Egg Industry Statistics and Reports


REVIEW OF SEPTEMBER 2020 EGG PRODUCTION COSTS AND STATISTICS.

10/12/2020

HIGHLIGHTS

  • September 2020 USDA ex-farm blended nest-run benchmark price was 65.6 cents per dozen, 22.2 percent higher than the August value of 53.7 cents per dozen but 48.9 percent lower than the exceptionally high April value of 128.5 cents per dozen. The downward price trend from mid-May through July is attributed to restoration of normal consumer purchasing patterns coupled with diversion of eggs from breaking to the shell-egg market. Currently stock levels and prices indicate a balance between supply and demand albeit at a low price attributable to over-production and diversion from the egg-breaking sector.
  • September 2020 USDA average nest-run production cost was 2.1 cents per dozen higher than in August 2020 at 60.6 cents per dozen.
  • September 2020 USDA benchmark nest-run margin attained a positive value of 5.0 cents per dozen compared to a negative margin of 4.3 cents per dozen for August 2020.
  • August 2020 national flock in production (over 30,000 hens/farm) was down 3.1 million hens or 1.0 percent to 299.1 million. There are approximately 6.9 million hens in molt or due to return from molt.
  • August 2020 pullet chick hatch was up 8.3 percent from July 2020 to 25.0 million.
  • August 2020 export of shell eggs and products combined was up 6.9 percent from June 2020 to 805,100 case equivalents representing the theoretical production of 8.3 million hens.

INTRODUCTION.

Summary tables for the latest USDA September 2020 prices and flock statistics made available by the EIC on October 11th 2020 are arranged, summarized, tabulated and reviewed in comparison with values from the previous September 9th 2019 posting reflecting August 2020 cost and production data.

COSTS & REVENUE

Parameter

SEPTEMBER 2020

AUGUST 2020

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

60.6 c/doz

58.0 c/doz

Low

57.4 c/doz (MW)

55.0c/doz (MW)

High

86.5c/doz (CA)

83.5c/doz (CA)

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

SEPTEMBER 2020

AUGUST 2020

Feed

31.2 c/doz

28.9c/doz

Pullet depreciation

11.1 c/doz

10.8 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*

9.3 c/doz

9.3 c/doz


* Adjusted January 2020 and used as a rounding factor

Ex Farm Margin (rounded to nearest cent) according to USDA values reflecting SEPTEMBER 2020:-

65.6 cents per dozen1- 60.6 cents per dozen = 5.0 cents per dozen

(August 2020 comparison 53.71 cents per dozen – 58.0 cents per dozen = -4.3 cents per dozen.)

Note 1: USDA Blended egg price


 


Export of Shell Eggs and Products, January-August 2020.

10/10/2020

USDA-FAS data collated by USAPEEC, reflecting export volume and values for shell eggs and egg products are shown in the table below comparing the first eight months of 2020 with the corresponding period in 2019:-

PRODUCT

Jan.-Aug. 2019

Jan.-Aug. 2020

Difference

Shell Eggs

Volume (m. dozen)

90.4

94.9

+4.5 (+5.0%)

Value ($ million)

70.1

79.1

+9.0 (+12.8%)

Unit Value ($/dozen)

0.78

0.83

+0.05 (+6.4%)

Egg Products

Volume (metric tons)

20,088

25,784

 +5,696 (+28.4%)

Value ($ million)

63.9

69.8

+5.9 (+9.2%)

Unit Value ($/metric ton)

3,181

2,707

-474 (-14.9%)

 

U.S. SHELL EGG AND EGG PRODUCT EXPORTS DURING

JANUARY-AUGUST 2019 COMPARED WITH JANUARY-AUGUST 2020

Source USDA-FAS/USAPEEC

 

SHELL EGGS

Shell egg exports from the U.S. during the first eight months of 2020 increased by 5.0 percent in volume and 12.8 percent in total value compared to January-August 2019. Unit value was 6.4 percent higher or 5 cents per dozen for the comparison between 2020 and 2019. The top two importers, Hong Kong and Mexico combined, represented 70.2 percent of volume and 60.3 percent of total value.

 

Mexico was the leading importer of shell eggs in January-August 2020 with 34.6 million dozen representing 36.5 percent of volume and 29.6 percent of total value corresponding to a unit value of $0.68 per dozen. Prospects for additional sales will depend on continued acceptance of washed eggs held under refrigeration for retail sale, first announced in September 2018 but implemented in late 2019. For January-August 2020 imports of shell eggs by Mexico increased by 126 percent in volume and 144 percent in value compared to January-August 2019.

 

Hong Kong was the second-ranked importer of shell eggs in January-August 2020, with 35.8 million dozen representing 33.7 percent of volume and 30.7 percent of the $79.1 million total value of U.S. shipments of shell eggs. Average unit value was $0.76 cents per dozen, corresponding to the average prevailing nest-run USDA benchmark price during the eight months of 2020. 

 

Canada was a distant third in rank as an importer during January-July 2020 with 9.5 million dozen representing 10.0 percent of volume and 15.3 percent of total value at $12.1 million with a unit value of $1.27 per dozen. Canada reduced volume by 66.2 percent during January-August 2020 compared to 2019. With the advent of COVID-19, April consignments of shell eggs were down 80.6 percent from 2019 and in May, June and July exports were negligible. This reflected decreased demand from the food service sector paralleling the situation in the U.S. Shell eggs shipped to Canada represent the difference between domestic demand and production, limited by their national controlled marketing system that has reduced farmers’ quotas. August imports attained to 3.2 million dozen as domestic demand increased.

 

The Caribbean Region represented 6.2 percent of export volume for January-August 2020. This region was up 28.2 percent in volume and 28.3 percent in total value, an obvious improvement compared with January-August 2019. The unit value of shell eggs exports to the Caribbean apparently averaged $1.30 per dozen, ($1.39 during 2019). This is disproportionately high compared with the average export realization, most probably because a proportion of shell eggs enumerated may have been either fertile hatching eggs or enriched specialty eggs.

 

The Middle East Region imported 8.4 million dozen during January-August 2020 valued at $6.4 million with a unit price of $0.76 per dozen. Volume and value in January-August 2020 were respectively higher by 105 percent and 77.8 percent compared to January-August 2019. Southern E.U. nations in addition to India and Ukraine have a competitive transport advantage over the U.S in this market. Within the Middle East region the UAE ranked as the 4th largest importer from the U.S. with a volume of 2.4 million dozen. Israel ranked 6th with 1.6 million dozen, possibly based on depletion of flocks infected with SE and ending use of obsolete facilities. Collectively these nations imported shell eggs to the value of $5.5 million during January-August of 2020.

 

EGG PRODUCTS

The total volume of exported egg products during January-August 2020 increased by 28.4 percent and total value was higher by 9.2 percent compared to January-August 2019. Unit value decreased by 14.9 percent to $2,707 per ton from $3,181 recorded for January-August 2019. This decline reflects the relationship between World supply and demand with Ukraine and India as significant exporters.

 

Japan was the leading importer based on a value of $22.3 million with a volume of 6,152 metric tons that represented 23.9 percent of the total U.S. exports of egg products, an increase of 20.0 percent compared with January-August 2019. The high unit value of $3,625 per metric ton compares with the average value for all exports of $2,707 or $2,420 excluding Japan. The discrepancy in unit price reflects the product mix including yolks. With conclusion of a bilateral trade agreement the U.S. will no longer be at a competitive disadvantage with respect to the E.U.

 

Mexico continued as the second-ranked importer based on value in January-August 2020 receiving 7,993 metric tons comprising 31.0 percent of export volume and 21.1 percent of value with a unit price of $1,839 per metric ton.

 

Canada represented a distant third in rank among importers purchasing 4,509 metric tons comprising 17.5 percent of volume and 12.8 percent of value with a low unit price of $1,974 per metric ton. During January-August 2020 Canada increased volume by 22.7 percent but value increased 14.1 percent compared to the first eight months of 2019. During August 2020 Canada increased volume by 80.4 percent to 336 metric tons.

 

Notable changes over the first eight months of 2020 included an 84 percent increase in exports to the UK+EU of 1,525 metric tons representing 5.9 percent of volume valued at $7.1 million and at a unit price of $4,656 per metric ton.

 

South Korea increased imports 58.4 percent and value by 58.7 percent to $4.1 million. In August this nation imported 77 metric tons valued at $0.2 million with a unit price of $2,597 per metric ton.

 

Saudi Arabia imported 34 metric tons of egg products valued at $0.2 million representing a significant increase 0ver August 2019.

 

COMMENTS

Successful conclusion of negotiations to replace NAFTA led to the trilateral USMCA, announced on September 30th 2018. The subsequently-modified agreement was ratified by the Parliament of Canada, 17 months after signing the basic trade pact and only after adoption by the U.S. Congress and the Senate of Mexico in 2019. Exports of shell eggs and egg products to our neighbors were valued at $74.7 million in 2017, $89.7 million in 2018 and $80.8 million in 2019.

 

Prospects for long-term exports of shell eggs will be limited by the willingness of importers to accept the World Organization for Animal Health (OIE) principle of regionalization in the event of exotic Newcastle disease or isolation of either H5 or H7 avian influenza, irrespective of pathogenicity. Most importing nations are now applying regionalization and permitting imports on a county or state-exclusion basis following H5 or H7 AI infection.

 

Both the END outbreak in backyard flocks in southern California and the localized and limited LPAI outbreaks and one HPAI isolation in turkey flocks in the Carolinas are now officially over. In accordance with OIE principles no embargos should be imposed on either the states or counties affected.

 

Generally pasteurized egg products should not be subject to any embargo imposed following reports of AI or Newcastle disease in a region.


 

USDA-WASDE FORECAST #605 October 9th 2020

10/09/2020

OVERVIEW

The October 9th 2020 USDA WASDE Report was updated from the September edition reflecting drought conditions and the August 10th derecho with consequences to corn and soybean harvests. October projections are based on updated estimates of harvest area and yield. The corn acreage to be harvested is currently estimated at 82.5 million acres, down 1.0 million acres from the September 11th WASDE report. Soybeans will be harvested from 82.3 million acres, down 0.7 million acres from the September 11th WASDE report.

 

The October 2020 WASDE estimate of corn yield was lowered fractionally to 178.4 bushels per acre, (168.0 bushels per acre in 2019). The projection of soybean yield was unchanged at 51.9 bushels per acre. (47.4 bushels per acre in 2019)

 

The October USDA projection for the ending stock of corn was decreased by 13.4 percent to 2,167 million bushels. Due to decreased supply and exports the ending stock for soybeans was reduced by 36.9 percent to 290 million bushels.

 

Projections for ending stocks of both corn and soybeans have influenced recent CME price quotations concurrently with increased compliance with the Phase-One trade agreement with China. The September WASDE projected the corn price at $3.60 per bushel and soybeans at 980 cents per bushel.

 

It is presumed that projections are based on the assumption that China will as far as possible honor commitments that were disrupted during the first quarter of 2020 by COVID-19. China booked substantial orders for corn and soybeans delivered through August for the 2019-2020 market year in addition to large quantities booked from September onwards for the 2020-2021 market year. Reports on export volumes of commodities to China will be included in upcoming editions of CHICK-NEWS and in subsequent mailings as data becomes available.

 

CORN

The corn harvest for 2020 documented in the October 2020 WASDE Report #605 is projected at 14,722 million bushels consistent with actual planting data and crop progress. The projected 2020 harvest can be compared to 2019 at 13,692 million bushels and is 2.8 percent lower than the previous 2016 record harvest of 15,148 million bushels. The “Feed and Residual” category was reduced by 1.7 percent to 5,775 million bushels. The “Ethanol and Byproducts” category was lowered to 5,050 million bushels despite reduced domestic demand for E-10 due to COVID-19 restrictions and competitive export markets. Corn exports were retained at 2,325 million bushels in the face of intense competition from Brazil and Argentine and high world domestic coarse grain production relative to demand. Ending stocks were decreased by 349 million bushels (13.4 percent) to 2,167 million bushels.


 


USDA DATA ON SEPTEMBER CAGE-FREE PRODUCTION

10/05/2020

EGG-NEWS summarizes and comments on data and trends in the monthly USDA Cage-Free Report, summarizing the information posted weekly in the EGG-NEWS Egg WeeklyPrice and Inventory Report.

 

The USDA Cage Free Report for the month of September 2020 released on October 5th 2020 documented a 9.6 percent increase in the population of hens producing under the Certified Organic seal at 17.2 million, up 1.5 million from the average in Q2 2020. Cage free flocks were up 2.1 percent compared to Q2 representing an increase of 1.3 million. The respective numbers of hens in organic and cage-free flocks should reflect the realities of supply and demand in the market over successive quarters.

 

Average flock production was reduced to 78.5 percent for August for both categories of non-caged hens reflecting the balance between older flocks and the higher relative production from chicks placed during April and May 2020.

Flock size

(million hens) September

2020

July & August

2020

Av. Q2

2020

Av. Q1

 2020

Certified Organic 17.2

15.8

15.7

15.7

Cage-free hens 62.8

63.0

61.5

56.3

Total non-caged 80.0

78.8

77.2

72.0

Average weekly production (cases). August September 2020

Certified Organic

248,278 261,722 +5.4%

Cage-free

989,659 959,061 -3.1%

Total non-caged

1,237,937 1,220,783 -1.4%

 

Average Wholesale Contract Price Cage-Free Brown

$1.51/doz. ($1.53 Sept.’19 through Aug‘20)

Range:

$1.15 to $1.90/doz

FOB Negotiated price, grade quality, nest-run, loose

Price range $0.70 to $1.51 per dozen

Average Value of $1.06/doz. (was $0.80 Aug.)

 

Average Advertised National Retail Price C-F, L, Brown

$2.63/doz. (was $2.63 Aug. 2020)

USDA 6-Regions

High: SW.

$2.92/doz. $2.97 (SC.)

Low: MW. & SC.

$2.39/doz. $2.22 (SW.)

 

Based on the importance of cage-free production, the USDA-AMS issues their report on volumes and prices at monthly intervals for the information of Industry stakeholders. There is some doubt as to the accuracy of the individual monthly flock numbers especially when reports show either no change in the cage-free flock for sequential months or a large difference for the preceding month usually after the end of a quarter. It is suggested that USDA consider a quarterly report with more accurate and consistent data to be more useful to the industry.

 

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


 

Updated USDA Projections for U.S. Egg Production

09/18/2020

The USDA Economic Research Service issued an updated forecast of egg production on September 17th 2020 revising the previous August18th 2020 report. The volume of eggs produced and per capita consumption for 2020 were raised by 0.6 percent and 0.8 percent respectively compared to the August report consistent with current trends. The September projection for 2020 production and per capita consumption were revised downward to reflect reductions of 2.8 and 2.9 percent respectively from 2019. The discrepancy between production and consumption will be partly offset by the substantial but transitory rise in price in March and April. The 2020 benchmark New York unit price for 2020 was increased 10.6 percent from 2019, a 5.7 percent downgrade from the August projection by USDA. The price elasticity of eggs is denoted by the disparity in the decline in the New York price benchmark relative to volume of production in 2019. Subsequent USDA forecasts will provide greater clarity on reopening of the economy that is still depressed with high unemployment associated with COVID restrictions.

 

For 2021 the USDA forecast production to attain 8,165 million dozen, up 1.6 percent from 2020 production with a disproportionate 1.1 percent increase in per capita consumption to 287.4 eggs that will be reflected in lower unit realization.

September 2020 data is shown in the table below:-

Parameter

2017

 (actual)

2018

 (actual)

2019

 (revised)

2020

2021 % Difference (projection) (forecast) 2020-2021

EGGS

Production (m. dozen)

7,811

8,042

 8,265

 8,033

8,165 +1.6

Consumption (eggs per capita)

282.1

287.8

 292.8

 284.2

287.4 +1.1

New York price (c/doz.)

101

138

94

115

110 -4.3

Source: Livestock, Dairy and Poultry Outlook –September 17th 2020

Subscribers to EGG-NEWS are referred to the postings depicting weekly prices, volumes and trends and the monthly review of prices and related industry statistics.


 

USDA GAIN Report Updates Egg Production in Mexico

08/25/2020

Mexico is a significant importer of U.S. eggs and was ranked second to Hong Kong during January through June 2020. Mexico purchased 23.0 million dozen, representing 35.3 percent of volume and 28.5 percent of total U.S. shell egg export value with a unit price of $0.73 per dozen.  Mexico is also the second-ranked importer of egg products receiving 6,320 metric tons, comprising 31.5 percent of U.S. export volume and 21.2 percent of value, with a unit price of $1,788 per metric ton.

 

The USDA GAIN Report MX2020-0042, dated August 15th 2020, estimates annual production in 2020 at three million metric tons including both shell eggs and egg products, corresponding to 50.1 billion dozen.  This conversion is based on the assumption that one metric ton of shell eggs represents 16,700 dozen.  Accepting a 78 percent average hen-day production, the flock in Mexico is estimated at 185 to 190 million hens.


Proan Feed mill

 

Due to an ongoing recession which commenced in 2019 and is exacerbated by COVID restrictions, egg production remained static between 2019 and 2020, but should increase by 3.3 percent in 2021.  Mexico is a net importer of 68,260 metric tons of shell eggs and egg products representing 2.2 percent of current production.  Given a population of 129 million, consumption of both shell eggs and egg products amounts 393 per capita.  Consumption is projected to increase by 3.8 percent in 2021 with a corresponding 3.3 percent increase in domestic production, requiring a higher level of imports.

 

According to the GAIN report, eggs have undergone a marked increase in price from mid-2019.  Industry data suggests that wholesale prices are now in the region of $1.25 per dozen compared to $0.82 in August 2019.  USDA anticipates the U.S. remaining the major supplier to Mexico, especially with the finalization of the USMCA.  Brazil relinquished market share to the U.S. with the loss of their third-country tariff rate quota.

 

The joint promotional endeavors of the AEB and the USAPEEC are critical to maintaining the goodwill of customers and consumer groups. Promotional activities include seminars and webinars directed to specific user groups in Mexico and programs intended to facilitate transport and customs clearance for U,S exporters.


 

Egg Monthly

08/11/2020

REVIEW OF JULY 2020 EGG PRODUCTION COSTS AND STATISTICS.

 

HIGHLIGHTS

  • July 2020 USDA ex-farm blended nest-run benchmark price was 58.7 cents per dozen, 16.0 percent higher than in June but 52.9 percent lower than the exceptionally high April value of 128.5 cents per dozen. The downward price trend from mid-May through July is attributed to restoration of normal consumer purchasing patterns. This followed COVID-19 panic buying during late March into early April. The supply pipeline was re-filled in April and consumption declined thereafter. Currently stock levels and prices indicate a balance between supply and demand albeit at a low price attributable to overproduction.
  • July 2020 USDA average nest-run production cost was 0.5 cents per dozen higher than in June 2020 at 58.7 cents per dozen.
  • July 2020 USDA benchmark nest-run margin attained a positive value of 0.1 cents per dozen compared to a negative margin of 7.5 cents per dozen in June 2020.
  • June 2020 national flock in production (over 30,000 hens/farm) was down 3.5 million hens or 1.1 percent to 302.5 million. There are approximately 7.5 million hens in molt or due to return from molt.
  • June 2020 pullet chick hatch was up 3.8 percent from May 2020 to 27.4 million.
  • June 2020 export of shell eggs and products combined was up 6.1 percent from May 2020 to 752,300 case equivalents representing the theoretical production of 10.9 million hens.

 

INTRODUCTION.

Summary tables for the latest USDA July 2020 prices and flock statistics made available by the EIC on August 11th 2020 are arranged, summarized, tabulated and reviewed in comparison with values from the previous July 8th 2019 posting reflecting June 2020 cost and production data.


 


Cal-Maine Foods Reports on Q4 and FY 2020

07/19/2020

Cal-Maine Foods Reports on Q4 and FY 2020

In a press release dated July 20th Cal-Maine Foods (CALM) announced results for the 4th quarter and Fiscal 2020 ending May 30th 2020.

The following table summarizes the results for the period compared with the values for the corresponding quarter of the previous fiscal year (Values expressed as US$ x 1,000 except EPS)

 

4th Quarter Ending

May 30th 2020

June 1st 2019

Difference (%)

Sales:

$453,333

$280,573

+61.6

Gross profit:

$121,501

$12,755

+852.6

Operating income:

$76,092

$(30,420)

+350.1

Pre-tax Income

Net Income

$77,551

$60,4631

$(27,943)

$(19,522)2

+377.5

+409.7

Diluted earnings per share:

$1.24

$(0.41)

+402.4

Gross Margin (%)

26.8

4.6

+482.6

Operating Margin (%)

16.8

(10.8)

+255.6

Profit Margin (%)

13.3

(7.0)

+290.0

Long-term Debt:

$2,387

$858

+178.2

12 Months Trailing:

Return on Assets (%)

-5.3

Return on Equity (%)

-6.3

Operating Margin (%)

-8.3

Profit Margin (%)

-5.2

Total Assets

$1,206,694

$1,156,278

178.2

Market Capitalization

$2,164,000

Note 1. C-M received $2.4 million in CARES funding.

 

Note 2. C-M received a tax benefit of $8.4 million.

For FY 2020 CALM earned $18.4 million on sales of $1,352 million with an EPS of $0.38. For comparison in FY 2019 Net earnings attained $54.2 million on sales of $1,361million with and EPS of $1.12.

52-Week Range in Share Price: $30.74 to $46.65 50-day Moving average $43.67

 

Market Close Friday July17th $44.18. Open Monday July 20th post-release $44.93

Beta 0.2

In reviewing the CALM quarterly report the following calculated values* represent key data for the 4th Quarter. (Q4 Fiscal 2019 and difference in parentheses):-


Dolph Baker, Chairman and CEO

  • Dozen shell eggs sold: 282,422,000 (254,722,000; +10.8%)
  • Average selling price of all shell eggs: $1.57 per dozen; ($1.08 per dozen; +45.3%).
  • Average selling price of specialty eggs calculated from data released: $1.93 cents per dozen; ($1.80 per dozen; +7.2%).
  • Average selling price of generic eggs calculated from data released: $1.46 cents per dozen; ($0.80 cents per dozen; +82.5%).
  • Differential between generic and specialty eggs: $0.47 cents per dozen; ($1.00 per dozen; -53%)
  • Specialty eggs as a proportion of volume sold: 24.4%; (24.5%; +0.4%)
  • Specialty eggs as a proportion of sales value: 9%; (44.1%; -32.2%)
  • Proportion of eggs sold actually produced by Cal-Maine flocks: 86.0%; (87.6%; -1.8%).
  • Feed cost per dozen 40.5 cents (41.1 cents; -1.5%)

*Assumes that 98 percent of sales value derived from shell eggs.


In commenting on results for the quarter and year Dolph Baker, Chairman and CEO of Cal-Maine Foods, Inc., stated, “Fiscal 2020 demonstrated Cal-Maine Foods’ resiliency in the face of challenging business conditions and volatile egg prices. After three fiscal quarters characterized by an oversupply of eggs and depressed market prices, demand for eggs increased and market prices rose 62.4 percent during our fourth fiscal quarter over the average price for the first three quarters, as consumers purchased more eggs for preparing meals at home in response to the COVID-19 pandemic. This demand trend also coincided with higher seasonal demand during the peak Easter season. As a result, our sales volumes were up 10.9 percent compared with the fourth quarter of fiscal 2019.

The Southeast large market average price for conventional eggs for the fourth quarter of fiscal 2020 increased to $1.71 compared to $0.86 for the fourth quarter of fiscal 2019, with a high of $3.18 and a low of $1.02. For fiscal 2020 the Southeast large market average price for conventional eggs was $1.22 compared to $1.23 for fiscal 2019, with a high of $3.18 and a low of $0.62.

"Specialty eggs are an important part of our growth strategy, and we strive to provide a favorable product mix in line with consumer demand. We have continued to position Cal-Maine Foods to meet the expected additional demand for cage-free eggs. California, Colorado, Washington, Oregon, Massachusetts, Rhode Island and Michigan have all passed minimum space and/or cage-free requirements, mandating sale of only cage-free eggs with implementation of these laws ranging from January 2022 to January 2026. These states represent approximately 22.9 percent of the U.S. total population according to the U.S. Census Bureau. Legislation is also pending in Arizona and Hawaii for cage-free requirements. We have invested over $371.7 million in facilities, equipment and related operations to expand our cage-free production starting with our first facility in 2008. Throughout the next two years, additional cage-free capacity will come online in Florida, Texas and Utah, which will provide significant additional processing, pullet and production capacity in time to meet expected customers’ needs.

Operating income was $76.1 million in the fourth quarter compared to an operating loss of $30.4 million in the prior-year fourth quarter. We also benefitted from a more favorable effective tax rate in fiscal 2020 and in the fourth quarter, as we recorded a tax benefit of $2.4 million related to the carryback provisions of the Coronavirus Aid, Relief and Economic Security Act of 2020 (CARES Act). Overall, our farm production costs per dozen were down 0.8 percent over the fourth quarter of fiscal 2019, reflecting a 1.5 percent drop in feed costs. We believe we will continue to have an adequate supply of ingredients in fiscal 2021. However, current ongoing uncertainties and supply chain disruptions related to the COVID-19 outbreak, weather fluctuations and geopolitical issues surrounding trade agreements and international tariffs may lead to further price volatility.

 As the coronavirus continues to spread and reach more rural communities where we operate, it is critical that we provide a safe working environment, and we continue to implement appropriate protections taking into account protocols recommended by the Centers for Disease Control (CDC) and other government health agencies. For fiscal 2020, we incurred expenses of approximately $2.8 million related primarily related to supplemental pay. We are committed to making the necessary investments to support and protect all Cal-Maine Foods employees.

Baker concluded “while we are facing an uncertain environment, we will continue to execute our growth strategy in fiscal 2021 - provide a favorable product mix, including cage-free and other specialty eggs, invest in our operations, identify acquisition or other growth opportunities that enhance our production, and manage our operations in a responsible and sustainable manner.


 




































































































































































































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