Updated USDA Projection for U.S. Egg Production November 2021.

The USDA Economic Research Service issued an updated forecast of egg production on November 16th 2021 revising the previous October 18th 2021 report. The November projection of production for 2021 was updated by 0.2 percent to 8,077 million dozen with a per capita consumption of shell eggs and liquids combined of 284.0 up 0.9 percent compared to 2020. The average 2021 benchmark New York bulk unit price was lowered to 117 cents per dozen despite higher prices during the first quarter and again in August and November. The USDA provided a projection for 2022 of 8,185 million dozen produced, with a consumption of 287.5 per capita. Subsequent USDA forecasts will provide greater clarity on reopening of the economy but with depressed liquid consumption attributed to COVID restrictions.

November 2021 data is shown in the table below:-

Source: Livestock, Dairy and Poultry Outlook released November 16th 2021

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 Weekly Egg Price and Inventory Report, November 17th 2021.

• Shell inventory was unexpectedly down by a substantial 9.5 percent following a 2.8 percent increase last week, denoting the beginning of the seasonal increase in demand. The rise in unit revenue was evident despite the net addition of 0.9 million hens in the producing flock this past week and a 9.8 million algebraic increase over fourteen weeks. Midwest prices for generics were about 25 cents per dozen below the corresponding week in 2020 but now have advanced further above breakeven taking into account the combined costs of nest-run and for grading, packaging and delivery. Chains are spreading their purchases and are showing a trend of preempting anticipated price rises. It is possible that with a large National flock this strategy will suppress traditional pre-Christmas increases. Industry observers and participants expect buyers to adjust purchases only in response to retail demand and will hold down inventories in their DCs and stores. Since the beginning of 2021 generic eggs have been priced, with a few exceptions, at levels to maximize store margins. This strategy noted during the past few weeks depresses the volume of sales to the disadvantage of the industry. Market data suggests that chains have priced generic white eggs in response to prevailing demand and are infrequently featuring generic Large or Extra large.

• Currently inventory although down comprises close to five days of production. Price movement over the past ten months and specifically since Labor Day, defies conventional supply to demand relationships and indicates extraneous factors affecting price. Wholesale Midwest prices for Extra- large and Large were higher this past week after sequential weekly declines. This suggests that prices that plateaued at the end of September and declined in October will stabilize into early November and then show a predicted seasonal increase. Prices in 2020 lagged corresponding weeks in 2020. The commercial shell-egg price discovery system is obviously used by buyers to negotiate lower prices, serving as a self-fulfilling prophecy and a de facto instrument of potential indirect, but not necessarily intentional, collusion. The current relationship between producers and chain buyers based on a single price discovery system constitutes an impediment to a free market. The benchmark price amplifies both downward and upward swings and functions to the detriment of the industry. A CME quotation based on Midwest Large, responding to demand relative to supply would be more equitable.

• The U.S. flock in production was up 0.3 percent (0.9 million hens) from the week of November 10th to 320.1 million consistent with seasonal depletions but with about 2.5 million molted hens having resumed production during the past month. The Industry previously demonstrated beneficial restraint in flock placement with continued depletions and non-restocking of some complexes or houses. The trend going forward through November is for a build in numbers through the end of December based on chick placement data for July and August. Margins will continue to increase for commodity eggs due to increased demand as predicated by prevailing seasonal wholesale prices over the past three years.

• The USDA average Midwest benchmark prices for generic Extra Large and Large were up 12.7 percent on average to 98.5 and 96.5 cents per dozen respectively and rising further this week. Mediums were up 3.9 percent to 80.5 cents per dozen. Third quarter prices reflected static demand, offset by increases in the U.S. flock in production during October. The trajectory of prices through late October suggested stabilization moving through the first week of November with increased seasonal demand coincident with the advent of colder weather. Prices going forward will be determined by the buyers for the major chains in response to consumer demand and their inventory levels. The spike in price for all categories may ebb after Thanksgiving as the pipeline is filled unless demand persists or is even intensified as consumers recognize the value of eggs as a source of inexpensive protein. Margins will be unaffected by stability in feed price. Higher chick, labor and fuel costs will detract from profit especially if unit revenue fails to match expectations in late November and pre-Christmas weeks in December.

• There is some prospect of a return of the food service sector with both frozen and dried-egg prices marginally higher over the past month. The economy is reopening with a recent decline in COVID incidence rates and hospitalizations in many regions. There is some optimism over the rate of deployment and acceptance of the three available approved vaccines and boosters especially in rural areas and inner city zones. Reopening of the economy and schools in specific areas with low population immunity has resulted in rises in the incidence rate of COVID. This is especially the case following the introduction and dissemination of the Delta variant of SARS-CoV-2 virus that is more infectious and possibly with higher pathogenicity than the alpha and beta strains, especially among the non-immunized proportion of the population that represent an overwhelming majority of those hospitalized.

• The Midwest price for breaking stock was up 11.1 percent to an average of 65.0 cents per dozen. Checks in the Midwest were up 6.2 percent to an average of 51.5 cents per dozen. It is anticipated that these prices will fluctuate in response to market trends and gradual recovery of the breaking sector.

OVERVIEW

Prices

According to the USDA Egg Market News Reports released on November 15th, the Midwest wholesale price for Extra-large was up 12.5 percent to an average of 98.5 cents per dozen; Large was up 12.9 percent to an average of 96.5 cents per dozen; Mediums were up 3.9 percent to 80.5 cents per dozen as delivered to DCs. Prices should be compared with the USDA benchmark average 6-Region blended nest-run, (excluding provisions for packing, packaging materials and transport) cost of 66.3 cents per dozen in October 2021. The progression of prices during 2021 to date is depicted in the USDA chart reflecting three years of data, updated weekly.

The November 15th 2021 edition of the USDA Egg Market News Report (Vol. 68: No. 46) documented a USDA Combined Region value rounded to the nearest cent, of $0.99 per dozen delivered to warehouses for the week ending November 6th 2021. This average price lags current Midwest weekly values by one week. The USDA Combined range for Large in the Midwest was $0.86 per dozen. At the high end of the range, price in the South Central Region attained $1.04 per dozen. The USDA Combined Price last week was equivalent to the 3-year average. This past week Midwest Large was approximately 25 cents below the corresponding week in 2020 that demonstrated a typical late Fall upturn. Prices are expected to rise through the Thanksgiving weekend.

OVERVIEW

The November WASDE documented the 2021growing season with no changes in harvest acreage of either corn or soybeans. The USDA ERS revised the projected ending stocks of corn, soybeans and soybean meal based on crop conditions and the harvest in progress. The corn acreage to be harvested is currently estimated at 85.1 million acres. Soybeans will be harvested from 86.4 million acres.

The November 2021 WASDE firm estimate of corn yield was raised 0.3 percent to 177.0 bushels per acre, based on completion of 85 percent of the corn harvest by November 7th, (175.8 bushels per acre in 2020). The estimate of soybean yield was lowered 0.6 percent to 51.2 bushels per acre based on completion of 87 percent of the harvest by November 7th, (50.7 bushels per acre in 2020). Final yield values will be adjusted subsequently based on harvest data.

The November 2021 USDA projection for the ending stock of corn was lowered by 0.5 percent to 1,493 million bushels despite a slightly larger harvest. Greater supply and lower exports, resulted in the projection of ending stock for soybeans being raised 6.3 percent to 340 million bushels.

Projections for ending stocks of both corn and soybeans have influenced recent CME price quotations concurrently with fluctuation in exports. China has placed orders in accordance with their needs and central Government policy rather than compliance with the Phase-One trade agreement of February 2020. The November WASDE projection retained the price of corn at $5.45 per bushel. Soybeans were reduced 2.0 percent to 1,210 cents per bushel. Soybean Meal was unchanged at $325 per short ton.

It is accepted that projections are based on the reality that China sharply increased purchases of commodities during the recently concluded market year partly to cover low stock caused by drought, and COVID-related disruptions in imports during the first quarter of 2020. China booked substantial orders for corn and soybeans from September 2020 onwards for the 2020-2021market year but is moderating orders now for the current market year. Reports on volumes of commodities exported to China and other nations are included in weekly editions of CHICK-NEWS and EGG-NEWS as USDA data is released.

CORN

The corn harvest for 2021 projected in the November 2021 WASDE Report #618 is 15,062 million bushels up 0.3 percent from the October report consistent with a 0.3 percent higher yield. The projected 2021 harvest can be compared to 14,507 million bushels in 2020 and is projected to be 0.6 percent lower than the previous 2016 record harvest of 15,148 million bushels. The “Feed and Residual” category was unchanged from the October report at 5,650 million bushels. The “Ethanol and Byproducts” category was raised 1.0 percent to 5,250 million bushels consistent with higher domestic demand for E-10 and other blends following relaxation of COVID-19 restrictions. Projected corn exports were held at 2,500 million bushels. Ending stocks were lowered by 0.5 percent to 1,493 million bushels.

The forecast USDA farm price for corn was reduced unchanged at 545 cents per bushel. At 14H00 on November 9th after release of the November WASDE the CME quotation for December corn was at 550 cents per bushel and up 6.7 percent from the quotation on November 9th and currently 1.8 percent above the USDA projection.

 NOVEMBER 2021 WASDE #618 PROJECTIONS FOR THE 2021 CORN HARVEST:

1 metric ton = 39.368 bushels

Average Farm Price: $5.45 per bushel. (Unchanged from the October 2021 WASDE Report)

SOYBEANS and SOYBEAN MEAL

USDA decreased the projection for the 2021 soybean crop to 4,425 million bushels based on a revised November WASDE projection of a yield of 51.2 bushels per acre. With respect to use parameters, crushings were retained at 2,190 million tons. Projected exports were lowered by 40 million bushels from October to 2,050 million bushels, consistent with lower orders from China during the 2021-2022 market year. This is attributed to their current requirements for imported ingredient for animal feed and also to lock-in prices on a static or declining market rather than through any sense of obligation to comply with the February 2020 Phase-One Trade Agreement. From early October 2020 to the present, prices increased in response to bookings for the 2020-2021market year. Prior to 2018 our largest trading partner for agricultural commodities imported the equivalent of 25 percent of U.S. soybeans harvested. Ending stocks were raised 8.4 percent to 340 million bushels up from 320 million bushels in the October 2021 WASDE.

The USDA projection for the ex-farm price for soybeans for the 2021 harvest was lowered 25 cents per bushel to 1,210 cents per bushel. At 14H00 on November 9th following release of the WASDE, the CME quotation for November 2021 delivery was 1,201 cents per bushel, up 6 cents or 0.5 percent compared to the October 12th 2021 quotation for November delivery and 0.8 percent below the November USDA-WASDE projection for 2021.

NOVEMBER 2021 WASDE #618 PROJECTION FOR THE 2021 SOYBEAN HARVEST:-

1 metric ton = 76.34 bushels

Average Farm Price: 1,210 cents per bushel (Down 25 cents per bushel from the October 2021 WASDE Report)

The projected supply of soybean meal was increased by 0.4 percent to 52.5 million tons based on higher production. Domestic use was raised to 37.9 million tons. Exports were unchanged at 14.20 million tons. The USDA lowered the projected ex plant price of soybean meal by $35 per ton from September to $325 per ton. At 14H00 on November 9th the CME quotation for December 2021 delivery of soybean meal was $343, up $31 per ton or 9.9 percent compared to the October 12th CME quotation and 6.8 percent above the October USDA-WASDE projection for 2021.

NOVEMBER 2021 WASDE #618 PROJECTION OF SOYABEAN MEAL PRODUCTION AND USE

1. = million

Average Price ex plant:$325 (Unchanged from October 2021 WASDE Reports)

IMPLICATIONS FOR PRODUCTION COST

The price projections based on CME quotations for corn and soybeans suggest increasing production costs for broilers and eggs. Going forward, prices of commodities will be determined by World supply and demand and U.S. domestic yield, use and exports.

• For each 10 cents per bushel change in corn:-
• The cost of egg production would change by 0.45 cent per dozen
• The cost of broiler production would change by 0.25 cent per live pound
• For each $10 per ton change in the cost of soybean meal:-
• The cost of egg production would change by 0.44 cent per dozen
• The cost of broiler production would change by 0.25 cent per live pound.

WORLD SITUATION

With respect to world coarse grains and oilseeds the November WASDE Report included the following appraisals by USDA:-

CORN AND COARSE GRAINS

Global coarse grain production for 2021/22 is forecast 5.1 million tons higher to 1,499.0 million. This month’s 2021/22 foreign coarse grain outlook is for larger production, increased trade, and higher stocks relative to last month. Foreign corn production is forecast higher as increases for Argentina, the E.U., and several African countries more than offset a decline for the Philippines. For Argentina, production is raised mostly reflecting increased area expectations for late-planted corn. Corn production in the EU is higher based on increases for Poland, Romania, and France. Foreign barley production is lowered based on declines for Turkey, the EU, Russia, and Ukraine.

Corn exports are raised for Argentina and the EU but lowered for Bangladesh. Corn imports are raised for Iran and Thailand but lowered for Nigeria and Turkey. For 2020/21, corn exports for Argentina are raised but reduced for Brazil for the local marketing year beginning March 2021, based on shipments observed through October. For 2021/22, barley imports are raised for China and Turkey but reduced for Saudi Arabia. Foreign corn ending stocks are higher relative to last month, reflecting increases for China, Brazil, Burkina Faso, and Angola. Global corn ending stocks, at 304.4 million tons, are up 2.7 million.

OILSEEDS

Global 2021/22 soybean production is reduced 1.1 million tons to 384.0 million as lower production for the United States and Argentina is partly offset by higher Indian production. Argentina’s production is lowered 1.5 million tons to 49.5 million on a lower harvested area. Production for India is raised 0.9 million tons to 11.9 million based on data from the Soybean Processors Association of India. Global soybean exports are lowered 1.0 million tons to 172.1 million, with lower exports for Argentina and the United States partly offset by higher exports for Brazil and India. With lower exports, China’s imports are reduced 1.0 million tons to 100 million. Global soybean stocks are reduced 0.8 million tons to 103.8 million as lower stocks for Argentina and China are partly offset by higher U.S. stocks

Updated World production and use of total grains and oilseeds is summarized for the 2020/2021 season taking into account Northern and Southern Hemisphere production:-

*Values rounded to million metric ton

(1 metric ton corn= 40 bushels) (“ton” represents 2,000 pounds)

REVIEW OF OCTOBER 2021 EGG PRODUCTION COSTS AND STATISTICS.

HIGHLIGHTS

• October 2021 USDA ex-farm blended USDA nest-run benchmark price was 77.7 cents per dozen, 20.4 percent lower than the September 2021 value of 97.6 cents per dozen. Year-to-date average USDA benchmark price is 79.7 cents per dozen. The average monthly USDA benchmark ex-farm price for 2020 was 76.5 cents per dozen with a range of 52.9 cents per dozen in January to 159.7 cents per dozen in March during COVID hyper-demand. Currently stock levels and prices indicate a relative balance between supply and demand. Prevailing wholesale prices are largely dependent on retail sales despite moderate over-production, continued diversion from the egg-breaking sector and downward distortion attributed to the price discovery system.
• October 2021 USDA average nest-run production cost was 0.3 cents per dozen (0.4 percent) lower than in September 2021 to 66.3 cents per dozen, mainly attributable to a 0.6 percent lower average feed cost.
• October 2021 USDA benchmark nest-run margin attained a positive value of 11.4 cents per dozen compared to a margin of 31.0 cents per dozen for September 2021.
• September 2021 national flock in production (over 30,000 hens/farm) was up 2.5 million hens to 305.6 million. There are approximately 3.0 million hens due to return to production from molt in November together with a projected maturation of 25.0 million pullets, with this complement to be offset by depletion of spent flocks.
• September 2021 pullet chick hatch was down 1.2 percent or 0.3 million from August 2021 to 24.6 million indicating concern over recent low prices.
• September 2021 export of shell eggs and products combined was up 13.7 percent from August 2021 to 1,098,000 case equivalents representing the theoretical production of 16.0 million hens. Increased imports by South Korea will progressively decline as flocks depleted by HPAI are restored.

INTRODUCTION.

Summary tables for the latest USDA October 2021 prices and flock statistics made available by the EIC on November 6th 2021 are arranged, summarized, tabulated and reviewed in comparison with values from the previous October 9th 2021 posting reflecting September 2021 cost and production data.

COSTS & REVENUE

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

Notes: 1. Rounded to decimal of a cent

Export of Shell Eggs and Products, January-September 2021.

USDA-FAS data collated by USAPEEC, reflecting export volume and values for shell eggs and egg products are shown in the table below comparing January-September 2021 with the corresponding months in 2020:-

U.S. SHELL EGG AND EGG PRODUCT EXPORTS DURING

JANUARY-SEPTEMBER 2021 COMPARED WITH 2020

Source USDA-FAS/USAPEEC

SHELL EGGS

Shell egg exports from the U.S. during January-September 2021 increased by 43.2 percent in volume and 77.2 percent in total value compared to the corresponding months in 2020. Unit value was 19.0 cents higher to $1.01 per dozen for the comparison between 2020 and 2021. The top two importers, Hong Kong and Mexico combined, represented 52.7 percent of volume and 43.3 percent of total value.

Mexico was the leading importer of shell eggs during January-September 2021 with 43.4 million dozen representing 27.4 percent of volume and 21.4 percent of total value corresponding to a unit value of $0.79 per dozen. Prospects for additional sales will depend on continued acceptance of washed, white-shelled eggs held under refrigeration for retail sale, first announced in September 2018 but implemented in late 2019. For January-September, 2021 imports of shell eggs by Mexico increased by 9.9 percent in volume and 31.1 percent in value compared January-September 2020. During September export volume to Mexico declined 4.4 percent from August 2021. For September 2021, 2nd ranked Mexico received 4.3 million dozen valued at $3.4 million.

Hong Kong was the second-ranked importer of shell eggs in January-September 2021, with 40.0 million dozen representing 25.2 percent of volume and 21.9 percent of the $159.7 million total value of U.S. shipments of shell eggs. Average unit value was $0.88 cents per dozen, lower than the average prevailing nest-run USDA benchmark price during January-August 2021.

South Korea was the 3rd-ranked importer receiving 37.3 million dozen during February-September with 2.7 million dozen in February, 1.6 million dozen in both March and April, 5.1 million dozen in May 2021. Volume declined to 3.4 million dozen in June but increased to 4.0 million dozen in July rising successively to 8.1 million dozen in August and 9.3 million dozen with South Korea the leading importer for the past two months. The value for 2021 year-to-date was $45.8 million with a unit price of $1.23 per dozen. Importation of U.S. eggs is necessitated by severe losses in laying flocks due to H5N8 avian influenza. Flocks are being restored with an inevitable future decline in requirements.

Canada was 4th-ranked with increased imports of shell eggs during the first nine months of 2021 to 16.4 million dozen up 19.7 percent from 13.7 million dozen during the corresponding period in 2020 impacted by COVID. Value attained $17.2 million, 11.7 percent more than in January-September 2020 with a unit price of $1.01 per dozen. During September Canada imported 2.3 million dozen eggs. Canada imports shell eggs from the U.S to supplement domestic supply that is constrained by the national managed production program.

The Middle East Region imported 6.6 million dozen during January-September 2021 valued at $6.3 million with a unit price of $1.00 per dozen. Volume of 6.6 million dozen in 2021 was 25.0 percent lower than in January-September 2020. Southern E.U. nations in addition to India, Poland and the Ukraine have a competitive advantage in this market limited only by outbreaks of avian influenza, antibiotic residues and SE.

The Caribbean Region represented 2.6 percent of export volume and 4.9 percent of value for January-September 2021. The unit value of shell eggs exports to the Caribbean apparently averaged $1.28 per dozen, ($1.22 during 2020). 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.

EGG PRODUCTS

The total volume of exported egg products during January-September 2021 decreased by 2.5 percent to 27,975 metric tons compared to 2020. Total value of $81.3 million was higher by 6.0 percent compared to January-September 2020. Unit value increased by 8.8 percent to $2,983 per ton from $2,742 recorded for January-September 2020. This fluctuation reflects the relationship between World supply and demand with Ukraine and India as significant exporters. During September 2021 the U.S. exported 3,137 metric tons of egg products valued at $9.8 million with a unit price of $3,124 per metric ton. Shipments in September were 10.5 percent higher than in August 2021 and 42.7 percent higher than September 2020

 Japan was the leading importer over the past nine months based on a value of $32.8 million and a volume of 9,393 metric tons that represented 34.5 percent of the total U.S. exports of egg products, an increase of 41.9 percent compared with the first nine months of 2020. The high unit value of $3,492 per metric ton compares with the average value for all U.S. exports of egg products with a unit value of $2,983 or $2,715 excluding Japan. The discrepancy in unit price reflects the product mix. With conclusion of a bilateral trade agreement the U.S. will no longer be at a competitive disadvantage with respect to the E.U. In September 2021 Japan imported 1,108 metric tons almost the same quantity as compared to August 2021.

Canada was the 2nd in rank among importers, purchasing 4,947 metric tons over the first nine months of 2021 comprising 18.2 percent of volume and 13.9 percent of value with a unit price of $2,284 per metric ton. During January-September 2021 Canada decreased volume by 5.8 percent and value by 11.7 percent compared to January-September 2020 reflecting restoration of the institutional and food service sectors. In September Canada was the 3rd- ranked importer with a 12.5 percent decrease in volume from August 2021 to 537 metric tons.

South Korea ranked 3rd among importers with 4,401 metric tons of egg products over January-September 2021 up 252.6 percent from 2020 due to a decline in domestic supply as flocks were depleted due to avian influenza. In September 2021 South Korea was second among importers with 656 metric tons valued at $1.5 million up 58.0 percent from August 2021 denoting higher domestic demand relative to the increasing supply from restored flocks.

Mexico was the 4th-ranked importer based on volume and 3rd ranked on value during January-September 2021. Mexico received a volume of 4,431 metric tons comprising 16.3 percent of export volume and 12.1 percent of value with a unit price of $2,212 per metric ton. Mexico reduced volume over the nine-month period compared to 2020 by 46.7 percent. In September Mexico was 4th- ranked receiving shipments of 302 metric tons, 15.6 percent less than in September 2020.

Notable changes during January-September 2021 included an 83.2 percent decrease in exports to the UK+EU to 282 metric tons representing 1.0 percent of volume valued at $4.2 million at a unit price of $1,489 per metric ton.

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 late 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. During the first eight months of 2021 the value of shell eggs and egg products attained $64.3 million or 30.8 percent of combined export value.

In addition to landed cost, logistics and availability prospects for long-term exports of shell eggs will be limited by disease considerations. Exports will be dependent on the willingness of importers to accept the World Organization for Animal Health (OIE) principle of regionalization in the event of outbreaks of exotic Newcastle disease or isolation of either H5 or H7 avian influenza (AI), 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.

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

EGG-NEWS summarizes and comments on data and trends in the monthly USDA Cage-Free Report, correlating and interpreting the data posted weekly on the EGG-NEWS Egg Weekly Price and Inventory Report.

The USDA Cage-Free Report for October 2021, released on November 1 st documented a 0.3 percent increase (0.1 million) in the population of hens producing under the Certified Organic Program to 17.5 million (rounded to 0.1 million). Cage-free flocks that apparently remained unchanged from April through July 2021 at 68.5 million increased by 0.4 percent (0.3 million hens) from September (75.1 million) to 75.4 million in October. 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. It is evident that a noteworthy proportion of organic and cage-free eggs are down-priced to the generic category when comparing Nielsen retail sales data with potential production based on hen numbers as documented by the USDA.

Average flock production was increased by 0.8 percent for both categories of non-caged hens to 80.3 percent. This reflects on average a younger flock compared to September. Seasonally, younger flocks increase the availability of cage-free and organic eggs in response to pullet chick placements in anticipation of both pre-Christmas and pre-Easter demand. Average flock production in September represented the balance between older flocks and the relative production from pullet chicks placed during April 2021 together with molted flocks resuming production during the month.

Negotiated nest-run cage-free price for October averaged $0.96 per dozen. October retail prices were higher than September consistent with increased demand for eggs from all flock categories. In reality a substantial proportion of both cage free and organic production is downgraded to commodity eggs.

The disparity between wholesale and retail prices indicates that retailers are maximizing margins. This strategy restricts volume of sales and is to the disadvantage of producers.

Based on the importance of cage-free production, the USDA-AMS issues the 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 usually after the end of a quarter or a delay in release of the monthly report. It is suggested that USDA should consider a quarterly report with more accurate and consistent hen data. This would 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.

The American Egg Board (AEB) as a service to the industry recently made available Nielsen data reflecting 52-week rolling sales and consumption of eggs and egg products for the week ending July 17th 2021.  Nielsen data captures retail volume and sales value of shell eggs, consumer-packed liquid and cooked peeled eggs. Data is derived from supermarkets, groceries, dollar outlets, drug and convenience stores all with annual sales in excess of $2 million. Some club warehouses provide data but Costco is excluded.
 

The data assembled by Nielsen and distributed by the AEB for the past 52-weeks to July 17th documented 3.22 billion dozen egg-equivalents over the 52-week period. This represents 39.9 percent of 2020 egg production totaling 8.06 billion dozen or capture of approximately 65 percent of the shell egg segment of the industry.

• For the 52-week period, retail sales of all egg categories (shell, consumer liquid, hard cooked, peeled) expressed as egg-equivalents decreased 2.5 percent.  Dollar value was 1.7 percent lower than the previous 52-week period.  Per capita consumption in 2020 advanced to 286.5 eggs representing a 2.4 percent decline as a result of COVID restrictions during the 1st Quarter of 2020. Direct comparisons between 2020 and 2021 are distorted by the late March and April 2020 panic buying in response to COVID restrictions. The projected per capita consumption of 285.3 eggs in all egg forms in 2021, is down 0.4 percent from 2020.

• On a rolling 52-week basis, the volume captured by Nielsen comprising retail shell-egg sales attained 3.10 billion egg equivalent dozens representing a 2.9 percent decrease in volume and a 2.3 percent decrease in dollar value to $5.93 billion.  Egg alternatives including liquid, frozen and powdered egg products converted to equivalent dozens attained 94.2 million a 9.9 percent increase over the previous 52-week period and an 8.5 percent increase in value to $304.9 million. Rolling 52-week hard boiled peeled egg sales attained 30.7 million dozen amounting to a 3.6 percent increase in volume and a disproportionate 1.7 percent decline in value.

• In classifying retail sales by product segment, conventional eggs represented 84.6 percent, cage-free 12.5 percent and organic 2.9 percent by proportion. Rolling 52-week conventional egg sales decreased 11.1 percent in volume and 14.3 percent in value.  Cage-free eggs decreased 0.4 percent in volume and increased 18.0 percent in value.  Organic eggs decreased 4.7 percent in volume and rose 16.3 percent in value.

• With respect to volume of other than generic shell eggs, 52-week rolling branded egg sales comprised 29.2 percent of retail sales compared to 70.8 percent for private label.  Branded eggs generated 42.9 percent of dollar value compared to private label at 57.1 percent.  Branded eggs declined by 9.3 percent in volume and 8.4 percent in value.

• In analyzing retail channels for shell eggs, 52-week rolling values compared to the previous period, supermarkets and groceries decreased by 11.7 percent, drugstores declined by 27.8 percent, convenience stores were down by 8.6 percent and the combination of club stores and dollar stores (excluding Costco- an important deletion given their volume) decreased by 6.3 percent presumably with the largest contribution from big-box club stores other than Costco.

In reviewing July USDA data there are 68.5 million hens in barns and aviary houses producing cage-free eggs, excluding 17.5 million non-caged hens under the Certified Organic program. The complement of cage-free hens represents 30.4 percent of an assumed population of 225 million hens in the shell-egg segment of production. If USDA data on hens under cage-free housing (aviaries and barns) are accurate and accepting the Nielsen data indicating a sales proportion of 12.5 percent for this category, more than half of cage-free eggs are down-marketed to conventional brown and white shelled product. If the Nielsen data is accurate the situation with Certified Organic is even more extreme with 7.8 percent of 225 million hens producing under the category but representing 2.9 percent of shell egg sales YTD. The differences between potential production and recorded sales cannot be ascribed to use of cage-free and organic eggs in egg liquids. The nominal (pre-COVID) complement of hens producing eggs for the breaking segment is estimated at 95 million, predominantly as generics.

The USDA quarterly Grain Stocks Report released on September 30th 2021 documented storage of commodities produced in the U.S., classified according to on-site and remote facilities including elevators and commercial installations. Quantities of corn and soybeans, the two major commodities relevant to poultry production were stated to be:-“

“Old crop corn stocks in all positions on September 1st 2021 totaled 1.24 billion bushels, down 36 percent from September 1st 2020. Of the total stocks, 395 million bushels are stored on farms, down 47 percent from a year earlier. Off-farm stocks, at 842 million bushels, are down 28 percent from a year ago. The June to August 2021 indicated disappearance is 2.87 billion bushels, compared with 3.08 billion bushels during the same period last year. Based on an analysis of end-of-marketing year stock estimates, disappearance data for exports, and farm program administrative data, the 2020 corn for grain production is revised down 71.0 million bushels from the previous estimate”.

“Old crop soybeans stored in all positions on September 1st 2021 totaled 256 million bushels, down 51 percent from September 1st 2020. Soybean stocks stored on farms totaled 68.1 million bushels, down 52 percent from a year ago. Off-farm stocks, at 188 million bushels, are down 51 percent from last September. Indicated disappearance for June to August 2021 totaled 513 million bushels, down 40 percent from the same period a year earlier. Based on an analysis of end-of-marketing year stock estimates, disappearance data for exports and crushings, and farm program administrative data, the 2020 soybean production is revised up 80.8 million bushels from the previous estimate”.

Prices and commentary are incorporated in the Weekly Commodity Report in this edition and will be updated in the mid-month WASDE #617 issued in October.