USDA Data On Cage-Free Production For July 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 WeeklyEggPrice and Inventory Report posted on EGG-NEWS mailed on Fridays each week.

The USDA Cage-Free Report covering July 2024, released on August 1^st 2024, documented the complement of hens producing under the Certified Organic Program to be 19.6 million (rounded to 0.1 million), down 0.2 million hens or 0.9 percent from June 2024. This is due to depopulation carried out as a result of HPAI in previous months. The number of hens classified as cage-free (but excluding Certified Organic) and comprising aviary, barn and other systems of housing apparently declined by 0.7 million hens or 0.9 percent from June 2024 to 100.7 million, despite previous flock depopulation and an unexpected high value in June. Hen numbers posted by the USDA for July are questioned as to accuracy taking into account chick placements and depopulation figures released by APHIS.

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 disproportionally high. The respective numbers of hens claimed for organic and cage-free flocks should reflect the net contribution of 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 July 2024 was down 0.9 percent compared to June 2024 with a questionably high average weekly production of 83.8 percent, up from 83.7 percent in June. Average weekly flock production for cage-free flocks other than Certified Organic was down 0.6 percent in June 2024, but with a more reasonable high average hen-month production of 82.5 percent, up from 82.4 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 and June 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.

Negotiated nest-run grade-ready cage-free price for July 2024 averaged $2.27 per dozen, up by 5.1 percent from $2.16 per dozen in June 2024, reflecting presumably lower supply relative to demand. The July 2024 advertised U.S. retail price for cage-free eggs over five regions (excluding NW, AK. and HI.) was $3.30 per dozen up 28 cents per dozen (9.2 percent) from June 2024 over 3,527 stores. This compares with 6,677 stores in June confirming fewer promotions in July.

The apparent difference between a recorded average wholesale price of $2.27 per dozen plus a provision of 60 cents per dozen for packaging, packing and transport, results in a price of $2.87 per dozen delivered to CDs. The average five-region advertised retail price of $3.30 corresponds to an average retail margin of 15.0 percent (9.5 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 issues 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 current report apparently does not account 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.