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USDA Weekly Egg Price and Inventory Report, March 8th 2017

  

Mar 10, 2017

    

OVERVIEW

According to the USDA Egg Market News Report (Vol.64: No. 10) posted on March 6th Midwest-wholesale prices for Extra Large and Large remained stable this past week representing the lowest values in 2017. The progression of prices during 2017 is depicted in the USDA chart reflecting three years of data, updated weekly.

  

The latest USDA Egg Market News Report documented a USDA Combined Region value of $0.56 per dozen delivered to warehouses. This price lags Midwest Weekly values by one week, and is compared to a trailing 16-month peak price of $2.20 per dozen in late November 2015.  The USDA Combined range for Large, in the Midwest was $0.50 per dozen. At the high end of the range, the price in the South Central Region, attained $0.59 per dozen. The current USDA Combined Price was approximately 70 cents per dozen below the three-year average. During the first Quarter of 2016 the average was inflated by the rise in prices attributed to the post-HPAI shortage of all eggs.

Hen numbers this week remained at a relatively stable but high level relative to demand attaining approximately 313.4 million in production. Hens in lay increased from 303 million in early December 2016. For the past week the number of hens increased by 0.1 million. The total egg-flock comprises 320.5 million including hens in molt and small flocks. Generic shell-egg stock decreased by 3.2 percent demonstrating an improvement in the ongoing imbalance between demand and production. Dried-egg inventory of 30.1 million pounds as of January 31st is extremely high, as is the National stock of frozen egg products at 36.9 million pounds on January 31st.   

  

INVENTORY

 Cold storage stocks in selected regions on February 20th 2017 amounted to 3.161 million pounds, 5.1 percent above the stock of 3.009 million pounds during the week of February 1st. 2017.

The latest monthly USDA Cold Storage Report released on February 23rd documented a total stock of 36.913 million pounds of frozen egg products on January 31st 2016. This was down 12.4 percent from January 31st 2015. Approximately 85 percent of inventory comprised the categories of “Whole and Mixed” (35.7 percent) and “Unclassified” (49.7 percent).

The national stock of generic shell eggs on March 6th was down by 3.2 percent this past week, compared to a 5.6 percent increase in inventory during the previous week. Four of the six regions showed decreases in inventory. The Midwest Region was down 2.5 percent compared to the previous week to 380,500 cases. This region was followed in decreasing order of stock level by the Southeast Region down 5.2 percent to 287,200 cases; the South Central Region increased by 0.6 percent to 256,600 cases; the Southwest Region up by 1.2 percent to 177,200 cases, the Northeast Region down by 10.7 percent to 117,100 cases and the Northwest down 6.5 percent to 116.900 cases

The total USDA Six-Area stock of commodity eggs comprised 1,642,800 cases, of which 81.3 percent were shell eggs. The inventory of breaking stock was up 2.7 percent to 307,400 cases. The relatively stable price for breaking stock this week reflects the availability of eggs from both mature and young flocks in relation to the demand for generic eggs.

Specialty egg inventory was down 4.2 percent to 167,400 cases with organic stock comprising 32.9 percent of inventory. 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 11.2 percent, or 31 cents per dozen to $3.08 per dozen while USDA Certified Organic decreased by 13.8 percent or 63 cents per dozen to $3.91 per dozen, narrowing the price differential to $0.83 per dozen (was $1.77 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 latest monthly USDA Cage-free Hen Report released March 6th the number of hens held in other than conventional cages during February 2017 was unchanged for organic and increased 3.8 percent for cage-free flocks. It is assumed that hen populations are determined quarterly. The non-confined segments comprised:-

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

Total U.S. flock held for cage-free production            =  24.4 million   (was 23.5 million, October through January)

Total U.S. non-caged flock                                         = 38.5 million (12.4 percent of a nominal 310 million flock but 19.3 percent of a nominal flock of 200 million held for shell-egg production)                                                                                                                    

For the week ending March 4th eggs processed under FSIS inspection increased 2.3 percent from the previous week to a level of 1,536,857 cases. The proportion of eggs broken by in-line complexes reached 55.4 percent, a decrease from 56.0 percent last week. During the corresponding week in 2016 in-line breakers processed 45.2 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 March 8th increased to a range of 24 to 26 cents per dozen. The price of checks remained at 11 to 13 cents per dozen representing a throw-away price well below the average cost of production for nest-run, estimated by the EIC at 60 cents per dozen for January 2016.

 

PRODUCTION AND PRICES

The USDA Egg Market News Reports released on Monday 6th March 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

  50-53 cents per dozen

    Unchanged

Large

  48-51 cents per dozen

    Unchanged

Medium

  40-43 cents per dozen

    Unchanged

Certified Organic EL

275-310 cents per dozen

    Unchanged

Central States Breaking Stock

  24-26  cents per dozen

       22-24    + 8.6%

Checks

  11-13  cents per dozen

   Unchanged

 

 

The March 3rd National 5-day rolling average FOB producer prices, for white shelled eggs, with prices rounded to cents per dozen were:-

                                   EL. $0.38(estimate):  L. $0.32: M. $0.22

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

  • USDA Certified Organic, Brown, Large:            $3.91  ($4.54)
  • Cage-Free Brown, Large:                                    $3,08  ($2.77)
  • Omega-3 Enriched Specialty, White, Large:       $2.55  ($2.38)
  • Generic White, Large  Grade AA                        $0.99  ($1.11)
  • Generic White, Large  Grade A (Feature price)      $1.06  ($0.99)                                 

 Retail prices for generic white Large AA were 13 cents per dozen lower this past week, according to the USDA-AMS and contributed to the decline in inventory. 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 January 2017 data posted in the February 16th 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 March 8th 2017 increased numerically by 2.2 points from +0.9 in the last report to +3.1 with a 3.2 percent higher inventory calculated by the USDA-ERS as follows:-  

 

Productive flock

             313,395,584 million hens

Average hen week production

80.4%

Average egg production

251,970,049 million per day

Proportion to shell egg market

                              68.6% (was 69.2%)

Total for in-shell consumption

480,143 cases per day

USDA Inventory

1,335,400 cases

26-week rolling average inventory

4.70 days

Actual inventory  on hand

                           4.56 days

Shell Egg Demand Indicator

+3.1 points (was +0.9 in the last report)

 

 

 

Prices for dried egg products (most frequent price with a range in $ per pound) posted March 3rd were:-

Whole Egg

$1.55-$1.65

 Unchanged

Yolk

$1.95-$2.10

 Unchanged

Spray-Dried White

$2.05-$2.15

 Down $0.05 on low end of range 

Blends

$1.70-$1.75

Unchanged

 

 

The problem of a high inventory of dried egg is apparent from the 140 percent increase to 30.12 million lbs. on January 31st 2016 compared to January 31st 2015.  During the period January 1st through January 28th 2017, dried egg processed under USDA inspection amounted to 11.9 million lbs. (up from 10.1 million lbs. in December 2016), corresponding to approximately a quantity equivalent to three-months inventory.

 

COMMENTS

The H5N8 HPAI situation is still deteriorating in Western and Central Europe involving 23 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 and the isolated case of North American lineage H7N9 infection in a single broiler breeder farm in Tennessee. 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 resulting in depletion of 30 million hens, exceeding that Nation’s flock mortality from a previous outbreak in 2014.