the range

Blends

$1.70-$1.75

   Unchanged

 

 

The problem of a high inventory of dried egg is apparent from the 179 percent increase to 29.43 million lbs. on December 31st 2016 compared to December 31st 2015.  During the period December 4th through December 31st 2016, dried egg processed under USDA inspection amounted to 10.1 million lbs. (down from 13.8 million lbs. in November), corresponding to approximately a three-month inventory level.

 

COMMENTS

The H5N8 HPAI situation is still deteriorating in Western and Central Europe involving 18 EU Nations. Infection with H5N6 in Asia is affecting both South Korea and Japan with both strains introduced by migratory birds and then transmitted to commercial free-range flocks. This should be a warning to U.S. producers. Possible introduction of AI must be considered during the first Quarter of 2017 necessitating enhanced and effective biosecurity. This is emphasized by the isolation of Eurasian strain H5N2 avian influenza virus from a hunter-killed mallard in Montana in early January. The USDA and USAPEEC have worked with counterparts in South Korea to ship eggs and products to compensate for losses due to the HPAI epornitic which has resulted in depletion of 28 million hens, exceeding the Nation’s flock mortality from a previous outbreak in 2014.