EGG MONTHLY

05/10/2018

REVIEW OF APRIL PRODUCTION STATISTICS AND COSTS.

  • April 2018 USDA Ex-Farm Benchmark Price Fell 64 Percent from March 2018 Consistent with Post-Easter Demand.

  • Production Cost Up 0.7 Percent with Feed Higher by 1.2 Percent.

  • Eighth Successive Month of Positive Nest-run Margins.

     

    INTRODUCTION.

    Summary tables for the latest USDA April 2018 statistics and prices made available by the EIC on May 9th are arranged, summarized, tabulated and discussed in comparison with values from the previous April 9th 2018 posting reflecting March 2018 data.

 

COSTS & REVENUE

 

Parameter

MARCH 2018

APRIL 2018

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

63.66 c/doz

64.14 c/doz

Low

58.10 c/doz (MW)

58.95c/doz (MW)

High

80.24 c/doz (CA)

80.71 c/doz (CA)

Components of 6-Region 1stCycle Cost of Production:-

 

MARCH 2018

APRIL 2018

Feed

34.86 c/doz

35.27c/doz

Pullet depreciation

11.28 c/doz

11.34 c/doz

Labor

4.00 c/doz

4.00 c/doz

Housing

5.30 c/doz

5.30 c/doz

Miscellaneous and other*

8.22 c/doz

8.22 c/doz


* adjusted February 2018

Ex Farm Margin according to USDA values reflecting APRIL 2018:-

116.2 cents per dozen1- 64.1 cents per dozen = +52.1 cents per dozen

(March 2018 comparison 180.8 1 cents per dozen - 63.7 cents per dozen = +117.1 cents per dozen.)

Note 1: USDA Blended egg price

   

MARCH 2018

APRIL 2018

USDA

Ex-farm Price (Large, White)

180.8 c/doz

116.2 c/doz

 

Cage-free to packing plant

160.0 c/doz

160.0 c/doz

 

Warehouse/Dist. Center

156.0 c/doz (Feb)

186.0 c/doz

 

Store delivered (estimate)

161.0 c/doz (Feb)

191.0 c/doz

 

Dept. Commerce Retail

175.5 c/doz (Feb)

183.0 c/doz (Feb)

Layer Feed Cost

MARCH 2018

APRIL 2018

U.S. Average

$222.03/ton

 

$224.66/ton

High

$252.61/ton (SE)

$252.61/ton (SE)

Low

$190.91/ton (MW)

$195.64/ton

Differential

$ 61.70/ton

$ 56.97/ton

 

Pullet Cost (19 Weeks) $3.89 March 2018 $3.91 APRIL 2018

 

VOLUMES OF PRODUCTION

PARAMETER

MARCH 2018

APRIL 2018

Egg-strain eggs in incubators

55.9 million (March)

56.2 million (Apr.)

Pullet chicks hatched

25.3 million (Feb.)

29.1 million (March)

Pullets to be housed in 5 months

25.2 million (July)

26.2 million (Aug.)

     

National Flock in farms over 30,000

307.8 million (Feb.)

307.2 million (March)

National egg-producing flock

322.5 million (Feb.)

324.4 million (March)

     

Proportion flock in molt or post-molt

17.7 (March)

16.9% (April)

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

253.3 (March)

255.3 million (April)

Eggs produced

7.10 billion (Feb.)

7.93 billion (March)

Cage-Free hens in production

51.9 million (March)

28.9% Organic

54.4 million (April)

28.5% Organic

"Top-6" States hen population (USDA)

173.1 million (Feb.)

174.6 million (March)

PROPORTION OF U.S. TOTAL HENS BY STATE, 2018

Based on a denominator of 307 million hens in flocks over 30,000.

 

STATE

FEB. 2018

MARCH 2018

Proportion by region (MARCH 2018)

Iowa

17.4%

17.5%

MW 53.6%

Indiana

9.9%

9.9%

NE 10.9%

Ohio

10.0 %

10.0%

SE 9.7%

Pennsylvania

8.0%

7.9%

SC 12.6%

Texas

5.7%

5.7%

CA 4.5%

California

4.4%

4.4%

NW 2.9%

(Values rounded to 0.1%)

Rate of Lay, weighted hen-week (USDA) 78.8% (MARCH) 78.9% (APRIL)

Actual USDA-ERS 2015 U.S. per capita annual egg consumption revised due to HPAI:- 256.2 eggs (-11.3 from 2014)*

Actual USDA-ERS 2016 U.S. per capita annual egg consumption:- 274.9 eggs (+18.7 from 2015)

Actual USDA-ERS 2017 U.S. per capita annual egg consumption:- 275.7 eggs (-0.5 from 2016)

Forecast USDA-ERS 2018 U.S. per capita annual egg consumption projected to be:- 277.4 eggs (+1.7 from 2017)

Eggs broken under FSIS inspection (million cases)

FEBRUARY 5.904 MARCH 6,218

Cumulative 2018 number of cases produced 63.5 million

Cumulative 2018 proportion of total eggs broken 29.3%

 

EXPORTS

Parameter

Quantity Exported

Exports:

 

Shell Eggs (thousand cases)

FEB. 232 MARCH 247

Products (thousand case equivalents)

FEB. 479 MARCH 432

TOTAL (thousand case equivalents)

FEB. 711* MARCH 679

*Representing 3.3 percent of National production in March 2018

 

 

COMMENTARY ON APRIL 2018 COSTS AND STATISTICS

The following comments and comparisons are provided on April 2018 USDA values:-

APRIL 2018 COST AND REVENUE DATA

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

  • The USDA ex farm benchmark blended egg price in April 2018 decreased by 64.6 cents per dozen from March 2018 or 35.7 percent to 116.2 cents per dozen, contributing to a positive margin of 52.1 cents per dozen as delivered 'nest-run' (from the laying house). The April 2018 value of 116.2 cents per dozen should be compared to 42.8 cents per dozen for the corresponding month in 2017 and 41.8 cents per dozen in 2016.

  • During April 2018 feed price averaged 35.3 cents per dozen. The average feed cost in 2017 was 32.0 cents per dozen.

  • Combining data from the USDA and the EIC (formerly data from the University of California), producers recorded a positive margin of 52.1 cents per dozen at farm level for flocks in April 2018 compared to a positive margin of 117.1 cents per dozen in March 2018. The cumulative margin for the first four months of 2018 is 259.0 cents per dozen. The algebraic margin for 2017 was a positive 39.2 cents per dozen, with the first eight months negative comparing production cost against USDA 'nest run' values. The algebraic average margin for 2016 was a loss of 9.6 cents per dozen with negative values recorded for eight consecutive months. Ex-farm margin for 2015 amounted to an average of 74.5 cents per dozen.

  • The simple average price of feed for April 2018 over 5-regions was $224.66, higher by $2.63 per ton (1.2 percent) compared to March 2018. The Southeast recorded the highest cost among five regions at $252.61 (unchanged from March) compared to the lowest region, the Midwest at $195.64 per ton. The average figure includes ingredients plus milling and delivery at approximately $10 per ton. The benchmark price of corn was $187.21 per ton in April 2018, up 1.1 percent from March 2018. An increase of 1.4 percent in the price of soybean meal from $394.53 per ton in March 2018 to $400.19 per ton in April 2018 added to the rise in feed cost. There was a $66.16 per ton differential in corn price between the Midwest and the Southeast in April 2018. Feed price will continue to be a major factor driving production cost and hence margin. Unknown factors influencing feed cost in 2018 will include disruption of international trade due to threatened tariffs imposed by China, and a possible La Nina event, if it develops, would be responsible for a mild drought in the Midwest. Each $10 per ton difference in feed cost represents 1.75 cents per dozen.

  • The EIC-calculated the 6-Region total nest-run production cost in April 2018 to be 64.13 cents per dozen, 0.47 cent per dozen more than in March 2018. Production costs during April 2018 ranged from 58.95 cents per dozen in the Midwest up to 80.71 cents per dozen in California which was higher than the Midwest region by 21.76 cents per dozen.

  • Retail egg prices as determined by the Department of Commerce for MARCH 2018 averaged 183.1 cents per dozen, 7.6 cents per dozen more than in February 2018. During February 2016 and 2017 retail prices were respectively 208.1 cents per dozen 140.4 cents per dozen. During entire 2016 and extending through August 2017, retail prices did not decline in proportion to ex-farm prices allowing higher margins at retail thereby depressing demand.

 

APRIL 2018 PRODUCTION DATA

  • According to USDA data, the estimated average complement of U.S. hens in flocks over 30,000 during March 2018 amounted to 307.2 million, 0.6 million less than in February 2018 reflecting the seasonal decrease in flock size. The total U.S. flock including hens in molt on all farms counted by the USDA amounted to 324.4 million in March 2018. The average end-of-year flock sizes over the past five years respectively were, 2012 (299 million); 2013 (308 million); 2014 (311 million); 2015 (291 million) and 2016 (319 million). Market pressures on margins and consecutive monthly losses in 2017, which depleted financial reserves may result in lower hen populations if prices fall sharply after Easter through the early summer period.

  • Pullet chicks hatched were up a noteworthy 15.0 percent in March 2018 to 29.1 million compared to the previous month at 25.3 million. It is evident that if low prices prevail during Summer months flock placements will decline due to some producers cancelling pullet orders.

  • The total in-molt and post-molt population of hens in the 5-Regions monitored by the USDA attained 16.9 percent of the national flock in April 2018, contrasted to the average of 17.4 percent in 2017 and 23.8 percent in 2016.

  • Average monthly pullets transferred to laying houses during the first quarter of 2018 amounted to 20.5 million. The monthly projection for pullets to be transferred to laying houses during the second quarter of 2018 is 21.7 million. Cancellation of pullet chick orders are unlikely if wholesale prices continue above production cost.

  • The hatchery supply flock increased from a level of 3.1 million hens in production in June 2015, coinciding with the end of the HPAI epornitic to a low of 2.5 million hens during the 4 th Quarter of 2016. Projections show monthly average of 2.5 million breeder hens in production during the second and third quarters of 2018 respectively.

  • Average rate of lay attained 78.7 percent during 2016 and increased to 79.8 percent in 2017. Average production of 78.9 percent in April 2018 reflected the balance between placements of pullets, the rate of depletion of flocks or retention of molted hens for a second cycle. Average flock production will fall as weighted flock age increases or will rise due to early depletion and restricting production to the first cycle.

  • Processing of light hens under FSIS inspection attained 4.2 million in March, up from 3.6 million in 2018. The average for the period January through July 2017 was 5.4 million per month. Spent-hens are shipped to Canada from Northern-tier U.S. states or are rendered or composted in other regions. Approximately 13 million spent hens are disposed of each month.

 

MARCH 2018 EXPORT DATA

  • According to USDA-FAS data, 246,700 cases of shell eggs were exported in March 2018 representing 1.1 percent of total production. This value should be compared to the high value of 409,700 cases in March 2016 prior to the onset of HPAI. During March 2018 the following regions were the leading importers:- North America =NAFTA (45.0 percent, was 36.3 percent), East Asia (37.2 percent.) and the Middle East (1.8 percent, was 10.5 percent).

 

  • Exports of egg products in March 2018 were down 9.7 percent from February 2018 to 432 million case-equivalents representing 2.0 percent of U.S. output. The following regions were the leading importers of egg products by proportion of volume shipped in March:- North America (=NAFTA) (received 20.0 percent, was 30.4 percent), East Asia (54.3 percent) and the EU-28 (6.1 percent, was13.7 percent) Decreases to the E.U. and Asia were attributed to the lower prevalence of avian influenza and recovery from the fipronil contamination crisis. Due to the shortage of breaking stock and reduced capacity through large in-line units, exports were curtailed in 2015 and volume decreased by 34.8 percent compared to 2014, attaining 1.7 percent of total U.S. output. For 2016 export volume was 12.0 percent lower than in 2015. During the fourth quarter of 2017 exports of egg products increased by 23.8 percent over the corresponding fourth quarter of 2016 which was depressed during post-AI recovery.

 

  • Collectively, exports of shell eggs and products in Mach 2018 represented the equivalent of approximately 10.8 million hens in production during the month, attaining 678,800 case-equivalents. This was a 29.2 percent decrease compared to monthly average shipments of 960,000 case equivalents exported over the first four months of 2015 prior to the advent of HPAI. Exports of both egg-products and shell eggs in March 2018 corresponded to 3.1 percent of a nominal national flock of 308 million hens in production on all farms.

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

 

 

 

 






































































































































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