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USDA Weekly Egg Price and Inventory Report, March 29th 2017

  

Mar 31, 2017

    

OVERVIEW

According to the USDA Egg Market News Report (Vol.64: No. 13) posted on March 27th Midwest-wholesale prices for Extra Large and Large increased by 9 and 11 percent respectively following a 25 percent increase the previous week after coming off the lowest values of 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 $0.78 per dozen delivered to warehouses. This price lags Midwest Weekly values by one week, and is compared to a trailing 17-month peak price of $2.20 per dozen in late November 2015.  The USDA Combined range for Large, in the Midwest was $0.73 per dozen. At the high end of the range, the price in the South Central Region, attained $0.81 per dozen. The current USDA Combined Price was approximately 62 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 were relatively stable increasing by 700,000 this past week. The population is still at a high level relative to demand with approximately 310.8 million in production. Hens in lay increased from 303 million in early December 2016. The total egg-flock comprises 317.5 million including hens in molt and small flocks. Generic shell-egg stock increased by 9.3 percent demonstrating fluctuation in the ongoing imbalance between demand and production. Dried-egg inventory of 30.4 million pounds (13,818 metric tons) as of February 28th is extremely high, as is the National stock of frozen egg products at 41.4 million pounds (18,669 metric tons) on February 28th.    

INVENTORY

 Cold storage stocks in selected regions on March 20th 2017 amounted to 3.055 million pounds (1,389 metric tons), 1.9 percent below the stock of 3.115 million pounds during the week of March 1st. 2017.

The latest monthly USDA Cold Storage Report released on March 22nd documented a total stock of 41.071 million pounds (18,669 metric tons) of frozen egg products on February 28th 2017. This was up 9.8 percent from February 29th 2016. Approximately 85 percent of inventory comprised the categories of “Whole and Mixed” (32.1 percent) and “Unclassified” (52.7 percent).

The national stock of generic shell eggs on March 27th was higher by a significant 9.3 percent this past week, compared to a 3.8 percent decline in inventory during the previous week. All six regions showed increases in inventory. The Midwest Region was up a substantial 12.1 percent (an 18.6 percent weekly swing) compared to the previous week at 433,200 cases. This region was followed in decreasing order of stock level by the Southeast Region up 0.7 percent to 293,500 cases; the South Central Region up by 10.8 percent to 252,500 cases; the Southwest Region up by 11.1 percent to 211,100 cases, the Northwest Region up by 15.6 percent to 121,200 cases and the Northeast up by 9.9 percent to 114,000 cases

The total USDA Six-Area stock of commodity eggs comprised 1,692,300 cases, of which 84.3 percent were shell eggs. The inventory of breaking stock was down 4.0 percent to 266,800 cases. The 10 percent increase in the price of 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 up by 3.8 percent to 176,600 cases with organic stock comprising 44.0 percent of inventory, unchanged from 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 fell 7.0 percent, or 20 cents per dozen to $2.68 per dozen (a 16.5 percent swing) while USDA Certified Organic fell by 4.7 percent or 19 cents per dozen to $3.78 per dozen, extending the price differential slightly to $1.10 per dozen (was $1.09 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 for March 6th the number of hens held in other than conventional cages during February was unchanged for organic and increased 3.8 percent for cage-free flocks.:-

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 25th eggs processed under FSIS inspection increased 2.3 percent from the previous week to a level of 1,454,282 cases. The proportion of eggs broken by in-line complexes reached 55.5 percent, a decrease from 57.5 percent last week. During the corresponding week in 2016 in-line breakers processed 47.2 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 on March 27th increased to a range of 36 to 40 cents per dozen. The price of checks increased to a range of 21 to 27 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 February 2016.

  

 

PRODUCTION AND PRICES

The USDA Egg Market News Reports released on Monday 27th 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

  77-86 cents per dozen

    73-76   +9%

Large

  76-85 cents per dozen

    71-74   +11%

Medium

  67-76 cents per dozen

    64-67   +9%

Certified Organic EL

275-310 cents per dozen

    Unchanged

Central States Breaking Stock

  36-40  cents per dozen

       33-36  +10%

Checks

  21-27  cents per dozen

       21-23  +8%

 

 

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

The March 27th 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. $0.68 (estimate):  L. $0.62: M. $0.51

The following advertised retail prices for the week ending March 24th, (compared with the previous week in parentheses) were posted by the AMS for dozen packs:

  • USDA Certified Organic, Brown, Large:            $3.78  ($3.97)
  • Cage-Free Brown, Large:                                    $2.68  ($2.88)
  • Omega-3 Enriched Specialty, White, Large:       $2.34  ($2.25)
  • Generic White, Large  Grade AA                        $1.05  ($0.88)
  • Generic White, Large  Grade A (Feature price)      $0.84  ($1.05)                                 

 Retail prices for generic white Large AA were 17 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. During the past week the retail price of Large AA increased 19 percent in the face of accumulated stock. Hopefully this will not depress consumption.

(See the text, tables and figures in the review of production and prices comprising the report on USDA February 2017 data posted in the March 17th Edition of EGG-CITE. The financial results posted by Cal-Maine Foods for the completed 3rd Quarter of Fiscal 2017 are posted in this Edition)

The USDA-AMS Shell Egg Demand Indicator for March 29th 2017 decreased numerically by 10.2 points from +6.1 in the last report to -4.1 with an 8.4 percent higher inventory calculated by the USDA-ERS as follows:-  

 

Productive flock

310,839,336 million hens

Average hen week production

79.8%

Average egg production

247,528,197 million per day

Proportion to shell egg market

                            69.8% (was 70.5%)

Total for in-shell consumption

479,930 cases per day

USDA Inventory

1,425,500 cases

26-week rolling average inventory

4.67 days

Actual inventory  on hand

                           4.87 days

Shell Egg Demand Indicator

-4.1 points (was +6.1 in the last report)

 

 

 

Prices for dried egg products (most frequent price with a range in $ per pound) posted March 17th were:-

Whole Egg

$1.45-$1.60

Down $0.10 on the low end and down $0.05 on the high end of the range

Yolk

$1.95-$2.05

Down $0.05 on both ends of the range

Spray-Dried White

$2.00-$2.15

 Down $0.05 on the low end of the range

Blends

$1.70-$1.75

Unchanged

 

 

The problem of a high inventory of dried egg is apparent from the 143 percent increase to 30.4 million lbs. on February 28th 2016 compared to February 29th 2016.  During the period January 29th through February 25th 2017, dried egg processed under USDA inspection amounted to 11.8 million lbs. (compared to11.9 million lbs. during January 2017).

 

COMMENTS

The H5N8 HPAI situation may be easing in Western and Central Europe despite confirmation of both LP and HP forms of the infection.in 19 EU Nations. Strain H5N6 in Asia continues to affect both South Korea and Japan with virus introduced by migratory birds and then transmitted to commercial free-range flocks. This should be a warning to U.S. producers since the presence of infection necessitates enhanced and effective biosecurity which cannot be assured with outside access. Recent cases of H7N9 North American lineage LPAI and HPAI in broiler breeder flocks in contiguous areas of Tennessee and Alabama and recently in Northwest Georgia have been quickly contained by depletion.

In early January the USDA and USAPEEC 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. Exports of shell eggs to South Korea will in all probability be curtailed following imposition of embargos.

(SMS 544 -17. March 29th 2017)