Egg Industry Statistics and Reports

      

JUNE MARGINS SOAR FOLLOWING MIDWEST FLOCK DEPLETIONS

Jul 17, 2015
    

Due to pressure of work associated with the onset of H5N2 Highly Pathogenic Avian Influenza in late April, the Egg Industry Center was unable to circulate a report in May covering USDA data for April. Comments supplementing the production summary tables for the latest series reflecting May and June statistics and prices made available by the EIC on July 15th 2015 are tabulated together with comparison values from the June 5th posting on EGG-CITE.

It is emphasized that due to the rapidly moving situation and continuing losses through mid-June, the USDA figures for May and June, as applicable may not represent the relevant numbers of hens in production nor the prices obtained for products. The current report however will serve as a basis from which comparisons can be made in subsequent months. EGG-CITE has reported on USDA data documenting egg prices each week concurrent with outbreaks impacting flocks in Iowa, Nebraska, Wisconsin and Minnesota, producing mainly for the egg-liquid segment of the Industry.

It is emphasized that due to the rapidly moving situation and continuing losses through mid-June, the USDA figures for May and June, as applicable may not represent the relevant numbers of hens in production nor the prices obtained for products. The current report however will serve as a basis from which comparisons can be made in subsequent months. EGG-CITE has reported on USDA data documenting egg prices each week concurrent with outbreaks impacting flocks in Iowa, Nebraska, Wisconsin and Minnesota, producing mainly for the egg-liquid segment of the Industry.

As of July 17th 2015 the USDA-APHIS documented the loss of approximately 38 million hens and 3 million pullets representing 12 percent of all hens in flocks over 30,000 birds and 6 percent of rearing pullets. The loss has been disproportionate in the egg-liquid segment of the industry with an estimated 33 percent of the supply flock dead or euthanized, principally in large in-line breaking complexes.   States with confirmed cases in large (over 300,000 hen) egg-producing flocks comprised Iowa (7 complexes); Nebraska (5) Minnesota (3) and South Dakota (1)

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 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 June 2015 at 172.1 cents per dozen, was 43.7 cents per dozen higher than in May 2015 and 48.0 cents per dozen higher than in April, reflecting Easter sales. The June figure should be compared to 85.9 cents per dozen for the corresponding month in 2014.
  • There was a1.9 percent increase in feed cost expressed as a component of the first cycle production cost per dozen over the 5-regions monitored by the USDA, attaining 33.70 cents per dozen in June compared to 33.07 cents per dozen in May. Year-to-date feed cost amounted to 34.66 cents per dozen for the first cycle. Taking both cycles into consideration weighted average feed cost was calculated to be 37.45 cents per dozen in June. 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 110.36 cents per dozen at farm level for first cycle flocks in June 2015 compared to an equivalent value of 60.62 cents per dozen in May 2015. Farm profit for the first six months of 2015 amounted to a monthly average of 53.69 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 attained.
  • The simple average price of feed over the 5-regions increased by 1.9 percent in June compared to May. The June 2015, University of California 5-Region value attained $216.74 per ton. The Southeast recorded the highest cost among regions at $250.19.The average figure includes ingredients plus milling ($10/ton) and delivery ($3/ton).  A 2.4 percent increase in the price of soybean meal from $357.93 per ton in May to $364.51 per ton in June was a contributory factor resulting in a higher feed cost. This escalation was exacerbated by a 2.4 percent increase in the cost of corn from $157.97 per ton in May to $161.87 per ton in June. There was a $70.42 per ton differential in corn price between the Midwest and the Southeast in June. 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 June 2015 for 6-regions was 61.87 cents per dozen.  Production costs during June ranged from 56.25 cents per dozen in the Midwest up to 79.23 cents per dozen in California which was higher than the Midwest region by 23.0 cents per dozen. The differential in feed cost between the traditional high (West) and low-cost (Midwest) regions attained 9.5 cents per dozen in June.
  • Retail egg prices as determined by the Department of Commerce for May 2015 averaged 196.2 cents per dozen, down 10.3 cents per dozen or 4.9 percent from seasonally lower values in April 2015. Shelf prices as determined in May did not reflect the onset of mortality which commenced in mid-April and the differential between wholesale and retail prices was buffered by inventory. Mortality was initially 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 of shell eggs as driven by post-HPAI demand has effectively merged all egg production into a single market. The retail values for commodity eggs at 196.2 cents per dozen in May 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, the estimate for flocks above 30,000 hens, representing 97.4 percent of the U.S. total, amounted to 275 million hens on June1st 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 would be speculation and would assume no further outbreaks in the Fall.
  • The total in-molt and post-molt population of hens in the 5-Regions monitored by the USDA remained fairly constant at 19.9 percent in June 2015 compared to the previous three months. This situation is expected to change as there will be an increased demand for pullets to replace 28 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 4.9 million in May, a reduction of 1 million from April as flocks were retained to take advantage of higher prices. 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 78 percent in May as new pullets transferred in late March and early April 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 more molting of older flocks.
  • According to USDA-FAS data, 352 thousand cases of shell eggs were exported in May 2015 representing 1.9 percent of total production.  North America (77.4 percent of exports) and East Asia (22.5 percent), comprised the major importing regions.

Reports from Mexico confirm that their HPAI continues to be efficiently suppressed applying vaccination, contributing to an adequate domestic supply, supplemented from the U.S. Ironically Mexico has aspirations of shipping breaking-stock eggs from four states declared by SENASICA to be free of END to the U.S. Both Canada and Mexico have imposed embargos on U.S. states with confirmed HPAI.

  • Exports of egg products in April 2015 represented 2.0 percent of U.S. output with North America (39.5 percent of exports, was 52.1 in April), Asia (37.4 percent) and the EU (11.3 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 will allow importation of pasteurized liquid from the Netherlands to compensate for deficiencies in supply to bakeries and food service customers.
  • Collectively, exports of shell eggs and products in May 2015 represented the equivalent of approximately 9.9 million hens in production during the month, attaining 738 thousand case-equivalents. This was a 21.7 percent decrease compared to 942 thousand case equivalents shipped in April 2015.
  • Further declines in exports are anticipated. The net export volume (if any) will become apparent at the beginning of August when values for June trades are released.

 

JUNE 2015 STATISTICS

COSTS & REVENUE                                                                                         

Parameter                                                                                               MAY 2015                       JUNE 2015

6-Region Cost of Production ex farm (1st Cycle)                          61.12 c/doz                 61.74 c/doz

                Low                                                                                          56.29 c/doz (MW)      56.23c/doz  (MW)               

                High                                                                                          77.04 c/doz  (CA)        79.23 c/doz (CA)         

Components of 6-Region 1stCycle Cost of Production:-

                                                                       MAY 2015                                           JUNE 2015.

                Feed                                              33.07c/doz                                          33.70 c/doz

                Pullet depreciation                     10.80 c/doz                                         10.89 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 JUNE:-

                                              172.1 cents per dozen1- 61.74 cents per dozen = 110.36 cents per dozen                                   (May 128.40  cents per dozen – 61.02 cents per dozen =  60.02 cents per dozen.)

Note 1:  USDA Blended egg price

 

 

                                                                                                                     MAY 2015                  JUNE 2015

USDA     ex-farm Price (Large)                                                                 128.4c/doz                172.1 c/doz               

                Warehouse/Dist. Center                                                          136.2c/doz                223.8 c/doz      

                Store delivered                                                                             141.7c/doz                229.3 c/doz

       

Dept. Commerce retail                                                                          206.5 c/doz  (April.)   196.2 c/doz (May.)

 

 

5-Region Layer Feed Cost 

Layer Feed Cost                (Average)                                                                   $212.69/ton                 $216.74/ton

                High                                                                                           $256.05/ton (SE.)        $250.19/ton (SE.)

                Low                                                                                               $186.48/ton (MW)      $186.14 /ton (MW)

               Differential                                                                            $  69.57/ton                  $  64.05/ton

                                                                                                                  (equivalent to 16.3 cents per dozen)

 

Pullet  Cost   (19 weeks)                                                                            $3.75                                $3.78


VOLUMES OF PRODUCTION                                                                           

 

Parameter                                                                                       MAY 2015                        JUNE 2015

 

Egg-strain eggs in incubators                                                 48.02 million  (May)          47.48 million (June)

Pullet chicks hatched                                                               24.82 million  (April)         23.82 million (May)            

Pullets to be housed in 5 months                                         18.00* million (Sep.)         20.5 million (Oct.)

 

Estimated National Flock, Total hens on 1st Month            295.5* million  (May)         270.6*million (June.)                              

Proportion of flock over 72 weeks                                                               21.7%            (April 2015)

No. of hens under 72 weeks                                                                     235*million      (April 2015)                               

5-Region proportion of molted hens                                                            20.3%                                19.9%                  

                High                                                                                          (CA.) 36.0%                        (CA)   33.5%     

                Low                                                                                            (NE)    1.1%                        (NE)      2.8%

 

Hens processed under FSIS inspection                                              6.0 million (April)       4.9 million (May)    

 

Eggs produced                                                                                       7.11 billion (April)     6.86 billion  (May)

 

 Table-egg hens in flocks over 30,000 (97.4% of total U.S.)           292.0* million (April)        275.2*million (May)

“Top-6”  States hen population (USDA)                                     162.1* million  (April)      150.5*million (May)

              

Proportion of U.S. Total by state, 2015*                                                                    

*(over 30,000 hen flocks)

                   STATE                            APRIL 2015          MAY 2015                                  Proportion by region (May 2015.)

               Iowa                          18.8%                 15.6%                                              MW     50.7%

               Ohio                           10.6%                11.2%                                               NE       11.0%

               Indiana                       8.6%                    9.3%                                               SE        11.5%

               Pennsylvania             8.%                      8.5%                                               SC        10.5%

               California                   4.3%                    4.6%                                               CA         4.6%                     

                Texas                           5.0%                   5.4%                                               NW        3.2%

                 (Values rounded to 0.1%)

 

Rate of Lay, weighted hen-week (USDA)                                                       79.0% (April)      78.1% (May)                                                                                                                  

 

Projected USDA-ERS 2014 U.S. per capita annual consumption revised due to HPAI         248.9*eggs

                                                                                                                         *(5.5% decrease from 2014 actual)                                                                                                                                                                      

*Subject to revision as a result of losses attributed to HPAI

 

Eggs broken under FSIS inspection (million cases)     April 2015    6,061     May 2014  5,746                               

Cumulative proportion of total eggs                                                   30.8%                        30.0%

 

EXPORTS

Parameter                                                                                                               Quantity Exported 

Exports:-                             

Shell Eggs (thousand cases)                                                      April 2015        540        May 2015    353       

                                                                                            

Products (thousand case equivalents)                                   April 2015         402        May 2015    385          

                                                                                

 

                                                               

Total       (thousand case equivalents)                                    April 2015         942        May 2015   738

                                                              

  *Representing 4.7% of National production in May 2015