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Cage-Free Report

06/07/2024

USDA Data On Cage-Free Production For May 2024

 

EGG-NEWS summarizes and comments on data and trends in the monthly USDA Cage-Free Report. This data is correlated and interpreted in the Weekly Egg Price and Inventory Report posted on EGG-NEWS mailed on Fridays each week.

 

The USDA Cage-Free Report covering May 2024, released on June 3rd 2024, documented the complement of hens producing under the Certified Organic Program to be 19.8 million (rounded to 0.1 million), up an unrealistic 3.0 million hens or 18.0 percent from April 2024. This is despite depopulation carried out as a result of HPAI. The number of hens classified as cage-free (but excluding Certified Organic) and comprising aviary, barn and other systems of housing apparently increased by 3.1 million hens or 3.0 percent from April 2024 to 102.3 million, despite flock depopulation. Hen numbers posted by the USDA for May are considered inaccurate in relation to known chick placements and taking into account depopulation figures released by APHIS. Since April 1st 6.1 million hens in the cage-free category have been depleted in addition to 1.9 million hens under the certified organic program.

 

The number of eggs collected is accepted as accurate but since the values for average hen-week  production are unacceptably high this suggests that the denominator reflecting the number of hens is probably incorrect. Alternatively if conventional eggs from cages are deceptively marketed as cage-free, or if cage free eggs are packed as certified Organic, assuming an accurate number of hens over a given month, the apparent hen-week value would be incorrectly high. The respective numbers of hens claimed for organic and cage-free flocks should reflect chick placements 20-weeks previously, HPAI depopulation and age-related depletion and should correspond to monthly supply data and inventory extending over successive quarters. Unlike conventional cage production cage-free hens are not generally molted reducing this possible reason for error in calculating rates of production.

Average weekly production for Certified Organic eggs in May 2024 was up 17.7 percent compared to April 2024 with a questionably high average weekly production of 84.2 percent, down from 84.4 percent in April. Average weekly flock production for cage-free flocks other than Certified Organic was up 2.8 percent in May 2024, also with a questionably high average hen month production of 83.0 percent, down from 83.4 percent. Seasonally, younger flocks increase the availability of cage-free and organic eggs in response to pullet chick placements 20 weeks previously in anticipation of peak seasonal demand periods. May 2024 data may have reflected a presumed higher proportion of younger flocks derived from pullet chicks placed during early January 2024 in anticipation of Easter 2024 demand. Since the proportion of pullets according to housing type is not indicated in the monthly USDA Chickens and Eggs report, it is not possible to assess the relative sizes of flocks producing under the certified organic label or other categories. There is no adequate explanation for the high production rate especially if the stated number of hens is lower than actual, especially with undercounted HPAI flock depopulation. This raises the question of possible illegal diversion of caged eggs into the cage-free or cage-free eggs into the organic supply.

 

 

Flock Size Average

(million hens)

      May

      2024

April

2024

Average

Q1- 2024

Average

Q4 –

2023

Average

Q3 –

2023

Average

Q2

2023

Certified Organic

19.8

   16.7

18.3

 18.7

18.7

18.2

Cage-Free Hens

    102.3

     99.2

  105.7

  106.4

 105.4

 103.2

Total Non-Caged

    122.1

   115.9

  124.0

  125.1

 124.1

 121.4

 

Average Weekly Production (cases)

      April

       2024                   

         May

         2024

Certified Organic @ 84.4% hen/day

   274,937

   323,735    +17.7%

Cage-Free @ 83.2% hen/day

1,605,671

1,650,622      +2.8%

Total Non-Caged @ 83.4% hen/day

1,880,608

1,974,357     +5.0%    

            

 

 

Average Nest Run Contract Price Cage-Free Brown

$1.68/doz.   (Unchanged since September 2023)

May 2024 Range:

$1.35 to $2.35/doz. (unchanged since March 2023)

FOB Negotiated May price, grade-ready quality, loose nest-run. Price range $1.08 to $1.81 per dozen

Average May 2024 Value of $1.51/doz.

($1.93/doz. April 2024)     

 

Average May Advertised National Retail Price   C-F, Large Brown

$3.45/doz. May 2024 (5 regions)

(was $3.45 in April 2024)

USDA Based on 5 Regions, 1,426 stores

 Excluding NW, AK and HI.

 High: $4.39/doz. (SW. 298 stores)

 Low:  $2.82/doz. (SC.  363 stores)

 

 

Negotiated nest-run grade-ready cage-free price for May 2024 averaged $1.51 per dozen, down by 27.8 percent from $1.93 per dozen in April 2024, reflecting higher supply relative to demand. The May 2024 advertised U.S. retail price for cage-free eggs over fine regions (excluding NE., AK. and HI.) was $3.45 per dozen down 2 cents per dozen (0.6 percent) from April 2024 over 1,426 stores. Was 4,473 stores in April confirming fewer promotions in May.  

  

The apparent difference between a recorded average wholesale price of $1.51 per dozen plus a provision of 60 cents per dozen for packaging, packing and transport results in a price delivered to CDs of $2.11 per dozen. The average five-region advertised retail price of $3.45 corresponds to an average retail margin of 63.5 percent (37.2 percent last month) over the average wholesale delivered price. Margins are presumed higher for pastured and other specialty eggs at shelf prices reaching $9.00 per dozen in high-end supermarket chains. Retailers that are maximizing margins especially on Certified Organic, free-range and pastured categories restrict the volume of sales, ultimately disadvantageous to producers.

 

Based on the importance of cage-free production, the USDA-AMS issue the Cage-Free report on volumes and prices at monthly intervals for the information of Industry stakeholders. There is obvious doubt as to the accuracy of individual monthly flock numbers especially when reports show a marked change at the end of a quarter or from the previous month without obvious cause, or alternatively when there is no change in the cage-free flock for sequential months.

 

The June 3rd report has not accounted for flock depopulations as a result of HPAI in May and reflects a population higher than would be attained from early January 2024 pullet chick placements.

 

It is suggested that USDA should consider a quarterly report with more accurate hen data. This would be more useful to the industry for planning and marketing decisions. Price data is available each week from other USDA reports.

 

Subscribers are referred to weekly USDA wholesale and retail prices posted in the Egg Price and Inventory Report in EGG-NEWS E-mailed each Friday. The previous Monthly Cage-Free Report is available under the STATISTICS Tab.