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American Egg Board Financials, Fiscal 2020

04/27/2021

The American Egg Board (AEB) released the Annual Report for Fiscal 2020 outlining programs, achievements and finances. The AEB posted total assets of $10.9 million, down $1.58 million from Fiscal 2019 attributed mainly to a $1.4 million reduction in cash and certificates of deposit.  The decrease was due to the use of cash to offset the $4.18 million excess of expenses over revenue in 2019. Deficits over previous years have resulted in a decline in equity amounting to $2.47 million from 2019 to 2020.

 

Total revenue decreased by $5.7 million from 2019 to $23.7 million in 2020.  The major contributor to the reduction was the decrease in interest income associated with lower rates and a lower holding of certificates of deposit. 


Emily Metz CEO AEB

Total program expenses were reduced by 9.9 percent to $24.94 million.  Consumer Marketing expenditure was reduced by 22.1 percent to $12.6 million with decreases in the three components, Consumer Marketing, Industry Programs, and State Support.  Market Development was relatively stable with a 1.4 percent decline to $7.06 million with increases in Food Service activities offset by reductions in Egg Product Marketing, Exports and Eggs in Schools justified by COVID restrictions. 

 

Total administrative expenses amounted to $1.2 million representing 5.1 percent of revenue.  This compares favorably to fiscal 2019 with an expenditure of $1.6 million or 6.3 percent of revenue.  The difference was attributed to the lower cost of Board meetings using zoom compared to in-person attendance.  Based on the inordinately large Board, the use of remote meetings should be considered for subsequent years as the saving represented $390,000 or close to a third of the administrative expenses category.

 

The important question is how the individual programs including Consumer Marketing, Market Development and Nutrition actually contributed to increased consumption, thereby benefitting the Industry.  This will be the challenge facing the management and the Board as encompassed in the recently devised Strategic Plan.  Egg consumption in 2017 was 282.1 per capita.  In 2021 it is estimated that consumption will increase to 288.2 eggs, a difference of 6.1 eggs or approximately 1.2 percent per year over the period during which approximately $120 million was expended on programs.  We do not know what consumption may have been without the AEB and its activities, given competition from other foods. It is evident that to maintain the confidence and support of the industry, quantitative increases in demand will be required. Since assessment income represents over 99 percent of revenue, it will be incumbent on management to justify programs that will collectively impose a cost of 0.3 cents per dozen over 8.3 billion dozen in 2021.