Egg Week

03/24/2021

USDA Weekly Egg Price and Inventory Report, March 24th 2021.

  • Shell inventory was up by 2.8 percent, following a gain of 4.6 percent increase last week. The trend over four weeks confirms increased demand relative to supply with implications for prices extending past the middle of March leading into the April 2nd Easter weekend. Buyers are purchasing in quantity to fill the pipeline before Easter and to preempt subsequent price rises. It is noted that a large number of molted hens continue to return to production. Prices for Extra Large and Large in the Midwest were unchanged this past week and expected to stabilize or fall moderately with lower post-Easter demand with mild oversupply contributing to excess inventory. There is some prospect of a return of the food service sector as liquid and dried-egg prices rise with reopening of the economy despite a plateau in the recent decrease in COVID-19 incidence rates in many regions, offset by optimism over more rapid deployment of vaccine.
  • The U.S. flock in production was up 0.4 million from the week of March 17th to 322.9 million, with about 3.0 million molted hens resuming production within weeks. The Industry has demonstrated beneficial restraint in flock placement.
  • The USDA average Midwest benchmark generic prices for Extra-large and Large sizes were unchanged from the previous week at averages of 135.5 and 133.5 cents per dozen. Mediums were up 3.8 percent at an average of 110.5 cents per dozen. The recent rise in prices reflects increased demand countered by a moderate increase in the U.S. flock in production. Broad demand from retail is evident as pipelines are refilled and food service is restored moving towards Easter. The increase in inventory over three successive weeks and a slowing of the trajectory in the rise in Midwest prices to stability this past week is however of concern.
  • The Midwest price for breaking stock was down by 4.4 percent to an average of 67.5 cents per dozen. Checks in the Midwest were 1.6 percent higher to 62.0 cents per dozen.

 

OVERVIEW

Prices

According to the USDA Egg Market News Reports released on March 22nd 2021 the Midwest wholesale prices for Extra-large and Large sizes were unchanged on average from the previous week as delivered to DCs, attaining 135.5 and 132.5 cents per dozen respectively. Mediums were up 3.8 percent to an average of 110.5 cents per dozen reflecting a stable supply from young flocks that have now matured. Prices should be compared with the USDA benchmark average 6-Region blended nest-run, (excluding provisions for packing and transport) cost of 71.1 cents per dozen in February 2021. The progression of prices during 2021 to date is depicted in the USDA chart reflecting three years of data, updated weekly.

The March 22nd 2021 edition of the USDA Egg Market News Report (Vol. 68: No. 12) documented a USDA Combined Region value rounded to the nearest cent, of $1.44 per dozen delivered to warehouses for the week ending March 19th 2021. This average price lags current Midwest weekly values by one week. The USDA Combined range for Large in the Midwest was $1.34 per dozen. At the high end of the range, price in the South Central Region attained $1.51 per dozen. The USDA Combined Price last week was almost the same as the 3-year average and about 40 cents per dozen above the corresponding week in 2020.

 

Flock Size

According to the USDA the number of producing hens reflecting March 24th (rounded to 0.1 million) was up 0.4 million to 322.9 million. If USDA data is accurate, the producing flock contains molted hens now coming back into production with approximately 5.0 million pullets reaching maturity during the week, offset by flock depletion. The hen population producing eggs is in balance relative to seasonal consumer demand but is depressed by lower industrial and food service off-take. Any number of hens above a range of 315 to 320 million hens in production in late March portends lower than average prices and increased inventory, unless matched by proportional increases in demand. Prices have stabilized despite pre-Easter demand and are following the 3-year average.

The total U.S. egg-flock was down 0.4 million to 327.8 million hens including second-cycle birds and those in molt. The difference of 4.9 million hens (5.8 million last week) between hens in production and total hens is equivalent to 1.5 percent of the national flock, suggesting the disposal of older hens despite return to production of molted hens. In addition young pullets that will commence laying consistent with chick placements in early October 2020.

 

The obvious reduction in hen numbers in Iowa and to a lesser extent among the next three largest egg-producing states that occurred following the onset of COVID-19 in February 2020 has partly reverted to pre-COVID numbers in anticipation of Easter 2021. Chick placement data suggests that 20 to 21 million pullets per month will commence production in the first quarter of 2021. This has implications for prices, given current supply and stock levels in relation to 1st quarter demand into the Easter rise.

 

INVENTORY LEVELS

Cold storage stocks in selected regions on March 22nd 2021 amounted to 2.422 million pounds (1,101 metric tons) of frozen egg products, 1.4 percent more than the level of 2.389 million lbs. on March 1st 2021.

 

The most recent monthly USDA Cold Storage Report released on March 22nd 2021 documented a total stock of 29.3 million pounds (13,335 metric tons) of frozen egg products on February 28th 2021. This value was down 23.6 percent from February 29th 2020. (32.0 million on January 31st 2021). A total of 85.3 percent of combined inventory comprised the categories of “Whole and Mixed” (37.5 percent) and “Unclassified” (47.8 percent). The lack of specificity in classification suggests a more diligent approach is required to enumerate and report inventory by the USDA.

 

Shell Inventory

The national stock of generic shell eggs effective March 22nd 2021 was higher by 2.8 percent after an increase of 4.6 percent last week. The U.S. population of laying hens at this time is influenced by the number of flocks retained after molting coupled with chick placements made in early October. Going forward older hens will assume a larger proportion of the national flock as molted flocks resume production in anticipation of pre-Easter demand.

 

Four of six USDA Regions reported higher stock levels. The regions are listed in descending stock level:-

  • The Midwest Region was down 1.4 percent compared to the previous week to 475,100 cases.
  • The South Central Region, was up 8.0 percent from last week to 366,900 cases
  • The Southeast Region was up 9.6 percent to 309,800 cases
  • The Southwest Region was up 0.1 percent to 151,400 cases.
  • The Northeast Region was down 3.5 percent to 214,300 cases.
  • The Northwest Region was up 3.7 percent to 89,900 cases.

 

The total USDA six-area stock of commodity eggs comprised 1,920,500 cases, of which 83.7 percent were shell eggs (84.3 percent last week). The inventory of breaking stock was up by 7.6 percent to 313,100 cases. The value of breaking stock and hence availability from both mature and young flocks is influenced by the demand for generic shell eggs and contract obligations with breakers. Increased price for shell eggs draws uncommitted product from breaking as denoted by the relevant proportion of production to the shell market and a sharp decline in the inventory of breaking stock with a concurrent increase in price of this category this past week.

 

As of Monday March 22nd 2021 the inventory of other than generic eggs (with previous week in parentheses) comprised:-

  • Specialty category, down 0.9 percent to 54,200 cases. (was up 10.0 % to 54,700 cases)
  • Certified Organic, up 2.1 percent to 96,000 cases. (down 2.0% to 94,000 cases)
  • Cage-Free, up 0.1percent 130,900 cases. (down 5.9% to 130,800 cases)

 

Demand for cage-free product will not increase materially while generic eggs are on the shelf at $1.00 to $1.45 per dozen over the long term. Existing state legislation mandating sale of only cage-free eggs will support most of the anticipated transition from cages but a total change will not be completed by the beginning of 2025, less than 46 months away. With the current proportion of non-caged flocks, cage-free eggs are becoming a commodity in some markets subjected to the same price pressures as generic eggs from caged hens.

 

Demand for cage-free eggs is influenced by the relative shelf prices of the category in comparison with generic white-shelled eggs from caged flocks. At the other end of the price range, consumers will purchase less-expensive brown cage-free product over organic eggs when there is a differential in price greater than about $1.20 per dozen. Similarly, consumers purchase white-shelled generic eggs in preference to brown-shelled cage-free with a differential of over $1.20 per dozen. The need for structured statistically relevant market research on the willingness to pay for attributes such as housing, shell color, GM status and nutritional enrichment is self-evident.

 

RELATIVE PRICES OF SHELL-EGG CATEGORIES

 

The following advertised retail prices for the week ending March 25th 2021, (compared with the previous week in parentheses) were posted by the AMS on March 22nd for dozen packs:

 

USDA Certified Organic, Brown, Large: $3.84 ($3.46)

Cage-Free Brown, Large: $2.39 ($2.54)

Omega-3 Enriched Specialty, White, Large: $2.12 ($2.50)

Generic White, Large Grade AA $1.25 ($0.78)

Generic White, Large Grade A (Feature price) $1.01 ($1.21)

 

The weekly advertised retail price as determined by the USDA-AMS for generic white Large AA last week was sharply up 60.2 percent or $0.47 per dozen to $1.25 per dozen, in line with pre-Easter demand. The price increase will have a minimal impact on demand for this category despite a concurrent small decrease in cage-free brown eggs. The unanticipated mid-January increase in price continued into mid-March. This trend was intensified by inclement weather in the Southwest and the Northeast in mid-February, together with heightened demand for shell eggs as eating-at-home was reinforced by concern over weather, COVID and local restrictions. This trend should be maintained over the proximal two weeks as the normal pre-Easter seasonal purchase pattern continues.

 

During the present week the USDA benchmark-advertised retail price of brown Cage-Free was down 5.9 percent or $0.15 per dozen to $2.39 per dozen. (last week USDA advertised price was $2.54 per dozen). Certified organic was up 11.0 percent or $0.38 per dozen to $3.84 per dozen. The differential in advertised price between cage-free brown and certified organic was $1.45 per dozen ($0.92 per dozen last week). This suggests increased demand for certified organic over cage-free brown during the current week. The differential between advertised price for cage-free brown over generic white was $1.14 per dozen this past week, ($1.76 per dozen the previous week) implying continued demand for generic white over cage-free brown. Preference for cage-free brown over generic white is evident with a price differential lower than $1.20 per dozen. There was no record of advertisements for cage-free white this past week. The differential was $1.04 per dozen dozen in favor of cage-free brown over cage-free white last week although there were only a few data points for this category. Large week-to-week percentage fluctuations can be expected in the stock of specialty and organic eggs based on the small base of these categories.

 

USDA Cage-Free Data

According to the latest monthly USDA Cage-free Hen Report released March 1st 2021, the number of certified organic hens during February 2021 increased 1.2 percent to 17.5 million.

 

 The USDA reported a 2.5 million increase in the cage-free flock from January 2021 to 67.5 million in February, compared to an average of 62.8 million hens in Q4, 2020.

 

The stated population of hens producing cage-free and certified organic eggs in October comprised:-

Total U.S. flock held for USDA Certified Organic production = 17.5 million (17.2 million in Q4 2020).

Total U.S. flock held for cage-free production = 67.5 million (62.8 million in Q4 2020).

Total U.S. non-caged flock = 85.0 million (80.0 million in Q4 2020).

 

This total value represents 26.6 percent of a nominal 320 million total U.S. flock but 37.9 percent of a presumed pre-COVID flock of 224 million producing for the shell-egg market.

 

Processed Eggs

For the processing week ending March 20th 2021 the quantity of eggs processed under FSIS inspection as reported on March 24th 2021 was down 2.6 percent compared to the previous processing week to a level of 1,349,135 cases (1,384,908 cases last week). The proportion of eggs broken by in-line complexes was 56.6 percent (was 54.4 percent last week) denoting a trend from the breaking market to spot sales for uncommitted shell eggs. With lower prices for shell eggs there is a trend to divert non-contracted eggs to breaking from shell sales and vice versa resulting in either a higher or lower proportion of in-line breaking. This past week 73.5 percent of egg production was directed to the shell market, (72.9 percent for the previous week) reflecting higher to stable shell prices over the past three weeks. There is evidence of slight recovery in the food service sector, especially for QSRs, offset by increased demand from baking and eat-at-home. During the corresponding processing week in 2020 (pre-COVID) in-line breakers processed 56.1 percent of eggs broken.

 

For the last available monthly report dated March 6th 2021, yield from 5,561,224 cases (5,722,960 cases last month) denoted a decrease in demand for liquid over the period January 31st 2021 through February 27th 2021. Edible yield was 41.3 percent, distributed in the following proportions expressed as percentages:- liquid whole, 55.2; white, 26.7; yolk 13.8; dried, 4.3.

 

All eggs broken during YTD 2021 attained 15.42 million cases, 19.4 percent less than the corresponding period during 2020.

 

Demand for liquid is still constrained by COVID-19 home-cooking resulting in diversion of breaking stock into the shell market partly balanced by a reduction in hens dedicated to breaking.

PRODUCTION AND PRICES

Breaking Stock

The average price for breaking stock of 67.5 cents per dozen delivered to Central States plants on March 22nd was down 4.4 percent from the previous week over a range of 65 to 70 cents per dozen. Checks were 1.6 percent higher at an average of 62.0 cents per dozen over a range of 59 to 65 cents per dozen. Average revenue for both breaking stock and checks should be compared to the benchmark production cost for nest-run Large, estimated by the USDA at 71.1 cents per dozen during February 2021.

 

Shell Eggs

The USDA Egg Market News Report released on March 22nd 2021 showed unchanged Midwest prices for Extra Large and Large compared to the previous week consistent with the relative balance between production and demand. Mediums were up 3.8 percent. The following table lists the “most frequent” ranges of values as delivered to warehouses*:-

 

Size/Type

Current Week

Previous Week

Extra Large

134-137 cents per dozen

Unchanged

Large

132-135 cents per dozen

Unchanged

Medium

104-117 cents per dozen

102-111 Up 3.8%

Certified Organic EL

275-310 cents per dozen

Unchanged long term

Breaking stock

65-70 cents per dozen

68-73 Down 4.4%

Checks

59-65 cents per dozen

59-63 Up 1.6%

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

 

The March 22nd 2021 Midwest Regional (IA, WI, MN.) average FOB producer prices, for nest-run, grade-quality white shelled eggs, with prices in rounded cents per dozen were unchanged from last week, with the previous week in parentheses:-

  1. $1.26 ($1.26), (estimated by proportion): L. $1.16 ($1.16): M. $0.86 ($0.86)

The March 22nd 2021 California price per dozen for cage-free, California compliant product in cartons delivered to a DC, with the previous week in parentheses:-

  1. $2.02 ($2.02); L. $1.96 ($1.96); M. $1.57 ($1.57)

(See the text, tables and figures and the review of production data and prices comprising the USDA costs for February 2021 and the 2nd Quarter FY 2021 results for Cal-Maine Foods available under the Statistics TAB.)

Shell-Egg Demand Indicator

The USDA-AMS Shell Egg Demand Indicator for MARCH 24th 2021 was down 1.9 points from the last weekly report to -0.2 with a 2.8 percent increase in inventory from the past week as determined by the USDA-ERS as follows:- 

 

Productive flock

322,890,867 million hens

Average hen week production

81.2%(was 81.5%)

Average egg production

262,275,288 million per day

Proportion to shell egg market

73.5% (was 72.9%)

Total for in-shell consumption

 535,809 cases per day

USDA Inventory

1,607,400 cases

26-week rolling average inventory

4.75 days

Actual inventory on hand

4.67 days

Shell Egg Demand Indicator

-0.2 points (was 1.7 on March 17th 2021)

Dried Egg Products

Prices for dried egg products (most frequent price with a range in $ per pound) effective March 19th 2021 were:-

Whole Egg

$2.95-$3.15

Up $0.05 on both ends of the range.

Yolk

$2.20-$2.35

Unchanged

Spray-Dried White

$4.75-$4.95

Unchanged

Blends

$2.75-$2.80

No new quotation

 

USDA has not released a report on dried egg inventory since March 13th 2020 and due to an inability to obtain data from producers, will not issue reports for the immediate future.

 

COMMENTS

There is a presumption that migratory waterfowl commence shedding AI virus during December, ceasing in April. Accordingly, intensified biosecurity is required under the Pacific, Central, Mississippi and Atlantic flyways during periods when migratory birds are potentially shedding. Non-confined flocks are vulnerable to infection. Numerous outbreaks of H5N8 highly pathogenic avian influenza have occurred in recent months in Europe and Asia. There are reports with increasing frequency of shedding H5N8 and other H5 strains by migratory waterfowl. Outbreaks of HPAI are attributed to contact between wild birds and domestic chicken and duck flocks, many of which are on pasture. Most veterinary authorities are advising or mandating flock confinement with the prospect of relaxation in April.










































































































































































































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