Egg Monthly

05/09/2022

REVIEW OF APRIL 2022 EGG PRODUCTION COSTS AND STATISTICS.

HIGHLIGHTS

  • April 2022 USDA ex-farm blended USDA nest-run benchmark price was 235.9 cents per dozen, 48.8 percent higher than the March 2022 value of 158.5 cents per dozen. For comparison average USDA benchmark price for 2021 was 84.3 cents per dozen with a range of 58.0 cents per dozen in June to a high of 123.6 in December. Stock levels and prices prior to the onset of flock depletion due to HPAI indicated a relative seasonal balance between supply and demand. Prevailing wholesale prices will be largely dependent on the magnitude of any future flock depletions, retail sales and margins, diversion from the egg-breaking sector and fluctuation attributed to the price discovery system.

 

  • April 2022 USDA average nest-run production cost was 1.2 cents per dozen (1.4 percent) higher than in March 2022 to 84.5 cents per dozen, mainly attributable to a 1.9 percent higher average feed cost per dozen.

 

  • April 2022 USDA benchmark nest-run margin attained a positive value of 151.4 cents per dozen compared to a margin of 74.7 cents per dozen for March 2022.

 

  • March 2022 national flock in production (over 30,000 hens/farm) was down 2.9 percent or 8.7 million hens over a revised February 2022 value of 296.3 million. Approximately 2.5 million hens returned to production from molt in early April together with projected maturation of 24.0 million pullets, with this number offset by depletion of spent flocks. Through the end of April, 29.5 million hens were depleted to control HPAI

 

  • March 2022 pullet chick hatch was up 19.6 percent or 5.0 million from February 2022 to 30.5 million.

 

  • March 2022 exports of shell eggs and products combined were up 24.8 percent from February 2022 to 697,400 case equivalents representing the theoretical production of 10.2 million hens. Decreased exports to South Korea were responsible for the decline in Q3 and Q4 as flocks depleted by HPAI were restored. Canada imported 51.5 percent of egg liquid and shell eggs combined during March 2022 contributing to the increase during March.

 

INTRODUCTION.

Summary tables for the latest USDA April 2022 prices and flock statistics made available by the EIC on May 9th 2022 are arranged, summarized, tabulated and reviewed in comparison with values from the previous April 8th 2022 posting reflecting March 2022 costs and production data.

 

COSTS & REVENUE

 

Parameter

MARCH 2022

APRIL 2022

5-Region Cost of Production ex farm (1st Cycle)1

83.3 c/doz*

84.5 c/doz

Low

80.8 c/doz (MW)

80.8 c/doz (NE)

High

89.4 c/doz (N.West)

93.3c/doz (N.West)

Components of USDA 6-Region 1stCycle nest-run Cost of Production:-

*Adjusted by EIC

Notes: 1. Rounded to decimal of a cent

 

MARCH 2022

APRIL 2022

Feed

52.2 c/doz

53.2c/doz

Pullet depreciation

13.8 c/doz

14.0 c/doz

Labor (estimate)

4.0 c/doz

4.0 c/doz

Housing (estimate)

5.0 c/doz

5.0 c/doz

Miscellaneous and other*

8.3 c/doz

8.3 c/doz

* Adjusted January 2022 and used as a rounding factor

 

Ex Farm Margin (rounded to nearest cent) according to USDA values reflecting APRIL 2022:-

235.9 cents per dozen1- 84.5 cents per dozen = +151.4 cents per dozen

(March 2022 comparison: 158.5 cents per dozen – 83.8 cents per dozen = +74.7 cents per dozen.)

Note 1: USDA Blended egg price

 

 

USDA MARCH 2022

APRIL 2022

Ex-farm Price (Large, White)

158.5 c/doz (Mar.)

235.9 c/doz (Apr.)

Cage-free to packing plant1

138.0 c/doz (Mar.)

169.0 c/doz (Apr.)

Warehouse/Dist. Center

165.5 c/doz (Mar)

270.0 c/doz (Apr.)

Store delivered (estimate)

170.8 c/doz (Mar.)

275.0 c/doz (Apr.)

Dept. Commerce Retail

200.5 c/doz (Feb.)

205 c/doz (Mar.)

  1. Negotiated price nest run

 

MONTH MARCH 2022 APRIL 2022

U.S. Average Feed Cost per ton*

$328.50 $335.09

Low Cost Northeast

$314.18 $314.23

High Cost Northwest

$362.27 $384.45

Differential

$ 48.14 $ 70.22

 

Pullet Cost*

(19 Weeks) $5.19 MARCH 2022 $5.24 APRIL 2022
(16 weeks) $4.49 MARCH 2022 $4.34 APRIL 2022

* Values adjusted by EIC for February 2022

 

VOLUMES OF PRODUCTION

PARAMETER

MARCH 2022

APRIL 2022

Table-egg strain eggs in incubators

55.4 million (Mar.)

57.3 million (Apr.)

Pullet chicks hatched

25.5 million (Feb.)

30.5 million (Mar.)

Pullets to be housed in 5 months

25.7* million (July)

27.5 million (Aug.)

2022 December 1st Flock Projection

324.8* million

319.0 million

National Flock in farms over 30,000 (2021)

305.0* million (Feb.)

296.3 million (Mar.)

National egg-producing flock (2021)

322.6 million (Feb.)

313.1 million (Mar.)

Cage-free flock excluding organic

90.5 million (Mar.)

92.9 million (Feb.)

Proportion of flocks in molt or post-molt

13.8%* (Mar.)

13.6% (Apr.)

Total of hens in flocks over 30,000, 1st cycle (estimate)

 263.7 million (Feb.)

270.5 million (Mar.)

*Forecast prior to HPAI depletions

 

Total U.S. Eggs produced (billion)

7.39 (Feb.)

8.03 (Mar.)

Total Cage-Free hens in production

108.7 million (Jan.)

16.7% Organic

111.1 million (Dec.)

16.4% Organic

“Top-5” States hen population (USDA)1

152.8 million (Feb.)

145.4 (Mar.)

Notes 1. Texas excluded to maintain confidentiality

 

PROPORTION OF U.S. TOTAL HENS BY STATE, 20211

Based on a nominal denominator of 308 million hens in flocks over 30,000 covering 95.0 percent of the U.S complement.

USDA has amended inclusion of specific states in regions and eliminated Texas data to protect confidentiality of Company flock sizes

 

STATE

FEBRUARY ‘22

MARCH ‘22

Iowa

14.5%*

12.9%

Indiana

11.2%

11.5%

Ohio

11.3%

11.7%

Pennsylvania

8.9%

8.9%

Texas (estimate)

6.5% ?

6.5% ?

California

4.1%

4.1%

  1. Values rounded to 0.1%

* Projected prior to March HPAI depletions

 

Rate of Lay, weighted hen-week (USDA) 82.0% MARCH 2022 83.3% APRIL 2022

 

Actual per capita

 

egg consumption 2016:-

 

275.3 (up 19.8 eggs from 2015, HPAI )

Actual per capita egg consumption 2017:- 282.1 (up 6.8 eggs from 2016)
Actual per capita egg consumption 2018:- 287.8 (up 5.7 eggs from 2017)
Revised per capita egg consumption 2019 293.4 (up 5.6 eggs from 2018)
Revised per capita egg consumption 2020 285.4 (down 8.0 eggs from 2019)
Estimated per capita egg consumption 2021 280.5 (down 4.9 eggs from 2020)*
Projected per capita egg consumption 2022 277.8 (down 4.7 eggs from 2021, HPAI)*

*Revised, using data from USDA Livestock, Dairy and Poultry Outlook April 15th 2022 taking into account the decreased demand from the food service sector but presuming an effect from HPAI yet to be finalized.

 

Egg Inventories at beginning of APRIL 2022:

 

  Shell Eggs: 1.95 million cases down 1.1 percent from March 2022.

  Frozen Egg Products: 635,053 case equivalents down 11.9 percent from March 2022

  Dried Egg Products: Not disclosed since March 2020. Assume moderate level of inventory

 

Eggs broken under FSIS inspection (million cases)

  FEBRUARY 2022, 6.18            MARCH 2022, 6.66

 

Cumulative eggs broken under FSIS inspection 2021 (million cases)

76.2 JAN. to DEC.

 

Cumulative 2021: number of cases produced (million)

268.7 JAN. to DEC.

 

Cumulative 2021: proportion of total eggs broken

28.3% (30.1% 2020)

 

Cumulative 2022: number of cases produced (million)

65.8 JAN. to MARCH.

 

Cumulative 2022: proportion of total eggs broken

29.7 %

 

 

EXPORTS MARCH 2022: (Expressed as shell-equivalent cases of 360 eggs).

Parameter

Quantity Exported

Exports:

2022 2022

Shell Eggs (thousand cases)

FEB. 152 MARCH 359

Products (thousand case equivalents)

FEB. 407 MARCH 338

TOTAL (thousand case equivalents)*

FEB. 559 MARCH 697

*Representing 3.1 percent of National production in MARCH 2021.

 

COMMENTARY ON APRIL 2022 COSTS AND STATISTICS

 

COST AND REVENUE DATA FOR APRIL 2022

 

The USDA reports data for five regions, respectively comprising the Northeast, South East (Mid-Atlantic), South Central, Midwest, and Northwest (NW and California combined in some tables).

 

From March 2019 onward some state data was withheld to maintain confidentiality where a company predominates in a specific state or region. From March 2021 California costs were inexplicably excluded, representing an unjustified concealment of data. The three Pacific Coast states could be combined to maintain confidentiality while providing representative U.S. data. Costs including feed and depreciation were recalculated in January 2022.

 

  • The USDA ex farm benchmark blended egg price in April 2022 was 48.8 percent higher or 77.4 cents per dozen up from March 2022 to 235.9 cents per dozen. This contributed to a positive margin of 151.4 cents per dozen based on ‘nest-run’ eggs (delivered from the laying house) in April 2022, compared to a positive margin of 74.7 cents per dozen in March 2022. The April 2022 USDA benchmark price of 235.9 cents per dozen should be compared to 128.5 cents per dozen for the corresponding month in 2020 and 67.8 cents per dozen in April 2021. The relatively high values during the first quarter of 2022 compared to corresponding months for the two previous years were due to a rise in demand with some lifting of COVID restrictions.

 

  • During April 2022, the feed component of production cost averaged 53.3 cents per dozen, up 1.9 percent or 1.0 cents per dozen from March 2022. For 2021 average feed cost was 42.5 cents per dozen. In 2020 average feed price was 31.7 cents per dozen and 31.4 cents per dozen in 2019.

 

  • Combining data from the USDA and the EIC, producers recorded a positive margin of 151.4 cents per dozen at farm-level for generic-egg flocks during April 2022. This compares with a positive margin of 74.7 cents per dozen in March 2022. For 2021 the cumulative average algebraic margin was 91.0 cents per dozen; for 2020, 16.0 cents; for 2019, -2.8 cents and for 2018, 35.3 cents per dozen, against USDA benchmark ‘nest run’ values. During the first four months of 2022 cumulative algebraic margin was 317.6 cents per dozen.

 

  • The simple average price of feed in April 2022 over 5-regions was $335.09 per ton, $6.59 per ton or 1.9 percent higher (using revised monthly USDA-AMS data) compared to March 2022. Southwest data is no longer disclosed to avoid compromising a company that predominates in Texas. The highest cost among five regions was the Northwest at $384.45 per ton, up 6.1 percent from March. This may be compared to the lowest-cost region, the Northeast at $314.23 per ton, up $0.05 from the previous month. The average cost value for feed includes ingredients plus milling and delivery at a nominal $10 per ton.

 

  • The benchmark price of corn was $285.1 per ton in April 2022, up $17.69 per ton or 6.6 percent higher than the March 2022 price, taking into account the difference in basis paid by producers. The differential in corn price between the Northeast and the Northwest in April 2022 was $84.16 per ton. A 5.0 percent decrease of $25.75 per ton in the price of soybean meal to $492.93 per ton in April partly offset the increase in feed cost. The industry experienced sharp increases in the cost of phosphate additives, fat and vitamins for the month. During April 2022 there was a differential of $55.07 per ton in feed price between the Midwest (and the Northeast that were similar) and the Northwest compared to a difference of $48.14 per ton in March 2022.

 

  • Feed price will continue to be a major factor driving production cost and hence margin. The May WASDE #624 projected the volume of the 2022 harvest and ending stocks for corn and soybeans. Unknown factors influencing feed cost during the remainder of the second quarter and extending to June 2022 will include the invasion of Ukraine with inevitable disruption in production and shipping from the region, coupled with the drought in South America influencing volumes and prices in international trade. The price of ingredients will be influenced by export volume from the U.S. and especially to China, diversion of corn to ethanol combined with the remaining economic and logistic effects of COVID restrictions. There is obviously considerable recovery in the fuel sector with ethanol production close to the one-million barrel per day benchmark. Substantial exports of corn and soybeans to China, in market year 2021/2022 and orders for 2022/2023 have increased domestic price and hence cost of egg production. Each $10 per ton difference in feed cost represents approximately 1.70 cents per dozen. A change of 10 cents per bushel in the price of corn is reflected in a 0.45 cent per dozen difference in production cost. A $10 per ton change in the price of soybean meal affects production cost by 0.35 cent per dozen.

 

  • The EIC calculated the 5-Region total nest-run production cost in April 2022 to be 84.5 cents per dozen, 1.2 cents per dozen or 1.4 percent higher than in March 2022. Production costs during April 2022 ranged from 80.8 cents per dozen in the Northeast up to 93.3 cents per dozen in the Northwest, higher than the Midwest and Northeast regions by 12.5 and 12.0 cents per dozen respectively. Deletion of California data is considered a substantial deficiency of the EIC Report.

 

  • Retail egg prices as determined by the Department of Commerce for March 2022 averaged 204.6 cents per dozen, up 4.1 cents per dozen from February 2022. During March 2020 and 2021 retail prices were respectively 152.5 and 162.5 cents per dozen. Consistently since 2017 average retail prices have not declined in proportion to ex-farm prices, allowing higher margins at retail, thereby depressing demand. Retailers have recently demonstrated some restraint in pricing possibly due to competition from deep discounters and club stores, despite sustained demand.

 

PRODUCTION DATA FOR APRIL 2022

 

  • According to USDA, the estimated average complement of U.S. hens in flocks over 30,000 during March 2022 amounted to 296.3 million, reflecting a downward adjustment in flock size by 17 million hens depleted during the month. This was partly offset by pullet replacements and retained flocks. The average total U.S. flock including hens in molt on all farms counted by the USDA amounted to 313.1 million in March 2022. This value will be adjusted subsequently following an accounting of depletions and replacements. The average end-of-year flock sizes over the past seven years respectively were, 2014, (311 million); 2015, (291 million post-HPAI losses); 2016, (319 million); 2017, (329.6 million); 2018, (341.6 million); 2019, (341.6 million) and 2020, (325.5 million). The December 1st 2022 flock was projected to be 319.0 although this figure will be depressed by flock depletion amounting to 29.5 million hens through the beginning of April and possibly more unless the HPAI epornitic is controlled.

 

  • The effect of COVID restrictions on the egg-breaking segment of the industry is noted in the decline in the flock size in Iowa. In January 2020 the state had 56.4 million hens with a progressive reduction following the retraction in the egg-liquid market. Hen population in Iowa stabilized at 46.4 million by March 2021 rising to 47.3 million in August 2021 but falling to 44.4 million in February 2022. The hen population was 21.2 percent lower (11.0 million hens) than the pre-COVID level. The decline in the population of hens in Iowa will be accentuated by depletion of 12.7 million in March to control outbreaks of HPAI. As of the end of March 2022 Iowa housed 38.2 million hens according to USDA figures.

 

  • Pullet chick hatch attained 30.5 million in March 2022, up 5.0 million from February 2022. It is anticipated that seasonal prices will be high through the remainder of the second quarter of 2022, resulting in larger chick placements if available in addition to necessary replacement of depleted pullets and hens.

 

  • The total in-molt and post-molt population of hens in the 5-Regions monitored by the USDA attained 13.7 percent of the national flock in March 2022, compared to 13.8 percent in February 2022. Annual averages for molt and post-molt combined were 14.9 percent in 2021, 13.5 percent for 2020, 15.2 percent for 2019 and 17.4 percent for 2018. The historical high value of 23.8 percent in 2016 was due to the loss of hens during the 2015 HPAI epornitic. This situation will be revisited in 2022 and 2023.

 

  • During the fourth quarter of 2021 the average monthly transfer of pullets to laying houses was 24.3 million with a projection of 21.1 million per month during the first quarter and 21.2 million during the second quarter of 2022. A projected average of 26.6 million was provided for July and August 2022.

 

  • The projected hatchery supply flock (parent generation) attained 2.9 million hens in March 2022. The previous peak parent-flock of 3.1 million hens in production was in June 2015, coinciding with the end of the HPAI epornitic. Parent hens then declined to a low of 2.5 million during the fourth quarter of 2016. Projections show a monthly average of 3.0 million parent-breeder hens during the first quarter and 3.1 million in the second quarter and 2.9 million during the third quarter of 2022. The size of the parent flock may be revised based on pullet chick orders influenced by demand to replace depleted hens and in response to higher producer margins.

 

  • Average hen-week production of 83.3 percent in April 2022 compared to a revised value of 82.0 percent in March 2022 reflects a higher proportion of younger hens in the national flock with many first-cycle hens and early second-cycle hens in production. Average rate of lay in 2021 was 82.0 percent, with 80.9 percent in 2020 and compared to 79.2 percent during 2019. The average rate of lay during any period is a function of the proportion of pullets placed, the rate of depletion of flocks and retention of molted hens for a second cycle. Average flock production will fall as weighted flock age increases or conversely will rise due to early depletion thereby increasing the proportion of young hens in their first cycle.

 

  • The April 25th USDA Poultry Slaughter Report documented 2.9 million light spent-hens processed under FSIS inspection during March 2022, 0.5 million less than the previous month and 12.6 percent less than in March 2021. Spent-hens are shipped live to Canada from Northern-tier U.S. states or are rendered or composted in other regions. Approximately 14 million spent hens are disposed of each month but this volume will decline as producers retain flocks to meet demand subject to the availability of housing.

 

EXPORT DATA FOR MARCH 2022.

 

  • According to USDA-FAS data, 359,000 cases of shell eggs were exported in March 2022, representing 1.6 percent of total production. The noteworthy 13.3 percent increase compared to February 2021 is attributed to sharply increased demand from Canada, Exports to South Korea ceased in the fourth quarter of 2021 as their flocks depleted due to HPAI were restocked.

 

  • During March 2022 the following regions were importers of shell eggs:- North America, comprising the two neighboring USMCA nations, but predominantly Canada (60.2 percent of exports, was 22.0 percent last month). East Asia, predominantly Hong Kong- China, (28.1 percent, was 57.2 percent). The Caribbean and Central American Region combined represented 8.9 percent of shell egg exports in March.

 

  • Exports of egg products in March 2022 attained 338,000 case-equivalents, representing 1.5 percent of U.S. output. The following regions were the leading importers of egg products by proportion of volume shipped:- North America, our USMCA neighbors, (8 percent of exports, was 40.2 percent last month), East Asia comprising China, Japan and S. Korea (33.7 percent, was 53.6 percent), Central America and the Caribbean increased their proportion of imports slightly in March (4.4 percent, up from 14.1 percent). There were no shipments to the Middle East in March. The E.U. represented 2.4 percent of U.S. exports of products in March.

 

  • Collectively, exports of shell eggs and products in March 2022 represented the output from approximately 10.2 million hens in production during the month, attaining 697,400 case-equivalents, up 24.8 percent from February 2022. This volume can be compared to monthly average shipments of 960,000 case-equivalents over the first four months of 2015 prior to the advent of HPAI, indicating that export markets will still have to be regained. The major loss in shell eggs during the fourth quarter of 2021 other than traditional importers was South Korea as their flocks were restored following depletions due to HPAI. The major gain during March was from Canada with 359,000 case equivalents of shell eggs and products combined

 

(See monthly Egg Export Report in this edition and thereafter under the Statistics TAB)

 

  • Maintaining export volume is attributed to cooperation between the AEB and USAPEEC, both in existing and new markets. Specific attention is directed to nations with the potential to import U.S. product based on landed price against competition. Exports of both egg-products and shell eggs in March 2022 corresponded to 3.1 percent of a nominal national flock of approximately 310 million hens, (before HPAI depletions) on commercial farms holding more than 30,000 hens.

 

  • There is no scientifically justifiable reason why any nation should embargo pasteurized egg products from an approved plant, based on a diagnoses of avian influenza or END in a state or country.

 

 

 

 






































































































































































































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