Egg Industry Statistics and Reports


Commodity Report

03/07/2024

WEEKLY ECONOMY, ENERGY AND COMMODITY REPORT: March 7th 2024.

 

OVERVIEW

 

Prices for feed ingredients were approximately two percent higher compared to last week. Prices were influenced by short covering arising from geopolitical concerns and revised projections for crop sizes in Brazil. Secondary factors included disruption in shipping in the Red Sea and Panama Canal, carryover from the 2023 U.S. crop, export orders and predicted ending stocks of corn and soybeans for the 2024 crop. There was also positioning ahead of the March WASDE

 

At 14H00 on March 7th the CME price for corn was up 2.8 percent compared to the previous week to 426 cents per bushel for March delivery. Corn price was influenced by lower ethanol demand and the proportionally high ending stock of corn from the 2023 crop. Export orders for the current market year have increased in response to lower prices. Volumes and prices are indirectly influenced by events in the Black and Red Seas. Orders by China resumed at the end of the 2022-2023 market-year and have extended through to March with a slightly lower Dollar Index assisted by low FOB prices but with higher ocean freight. Total exports for the current market year are 32.9 percent higher than for the corresponding week during the 2022-2023 year.

Soybeans were up 2.1 percent from last week to 1,153 cents per bushel for March 2024 delivery. Gains were attributed to short covering and lower projections for the 2024 Brazil harvest. Total exports for the current market year are 19.3 percent lower than for the corresponding week in the 2022-2023 year.

 

Soybean meal was up 1.5 percent to $338 per ton for March delivery compared to $333 per ton last week. Price was influenced by demand coupled with high crush volumes for three consecutive months through December but with volume reduced in January by cold weather. Price will fluctuate to reflect the CME price for soybeans and the rising demand for biodiesel. The market previously responded to the increased 2023 crop and higher stocks together with projections for 2024 included in the February WASDE Report.

 

 WTI was 1.1 percent higher from last week to $79.38 at 09H00 on March 6th with low world demand in relation to supply. The rise in price is inconsequential in the face of disruption of shipping in the Red Sea, turbulence in the Middle East and is countered by U.S. production of 13 million barrels per day with ample reserves. The small upward trajectory in price may continue if production cuts by OPEC amounting to 2 million barrels per day and extended through June actually materialize. There was little inter-day fluctuation in price during the week ($79.14 to $80.19 range) with a small upward trend. Crude oil inventory in the U.S., other than the Strategic Reserve, was up 2.3 percent to 31.7 million barrels last week following the seasonal trend. The U.S.is now producing 13 billion barrels of crude each day, constraining domestic and international prices

 

Factors influencing commodity prices in either direction over the past four weeks included:-

  • Weather conditions in areas of the World growing corn and oilseeds especially in Brazil and also Argentine with favorable rain recently under the influence of a strong El Nino The 2023 U.S. harvest was completed ahead of the corresponding weeks in 2022 with higher carryover (downward pressure).
  • Geopolitical considerations continue to move markets, especially in the Mideast. Cancellation of the BSGI in July and ongoing attacks on Ukraine port facilities impacted prices of wheat, corn, oilseeds and vegetable oils. Loaded bulk vessels are sailing from Black Sea and Danube River ports using the ‘Humanitarian Corridor” to various destinations. This route is operational despite threats by the Russian Federation to mine the entrance to ports and deploy airborne missiles. Exports from Ukraine are approaching 1.5 million metric tons per week with a total of 26 million metric tons market year to date, down 11 percent from the equivalent period for 2022-2023 year. Grain production in Ukraine during the current year will be lower than 2022/2023 (Downward pressure on corn and wheat and an indirect effect on soybeans)
  • Macroeconomic U.S. factors:-
  • Most economists in academia and the private sector are confident of a “soft landing” for the economy following the release of revised Q4 2023 GDP and recent releases of economic parameters including the CPI and anticipated PPI and a decline in bond rates. Annual inflation as measured by CPI declined from 8.9 percent in June 2022 to 3.1 percent in January 2024. This is in part a response to a series of 11 FOMC rate raises that curbed inflation and cooled the labor market but without precipitating unemployment. There is evident stability in the bank sectors in both the U.S. and Europe. Large U.S. banks passed stringent mid-year “stress tests”. There is now concern over regional banks with exposure to commercial real estate.
  • The Federal Reserve held the benchmark interest rate steady at the monthly FOMC meeting on January 31st 2024, the fourth sequential pause. The Federal Reserve commentary indicated that the rate would be held at 5.25 percent until a pivot with possibly two to three reductions of 25 basis points each in 2024, after the June meeting at the earliest. Chairman Powell in Congressional testimony and documented in FOMC minutes has indicated that decisions would be based on data and demonstrable progress in reducing inflation to achieve an annual 2.0 percent target by mid-2025. Market optimism with projections of five reductions during 2024 now appear unrealistically optimistic, with no reduction expected before June
  • The February 28th Bureau of Economic Affairs announcement of the advanced estimate of Q4 GDP confirmed a value of 3.2 percent, slightly below the consensus estimate of 3.3 percent. The rise was attributed to increased consumer and government sector spending and investment in inventory.
  • The February 8th 2024 S&P Manufacturing Purchasing Managers’ Index Report (PMI) rose to 51.8 in January from 51.0 in December 2023. The PMI is approximately three percent below the 10-year average preceding the COVID years. The recent upward trend suggests recovery from the effects of successive raises in the Federal reserve benchmark interest rate.
  • On February 29th the Bureau of Economic Analysis released the January Personal Consumption and Expenditure Price Index (excluding food and energy) that was up 0.4 percent from the previous month. This was in line with estimates. Food prices increased 0.5 percent but energy was down 1.4 percent. The Index was up 2.4 percent year-over-year also corresponding to estimates. Food prices were up 1.4 percent and energy down 4.9 percent year-over-year. The PCPI is closely followed by the Federal Reserve and confirms declining inflation.
  • The February 13th Bureau of Labor Statistics release of the January 2024 CPI confirmed a 0.3 percent increase from December 2023. The annual increase of 3.1 percent was down from 3.4 percent in December but higher than the anticipated value of 2.9 percent. The increase in the core value (excluding food and energy) was 0.4 percent, and 3.9 percent for the 12-month period, in line with estimates. Food at home was up 0.4 percent from the previous month. Food away from home was up 0.5 percent from December. On an annual basis all food was up 2.6 percent with food at home up 1.2 percent and food away from home up 5.1 percent. Energy was down 0.9 percent in January and down 4.6 percent over 12-months, mainly due to a decline in gasoline (-6.4 percent) and fuel oils (-14.2 percent). The shelter category was up 0.6 percent for the month and 6.0 percent over the past year. The macro trend is clearly towards reduced inflation due to a fall in energy prices. The CPI influences FOMC rate decisions
  • The January Producer Price Index for Final Demand (PPI) released on February 16th was up by 0.3 percent from December and up 0.9 percent over the past 12-months. This is compared to a 6.4 percent increase in 2022. The reduction was attributed mainly to 0.2 percent decline in final demand for goods and the concurrent cost of energy. The core PPI value excluding volatile fuel and food, was up 0.6 percent for January and up 2.6 percent for the 12-month period. Food was down 0.3 percent compared to a 0.7 percent decrease in December and 1.5 percent over 12-months.
  • A Federal Reserve release on February 15th confirmed that industrial production fell 0.5 percent in January against a projection of a 0.1 percent rise in December. Production was adversely affected by inclement weather during January 2024 with plant closures. Capacity utilization was down 0.2 percent to 78.5 percent, 1.1 percent below the 1972-2020 average.
  • The February 26th report on Durable Goods Ordered for January 2024 was unexpectedly lower by 6.1 percent against a consensus estimate of a 4.5 fall. Transportation and specifically aircraft orders were down 16.2 percent. Excluding the Transportation component, new orders decreased by 0.3 percent in January impacted by inclement weather. Shipments of durable goods decreased 0.9 percent following a fall of 0.6 percent in December 2023.
  • The February 15th release of retail sales data showed a monthly fall of 0.8 percent in January against an expected 0.1 percent decline. This value is compared to the revised 0.4 percent rise in December 2023. Core retail sales increased 0.6 percent in January. Retail sales in January were affected by harsh winter storms and a change in the basis of calculation. The Federal Reserve FOMC closely monitors this index as a measure of the trend in inflation.
  • The February 1st ISM® Manufacturing Index for January rose to 49.1 from 47.4 in December.
  • The Conference Board Consumer Confidence Index released on February 27th for January/February, declined to 106.7 points. This reading was down from a revised 110.9 for the preceding four-week period.
  • The March 1st University of Michigan Index of Consumer Sentiment fell to 76.9 for February down from a revised 79.0 in January. The Index was up 14.9 percent from February 2023. Both the Current Economic Index (79.4 slightly down from 81.9 in January) and the Index of Consumer Expectations (75.2 down from 77.1 in January) denote a cautious increase in consumer sentiment influenced by lower interest rates and moderating inflation despite geopolitical concerns.
  • Non-farm payrolls increased by 275,000 in February as documented by the Bureau of Labor Statistics on March 9th more than the 200,000 forecast. This compares to the revised 229,000 value for January. The increase is attributed to workers in the  health care and government sectors. The unemployment rate edged up to 3.9 percent from 3.7 percent with 6.5 million unemployed. Real average weekly earnings for January showed a 0.6 percent increase over December. Average hourly earnings rose 0.1 percent to $34.57 in February up 4.3 percent over 12 months. Wage rates are closely followed by the Federal Reserve.
  • The Bureau of Labor Statistics Job Openings and Labor Survey report released on January 30th estimated 9.0 million job openings in December, unchanged from November and consistent with estimates. The December job openings number was the lowest value in 32 months.
  • The seasonally adjusted initial jobless claims figure released on March 7th was unchanged from the revised seasonally adjusted 217,000 for the week ending March 1st, but higher than the Reuters estimate of 215,000. The four-week moving average fell 750 to 212,250 The Bureau of Labor Statistics estimated 1.91 million continuing claims for the week ending February 24th up 8,000 from the previous week. There is evidence from data over the past three months that the labor market is cooling despite sporadic weekly reduction in new claims.
  • The February 1st Bureau of Labor Statistics report recorded a 3.2 percent increase in non-Farm Productivity for Q4; Unit Labor Cost was up by 0.4 percent on a normalized basis and Hours Worked was up by 0.4 percent in Q4
  • The ADP® reported on March 6th that private payrolls increased by 140,000 in February, up 29,000 from the revised 111,000 in January and compared to the Reuters estimate of 150,000 jobs. The increase in employment was mostly in the construction, transport and trade sectors. Annual pay was up 5.1 percent year-over-year compared to 5.3 recorded for January. The increase will not directly influence the probability of short-term future changes in interest rate since the ADP® is regarded by the FOMC as an unreliable statistic

 

FACTORS INFLUENCING COMMODITY PRICES

  • The 2023 harvests of corn and soybeans were completed by late November 2023. The February 8th WASDE provided a projection for acreage to be planted, yields, crop size and ending stocks for the 2024 crop.
  • It is evident that both polarization in the closely divided chambers of Congress and intra-party conflict between and among both sides of the aisle in the House will delay adoption of appropriations bills. Passage of the 2023 Farm Bill will be contentious and is subject to a 12-month extension as a stop-gap measure. Progress on the 2023 Farm Bill has been impeded by contention over SNAP eligibility and other entitlements that collectively represent 75 percent of total expenditure. The August 2nd downgrade of U.S. debt from AAA to AA+ by Fitch Ratings recognizes Congressional dysfunction. On November 10th 2023 Moody’s downgraded U.S. credibility from ‘stable’ to ‘negative’ based on an inability to pass required fiscal legislation. The House failed to pass eleven appropriations bills and passed an 11th hour continuing resolution deferring action to November 17th to finance the Federal government. Again failure to enact appropriations bills resulted in a second continuing resolution on November 15th freezing spending at FY 2013 levels pending votes on appropriations with extended deadlines of January 19th and February 2nd Little progress occurred in the closely divided House under current leadership with distraction caused by peripheral issues including dissention over the border situation, foreign aid and the magnitude of the national debt. A third continuing resolution was passed on January 18th extending the laddered deadlines to March 1st and 8th respectively. A Federal shutdown should be avoided with passage of a continuing resolution on Friday March 1st There are questions concerning the assurance from Speaker Mike Johnson (R-LA) and Senate Majority Leader Chuck Schumer (D-NY) that an agreement has been reached on six appropriations bills to be enacted before March 8th with the remainder before March 22nd The House approved theappropriations bills on March 7th with the Senate concurring on March 7th averting a partial government shutdown.
  • The delayed 2023 Farm Bill is mired in conflict in both the House and Senate. There is no consensus on major issues comprising the magnitude of SNAP payments and eligibility and requested price supports for crops. The Chair of the Senate Agriculture Committee Sen. Debbie Stabenow (D-MI) is standing firm on maintaining both SNAP-WIC benefits and climate remediation funding even if the Farm Bill is delayed through to the 119th Congress
  • The February 8th WASDE #645 Projected both corn and soybean production parameters with a potential record corn harvest for the 2024 crop. There will be ample world availability of ingredients although inequitable distribution will result in shortages in some nations. Soybean exports will comprise 39 percent of the 2024 U.S. crop with a 12.5 percent increase in ending stock. (See February WASDE Report under the Statistics TAB confirming availability, use and ex-farm price projections. March WASDE to be posted next week)
  • There is an expectation that for market-year 2023-2024, Brazil will harvest 148 million metric tons (5,438 million bushels) of soybeans down from a previous estimate of 155 million metric tons (5,695 million bushels) Exports of 100 million metric tons (3,674 million bushels) are anticipated and Brazil will crush 56 million metric tons (2,057 million bushels). A corn harvest of 129 million metric tons (5,027 million bushels) is anticipated with export of 54 million metric tons (2,125 million bushels). (Lower prices in the future subject to favorable reports on crop progress and actual harvests)
  • The Dollar Index (DXY) was 103.3 on March 6th, down 0.5 point from last week but under a three-month high with fluctuation following uncertainty over future interest rates and prospects of a prolonged delay in the anticipated pivot by the Federal Reserve FOCM. The DXY has ranged from 99.0 to 107.0 over the past 52 weeks. The dollar index influences timing and volume of export orders and indirectly the price of WTI crude.

 

EXPORTS

 

The FAS Export Report for corn, released on March 7th for the week ending February 29th confirmed that outstanding export orders for corn amounted to 17.87 million metric tons (703.4 million bushels). Net orders for the past week for the 2023-2024 market year amounted to 1.11 million metric tons (43.67million bushels). Shipments recorded during the past working week amounted to 1.16 million metric tons (45.62 million bushels). For the current market year to date cumulative export of 21.36 million metric tons (840.61 million bushels) is 32.9 percent higher compared to the equivalent week of the previous market year. For market year 2024-2025 outstanding orders attained 1.62 million metric tons (63.72 million bushels) with no orders this past week

(Conversion 39.36 bushels per metric ton. Quantities in metric tons rounded to 0.1 million)

The FAS Export Report for soybeans covering the week ending February 29th reflecting market year 2023-2024, recorded outstanding export orders amounting to 5.52 million metric tons (202.7 million bushels). Net orders this past week attained 0.61 million metric tons (22.5 million bushels). Shipments for the past working week attained 1.42 million metric tons (52.10 million bushels). For the current market year to date cumulative exports of 33.92 million metric tons (1,246 million bushels) are 19.3 percent lower compared to the equivalent week of the previous market year. Outstanding orders for the 2024-2025 market year amount to 255,800 metric tons (9.39 million bushels) with 66,000 metric tons ( 2.42 million bushels) ordered this past week.

 (Conversion 36.74 bushels per metric ton)

 

For the week ending February 29th 2023 outstanding orders for soybean meal and cake attained 3.64 million metric tons. Net orders this week for soybean meal and cake amounted to 157,700 metric tons. During the past week 384,400 metric tons of meal and cake combined was shipped. The quantity exported to date is 16.8 percent higher than the volume for the corresponding weeks of the previous market year. For the next market year outstanding sales have attained 82,300 metric tons with 64,700 tons ordered this past week.

 

The February 8th 2023 WASDE projected:-

  • Corn area planted for all purposes in 2024 (‘new crop’) will attain 94.6 million acres, down 0.3 from last year. According to the February WASDE, yield was projected at 177.3 bushels per acre with a resulting production of 15,342 million bushels with 2,172 million bushels as ending stock. The USDA retained the average ex-farm price to 480 cents per bushel for the 2024 crop.
  • Soybean area to be planted for 2024 will attain 83.6 million acres, unchanged from 2023. According to the February WASDE, yield was predicted at 50.6 bushels per acre with production of 4,165 million bushels with 315 million bushels as ending stock. The USDA estimated an average season price of 1,265 cents per bushel.
  • Crushers are expected to produce 54.15 million tons of soybean meal. Ending stocks will attain 400,000 tons. The USDA held the average projected price at $380 per ton.
  • At the 100th Annual Agricultural Outlook Forum in mid-February, Dr. Seth Meyers revised areas to be planted to the two major crops in 2024. Corn will be planted over 91.0 million acres, down 3.8 percent from 2023. Soybean acreage will increase 4.7 percent to 87.5 million acres.

 

The preference for planting corn over soybeans in 2023 was based on a favorable projection of the corn to soy benefit ratio. Planting data for 2024 will be ascertained following surveys of farmers during March concerning their planting intentions.

 

COMMODITY PRICES

 

The following quotations for the months of delivery as indicated were posted by the CME at 14H00, March 7th 2024, compared with values at close of trading on February 29th 2024 (in parentheses): -

COMMODITY

Corn (cents per bushel)

March 426 (414).

May 437 (428)

Soybeans (cents per bushel)

March 1,153 (1,129).

July 1,170 (1,153)

Soybean meal ($ per ton)

March 338 (333).

July 335 (333)

 

Changes in the price of corn, soybeans and soybean meal over five trading days this past week were:-

Corn: March quotation up 12 cents per bushel. (+2.8 percent)

Soybeans: March quotation up 24 cents per bushel (+2.1 percent)

Soybean Meal: March quotation up $5 per ton (+1.5 percent)

 

The CME spot prices for feedstuffs per short ton at close of trading on March 6th 2024 with prices for the previous week were:-

  • Corn (ZC): $154 per ton, unchanged from the previous week. 52-week range $149 to $233
  • Soybean Meal (ZM): $335 per ton, was $328. Up $7 per ton (+2.1 percent) from the previous week. 52-week range $323 to $495

 

Values for other common ingredients per short ton:-

  • Meat and Bone Meal, (According to the USDA National AnimalBy-product Feedstuffs Report on March 1st: $325 to $400 per ton (Av. $372 per ton) for porcine (ex MN), up 6.7 percent from last week ; $300 to $310 per ton (Av. $305 per ton) for ruminant (ex MN) Up 4.1 percent from last week. Price varies according to plant and location
  • According to the USDA National Mill-Feeds andMiscellaneous Feedstuffs Report on March 1st wheat middlings from St. Louis, MO. and other locations: $75 to $80 per ton (Av. $78 per ton) a 2.5 percent decline from the previous week
  • According to the National Grain and Oilseed Processor Feedstuffs Report on March 1st DDGS, (IA.) was priced at $170 to $215 (Av. $185 per ton down 5.6 percent from last week reflecting lower corn price. Pacific Northwest price at $285 per ton). Price varies according to plant and location and is expected to fluctuate with the price of corn
  • University of Missouri Extension Service By-Product Feed Price Listing for February
  • Bakery Meal, (MO & TX): $190 to $220 per ton.
  • Rice Bran, (AR & CA): $190 to $240 per ton. (Av. $210).

 

For each $1 per ton (2.8 cents/bushel) change in corn the cost of egg production would change by 0.11 cent per dozen

For each $10 per ton change in the price of soybean meal the cost of egg production would change by 0.35 cent per dozen

There was a 0.2 cent per dozen increase in the nest-run production cost for eggs this past week due to an increase in the spot price of soybean meal

 

ENERGY

The October 11th 2023 U.S. Energy Information Administration (U.S. EIA) report estimated that fuel ethanol blending would average 980,000 barrels per day in 2024, down 2.0 percent from 2023. For the week ending March 1st, 91.6 percent (93.5 percent for the previous week) of the U.S. ethanol fermentation volume was operational, based on January 2023 U.S. EIA capacity of 1,152 million barrels per day. The outlook for increased production will depend on higher domestic demand, from summer driving in addition to increasing the limited quantity exported attaining approximately 9 percent or the production equivalent to 2.8 days.

 

During December 2023 (the last month for which US Energy Information Administration data is available) ethanol exports were up 34.2 percent from November to 158.3 million gallons (3.713 million barrels). Importing nations and regions of significance and their proportions of total volume (rounded) for the month included:- 28.0 percent to Canada; 18.9 percent to Europe; 15.2 percent to Asia, predominantly South Korea and the UAE; 13.1 percent to India; 2.8 percent to Mexico and 7.2 percent to Central and South America and the Caribbean.

 

According to the U.S. EIA, for the week ending March 1st 2024 the industry produced on average 1,057,000 barrels of ethanol per day, down 1.9 percent from the week ending February 23rd 2024 but solidly above the one million gallon per day benchmark.

 

On March 1st 2024 ethanol stock was up 0.1 percent from the previous week to 26.1 million barrels, an approximately 24-day reserve. This past week demonstrated increased demand for ethanol, given relative changes in the weekly production level (output down 01.9 percent and inventory up 0.1 percent over the most recent week)

 

Current Energy Prices:-

  • The price of WTI was up $0.84 per barrel, (+1.1 percent) to $79.38 per barrel on March 6th compared to the previous week. WTI is up 8.1 percent year-to-date. Issues affecting price last week included a conflict premium for Middle East crude and disruption of shipping in the Red Sea resulting in an escalation in bulk and liquid sea-freight. An OPEC+ production cut that commenced in July 2023 in addition to a voluntary one-million barrel per day reduction by Saudi Arabia announced on June 4th was extended through June 2024 although it is questioned whether all members of OPEC will comply. Angola withdrew from the cartel on December 20th

 

The ending stock of crude held at Cushing OK. on March 1st was up 2.3 percent from last week to 31.7 million barrels and 26.1 percent down from the season high on June 23rd 2023. Hydrocarbon sources of energy contributed materially to inflation in the third quarter compared to the previous quarter of 2023 but was an important contributor to deflation in the fourth quarter of 2023. On March 1st 629 rigs were in operation down from 749 on March 3rd 2023. U.S. crude production averaged 13.3 million barrels per day in February. Consensus estimates for WTI price through the remainder of 2024 average $76.50.

 

  • Ethanol quoted on the CME (EH) on March 6th was priced at $2.16 per gallon, unchanged for months due to lack of trading activity. The 52-week range is $2.14 to $2.19 per gallon.
  • On March 6th RBOB gasoline traded on NASDAQ (RB) at $2.53 per gallon, unchanged from the previous week. Higher prices are becoming more evident in CME trading and ultimately at the pump. The 52-week range for RBOB gasoline is $1.93 to $2.55.
  • The AAA national average regular grade gasoline price was $3.39 per gallon on March 1st, up ten cents per gallon (3.0 percent) from last week. Gasoline is now $1.23 per gallon more expensive than ethanol but has a 63 percent higher BTU rating. Future rises in fuel cost are inevitable given the increases in benchmark WTI
  • The AAA national average diesel price was $4.06 per gallon on March 1st, down one cent (0.3 percent) from the previous week but with prospects for future increases due to an extremely low national stock and as rising WTI price.
  • CME Henry Hub natural gas was priced at $1.93 per MM BTU on March 1st up 6 cents (3.2 percent) from the previous week on lower demand due to milder weather. Gas prices are depressed following an Administration embargo on new LNG export terminals.

 

INGREDIENTS

 

DDGS is freely available with most plants among the 192 operational on January 1st 2023 (the last available estimate) with a combined capacity of 1,152 million barrels per day functioning at a now restored 93.1 percent compared to 93.5 percent last week. The March 1st USDA National Grain and Oilseed processor Feedstuffs Report priced DDGS from Iowa plants at $170 to $215 per ton, with an average of $185 per ton. Wide variation in price exists depending on supplier, quantity and location. It is axiomatic that the cost of DDGS will reflect changes in the price of corn with an appropriate lag period. Generally DDGS is currently incorporated at moderate inclusion levels in egg-production formulas based on price relative to the nutrient contribution of corn and other ingredients. This will change as corn and hence DDGS fluctuate in price

 

The CME soybean price for March 2024 delivery at 14H00 on March 7th was up 2.1 percent to 1,153 cents per bushel. The current price of soybeans is a reflection of availability for domestic crushing to produce oil, consumption and export orders. Soybean meal was up 1.5 percent on the CME to $338 per ton for March 2024 delivery. Prices of soybeans are obviously influenced by projections of harvest in the three major producing nations in South America, the projected 2024 harvest in the U.S. coupled with domestic demand for soy oil, biodiesel and meal.

 

According to a release on February 15th by the National Oilseed Processors Association, whose membership process 95 percent of the U.S. crop, the soybean crush for January attained 185.7 million bushels of soybeans. This was lower than the consensus of estimates averaging 189.9 million bushels. Crush volume was down 4.9 percent from the record December level of 195.3 million bushels. The low January crush was attributed to harsh weather resulting in disruption of transport and plant closures. February crush data will be posted in the March 22nd 2024 edition of EGG-NEWS.

 

On March 6th the CME spot price for soybean oil was down 0.5 cent per lb. (-1.1 percent) from the previous week to 44.8 cents per lb. Prices for vegetable oils have fluctuated over a narrow range in past weeks but have declined with recent lower demand. Asian crude palm oil was also lower this past week on profit taking. It is anticipated that 41 percent of U.S. soy oil was diverted from fuel to biodiesel during 2022 and this proportion will be exceeded in 2023 paralleling the situation in Brazil.

 

On March 6th CME soybean meal spot price was $335 per ton, $7 per ton higher than the spot price last week and compared to a 52-week range of $323 to $495 per ton.

 

On March 6th Meat and Bone meal (porcine) was quoted over a range of $325 to $400 per ton (Av. $372 per ton) according to the USDA National Animal By-product Feedstuffs Report, Prices quoted were for Minnesota plants but with a wide range based on composition, source and location. Price fluctuation reflects changes in soybean meal and other oilseed meals.

 

On March 6th conversion of the CNY to the BRL was BRL 0.70, up CNY 0.01 from last week. The conversion of the CNY to the US$ was CNY 7.20, unchanged from the previous week despite the fractional fall in the Dollar Index.

 

For consecutive calendar years 2017 through 2019 the U.S. supplied 34.4 percent of soybean requirements for China amounting to 95.5 million metric tons. This was followed by a decline to 16.9 percent of 88.5 million metric tons in 2018 and 16.6 percent of 88.0 million metric tons in 2019. The USDA anticipated that soybean imports by China would attain 95.0 million metric tons during the 2020-2021 market year but in reality only 60.3 million tons was shipped through August 2021.

 

For the 2021-2022 market year net export sales of corn were down 21.5 million metric tons (844 million bushels) compared to the previous market year with cumulative exports of 38.3 million metric tons (1,507 million bushels) 

 

For the 2022-2023 market year net export sales of soybeans were down 5.6 million metric tons (206 million bushels) compared to the previous market year with cumulative exports of 51.5 million metric tons (1,893 million bushels)

 

For Market year 2022-2023 ending September 2023, a record 13.2 million metric tons of soybean meal and cake was exported valued at $7 Billion. Expansion in exports was attributed to orders from The E.U., Asia (Viet Nam) and Latin America. Crush volume was driven by the demand for soy oil to produce biodiesel fuel.

 

During calendar 2022, 58.0 million metric tons (2,243 million bushels) of corn were exported from the U.S., valued at $18,609 million. The top five importers with their respective values expressed as a percentage were: China, 28.2; Mexico, 26.4; Japan, 16.0; Canada, 7.2 and Colombia, 5.3.

During calendar 2022, 57.2 million metric tons (2,099 million bushels) of soybeans were exported from the U.S., valued at $34,392 million. The top five importers with their respective values expressed as a percentage were: China, 72.6; Mexico, 14.8; E.U., 11.3; Egypt, 6.1 and Japan, 7.3.

 

COMMENT

 

Subscribers are referred to the December 8th 2023 WASDE #643 for the 2023 harvest. The preliminary USDA projection for 2024 harvests is included in the February 8th WASDE retrievable under the STATISTICS tab. The USDA Planted Acreage Report and the quarterly Grain Stocks Report posted under the STATISTICS Tab.

 

Following cancellation of the Black Sea Grain Initiative (BSGI) Ukraine commenced limited shipment of commodities from the three main Black Sea and Danube Delta ports that remain functional. Projected harvest during the 2022/2023 season will amount to 49.0 million metric tons, 42 percent lower than for 2021/2022. Exports were projected to attain 38.1 million metric tons, 26.5 percent lower than the previous market year.

 

Either more intense action by Ukraine, a negotiated peace treaty with concessions to the Russian Federation, or their combination will be required to restore unrestricted shipping in the Black Sea. Increasing passage along the costal-route (“Humanitarian Corridor”) has allowed sea-transport of commodities since early August to supply Asia and Africa. Year to date Ukraine has exported 29 metric tons of agricultural commodities with 1.5 million metric tons last week.

 

Increased multinational naval activity has commenced in the Bab al-Mandeb Strait at the southern end of the Red Sea to restore shipping through the Red Sea and the Suez Canal that carries 15 percent of world sea-freight. Some shipping lines including Maersk of Denmark, Hapag-Lloyd of Germany and CMA of France have suspended transit of the Suez Canal and the Red Sea awaiting a clear resolution of the danger from missiles. This will require destruction of Houthi bases, radar and command installations and mobile launching equipment on the soil of Yemen. This is in progress.


 

Egg Week

03/07/2024

USDA Weekly Egg Price and Inventory Report, March 6th 2024.

Market Overview

  • The average wholesale unit revenue values for Midwest Extra-large and Large sizes were down by 26.1 percent and Medium size was down on average by 14.0 percent this past week. Prices were approximately $1.35 per dozen above the 3-year average for early March. This past week shell egg inventory was down by 1.0 percent, following a rise of 4.9 percent the previous week. Supply is lower despite routine and progressive weekly increases in pullet flocks placed. Hen numbers are offset by the loss of close to thirteen million hens due to HPAI on twelve complexes holding from 250,000 to 2.6 million hens during the 4th Quarter of 2023. Flocks are gradually being replaced although pullets are in short supply with losses of 2.5 million in this level of stock. This past week, chains widened the spread between delivered cost and shelf price. This could result in a potential increase in generic stock unless compensated by a proportional rise in demand and constant re-ordering to fill the pipeline through mid -month. Discounters are holding prices on generics influencing mainstream retail stores. Eggs are still highly competitive in price against the comparable costs for other protein foods.
  • Total industry inventory was down by 0.5 percent overall this past week to 1.68 million cases with a concurrent 1.8 percent increase in breaking stock, following a 4.1 percent rise during the preceding processing week. Demand for egg products will presumably increase in the weeks preceding Easter (March 29th Good Friday) with more home baking and entertaining. Egg products are required for the food service and manufacturing sectors although exports are at a moderate to low level attributed to domestic price. USDA Benchmark prices were approximately $0.50 per dozen higher than the previously exceptional but rapidly falling prices during the corresponding week in 2023.
  • It is now apparent that the inventory held by chains and other significant distributors may be more important over the short term in establishing wholesale price compared to the USDA regional inventory figures. Changes in stock held by DCs and in the pipeline as determined by weekly orders are probably responsible for cyclic fluctuation in weekly industry stock, especially after a holiday weekend.
  • Cases of HPAI in the commercial poultry industry and backyard (non-commercial WOAH) flocks have tapered, coincident with the end of the Fall migration of waterfowl that was extended in late 2023 by mild weather. The number and extent of future possible outbreaks during the late winter of 2024 cannot be projected but the epornitic appears to be over with migratory birds moving southward following colder weather. Unfortunately sporadic cases among turkeys have been diagnosed in recent weeks in Missouri and North Carolina. More surveillance information should be released by USDA-APHIS concerning the prevalence rate of carriers among resident domestic free-living birds and a review of molecular and field epidemiology for the 2022 spring and fall waves of HPAI. The USDA has yet to identify specific modes of transmission for the 2022-2023 epornitic including likely airborne spread from wild birds and their excreta over short distances.
  • The current relationship between producers and chain buyers based on a single commercial price discovery system constitutes an impediment to a free market. The benchmark price appears to amplify both downward and upward swings as evidenced over the past two years. A CME quotation based on Midwest Large, reflecting demand relative to supply would be more equitable. If feed cost is determined by CME ingredient prices then generic shell eggs should be subject to a Midwest Large quotation.
  • According to the USDA the U.S. flock in production was up by 0.1 million hens (<0.1 percent) to a new level of 302.6 million for the week ending March 6th 2024. The stated total flock of 306.9 million included about two million molted hens that will resume lay during coming weeks plus 5.0 million pullets scheduled to attain production. Given the latest figures it is estimated that the producing flock is at least 17 to 20 million hens lower than before the onset of HPAI in 2022. It is evident that USDA has now provided a more realistic figure of flock size having adjusted figures to account for depopulation of 13 million hens spread over the last quarter of 2023. There were evident discrepancies between published figures and the theoretical number of hens taking into account known losses and predetermined pullet replacements.
  • The ex-farm price for breaking stock was enigmatically (and temporarily?) up 7.5 percent to $1.50 per dozen. Checks delivered to Midwest plants were down 2.1 percent to $1.38 per dozen over the past week. Prices for breaking stock should follow the wholesale price for shell eggs usually with a lag of about one to three weeks.

 

The Week in Review

 

Prices

According to the USDA Egg Market News Reports released on March 4th 2024, the Midwest wholesale price (rounded to one cent) for Extra-large was down 26.1 from last week to $2.27 per dozen. Large was down 26.2 percent to  $2.25 cents per dozen. Mediums were down 14.0 percent  to $1.78 per dozen delivered to DCs. Prices should be compared to the USDA benchmark average 4-Region blended nest-run cost of 76.8 cents per dozen as determined by the Egg Industry Center based on USDA data for January 2024. This value excludes provisions for packing, packaging materials and transport, amounting to 57 cents per dozen as determined in mid-2023 from an EIC survey (with low response) and now realistically 60 cents per dozen. The January release by the EIC is delayed for adjustment of values.

 

Currently producers of generic shell eggs should be operating with positive margins irrespective of region and customer-supply agreements. The progression of prices during 2023 and 2024 to date is depicted in the USDA chart reflecting three years of data, updated weekly.

 

The March 4th edition of the USDA Egg Market News Report confirmed that the USDA Combined Region value (rounded to the nearest cent), was down $0.15 per dozen to  $3.14 per dozen delivered to warehouses for the week ending February 29th 2024. This average price lags current benchmark Midwest weekly values by one week.  The USDA Combined range for Large in the Midwest was $3.05 per dozen. At the high end of the range, the price in the South Central region attained $3.21 per dozen. The USDA Combined Price last week was approximately $1.35 per dozen above the 3-year average of $1.80 per dozen. This past week Midwest Large was approximately $0.50 per dozen above the corresponding week in 2023 that was rising on demand to $2.65 per dozen as production recovered from HPAI depletion and with declining market demand.

 

Flock Size

 

Previously the loss of approximately 13 million hens due to HPAI during the fourth quarter was not reflected in weekly USDA figures. The USDA has now adjusted data to reflect losses due to HPAI depopulation in recent weekly reports.

 

Given the importance of weekly flock numbers to pricing accurate values of flock size devoid of obvious discrepancies are required by producers.

 

According to the USDA the number of producing hens reflecting March 6th 2024 (rounded to 0.1 million) was apparently up 0.1 million as an adjustment from last week to 302.6 million. The total U.S. flock includes about two million molted hens due to return to production Approximately 5.0 million new pullets on average reach maturity each week, based on USDA monthly chick-hatch data for 20-weeks previously. The increase is offset by routine flock depletion in addition to residual losses during the Fall phase of the 2022 HPAI epornitic and an additional loss of approximately 13 million hens during the last quarter of 2023. To date some flocks have been replaced. Based on inventory level and prices, the population of hens producing table eggs and breaking stock should now be producing at or above seasonal demand by consumers. Industrial and food service off-take although increasing, is approaching pre-COVID levels. Prices will continue to fluctuate but commenced a seasonal albeit late rise in price two weeks ago.

 

According to the USDA the total U.S. egg-flock on March 6th 2024 was stated to be down by 0.2 million hens to 306.9 million including second-cycle birds and those in molt. The weekly difference of 3.3 million hens between flocks in production and total hens is an approximate value and unusually narrow with the difference from last week denoting that molted hens are resuming production consistent with current demand. Given the season and the trajectory in benchmark wholesale prices, only a few older flocks were molted or depleted before mid-January 2024. At present it is estimated that there are 17 to 20 million fewer hens in the total flock now reflected in weekly USDA figures. The apparent difference is equivalent to about 5.8 percent of the pre-HPAI 2022 national flock of 326 million hens.

 

INVENTORY LEVELS

 

Cold storage stock of frozen products in selected centers on February 27th 2024 was up 0.2 percent to 2.394 million pounds (1,088 metric tons), and up 0.4 percent from  2.404 million lbs. on February 1st 2024. The monthly USDA Cold Storage Report below quantified an increase in the actual total stock level at the end of December.

 

The most recent monthly USDA Cold Storage Report released on February 26th 2024 documented a total stock of 29.4 million pounds (13,347 metric tons) of frozen egg products on January 31st 2024. This quantity was up 1.9 percent from the January 31st 2023 value of 28.8 million pounds. January31st 2024 frozen egg inventory was up 1.7 percent from the previous month ending December 31st 2023 attributed to presumably slightly lower domestic or export demand or their combination. Compared to January 31st 31st 2023 inventory of whites was down 7.5 percent to 2,728 million lbs. on January 31st 2024. Compared to January 31st 2023 yolk inventory was up 4.6 percent to 912 million lbs. on January 31st 2024.

 

A total of 87.7 percent (25.7 million lbs.) of combined inventory comprised the categories of “Whole and Mixed” (38.9 percent) and “Unclassified” (48.8 percent). The lack of specificity in classification requires a more diligent approach to enumerating and reporting inventory by the USDA.

 

Shell Inventory

 

The USDA reported that the national stock of generic shell eggs effective March 4th 2024 was down 0.5 percent over the previous week. Inventory over the past week followed a rise of 4.7 percent the previous week reflecting low seasonal consumer demand and orders placed by buyers of the major chains. Combined with breaking stock, the total inventory of shell eggs in industry cold rooms is now at a rounded level of 1.68 million cases (1.69 million last week; 8,600 cases higher this week). The U.S. population of laying hens at this time is influenced by:-

 

  • A small number of older birds previously culled during the fall phase of the 2022 HPAI epornitic now approaching the end of their first cycle.
  • Outbreaks of HPAI with the loss of over 13.0 million hens during the fourth quarter of 2023.
  • The population unaffected by HPAI.
  • Flocks retained after molting with an anticipated decrease in this category as influenced by prevailing wholesale egg prices, and indirectly responding to fourth Quarter 2013 flock depopulation from HPAI.
  • Started pullets from chick placements during September 2023. Going forward, younger hens will assume a larger proportion of the national flock as more flocks are placed compensating for the flocks depleted due to HPAI.

 

Four USDA Regions reported lower stock levels this past week. The regions are listed in descending order of stock: -

 

  • The Midwest Region was down 1.8 percent from the previous week to 458,300 cases.
  • The Southeast Region was down 8.7 percent to 275,400 cases
  • The South Central Region was up 9.2 percent to 252,300 cases
  • The Northeast Region was up 8.4 percent to 172,000 cases
  • The Southwest Region was down 0.8 percent to 123,500 cases.
  • The Northwest Region was down 12.4 percent to 77,200 cases

 

The total USDA six-area stock of commodity eggs comprised 1,681,000 cases (1,689,600 cases last week), down 0.5 percent, of which 80.8 percent were shell eggs (81.2 percent last week). The inventory of breaking stock was up 1.8 percent to 322,500 cases. Shell-egg inventory was down 1.0 percent attaining 1,358,800 cases. These changes are a function of regional shell-egg demand coupled with a response to erratic re-stocking as buyers manipulate the industry benchmark price discovery system. A reduction in the incidence rate of HPAI may influence buyers who are now less concerned over short-term availability.

 

A rise in breaking stock was recorded over the past week despite some diversion to the shell egg market. Subsequent weekly stock levels of shell eggs will indicate the extent of industrial and consumer demand. Breaking is stimulated by conversion to egg powder and liquids for export and by higher demand for liquids by industry and food service. The average price for Midwest checks and breaking stock combined was 63.7 percent of the average value of Midwest Extra-large and Large shell eggs (48.4 percent for previous week) consistent with a 26.1 percent lower prices for shell eggs this past week compared to breaking stock and checks that were down on average by 5.4 percent. The wider differential of 63.7 percent can be compared to 80.0 percent in April 2022 reflecting the initial period of high demand for both shell eggs and products. This demonstrates the respective demands for shell eggs and egg products and the interconnectivity of the packing and breaking segments of the egg industry under circumstances of extreme disturbances in either supply (lower due to HPAI in 2022) or demand (higher during early COVID in 2020). The price for breaking stock and for checks is influenced by the relative demand for generic shell eggs and contract obligations with breakers.

 

On March 4th 2023 the inventory of other than generic eggs amounting to 434,900 cases (down 0.6 percent from last week at 437,600 cases) among three categories (with the previous week in parentheses) comprised: -

 

  • Specialty category, up 1.7 percent to 35,800 cases on promotion. (was up 10.4% to 35,200 cases)
  • Certified Organic, down 2.6 percent to 82,600 cases. (was down 2.6% to 84,800 cases)
  • Cage-Free category, down 0.3 percent to 316,500 cases. (was up 2.4% to 317,600 cases)

 

Demand for cage-free product will not increase materially over the intermediate term while generic eggs from caged flocks and some surplus down-classified cage-free eggs are on the shelf at $2.20 to $2.40 per dozen during normal supply and demand conditions. Currently there is a small differential in shelf price between conventional caged eggs compared to cage-free white but a wider difference between higher priced omega-3 enriched, cage-free, free-range and pasture-housed products. That the higher priced egg categories will experience an erosion in demand as generic prices fall is supported by the findings of a comprehensive review relating to the transition from cages to alternative systems.*

 

Existing and proposed individual state legislation mandating sale of only cage-free eggs will support most of the completed and anticipated transition from cages but significant additional re-housing will not be completed by the beginning of 2025, less than 10 months away and ultimately never, as projected by most industry observers. The constitutional status of Proposition #12 was confirmed by SCOTUS in a May 11th 2023 decision with specific reference to the dormant Commerce Clause relating to interstate trade. It is unlikely that a legislative initiative (the EATS Act) will be incorporated into the 2023 Farm Bill (that will be delayed beyond February 2024), to limit the impact of Proposition #12 on sows housed for pork production. Many retail chains are ‘renEGGing’ on or extending their time commitments to achieve an acceptable transition to cage-free eggs despite coercion by animal welfare groups. The State of Utah is extending the deadline by five years. With the current proportion of non-caged flocks and lower prices for generic cage-derived eggs, cage-free eggs are surplus to demand in some areas. Organic eggs are subject to price pressure in many markets especially those served by club stores. Inventory of this category is holding solidly below 100,000 cases with this quantity representing the approximate production of three days of lay. Long-term demand for cage-free eggs will be influenced by the relative shelf prices of the category in comparison with generic white-shelled eggs from caged flocks. Inventory of this category is now above the 300,000-case benchmark, but effectively is working stock given weekly production of 1.7 million cases per week.  At the other end of the price range, consumers will purchase less-expensive brown cage-free product over organic eggs when there is a differential in price greater than about $1.20 per dozen under normal conditions of supply and demand. Similarly, consumers will traditionally purchase white-shelled generic eggs in preference to white or brown-shelled cage-free with a differential of over $1.20 per dozen.

 *Caputo,V. et al The Transition to Cage-Free Eggs. February 2023

 

A comprehensive structured market research project on cage-free eggs has provided an indication of consumer willingness to pay for this attribute. The industry requires a study on other aspects including shell color, GM status and nutritional enrichment using conjoint analysis. Above all, agricultural economists should evaluate the impact of disruption in supply and demand arising from large-scale depopulation following the 2015 and 2022-2023 HPAI epornitics and the current wave of outbreaks extending through partial restoration of hen numbers but with a disproportionate decline in wholesale price during the first quarter of 2023.

 

RELATIVE PRICES OF SHELL-EGG CATEGORIES

 

USDA-AMS posted the following national shell egg prices as available, for March 1st 2024 for the preceding week in the Egg Markets Overview report for dozen cartons with comparable prices in parentheses for the previous week: -

 

Retail Prices

Large, in cartons generic white:         $1.65      Down 35.0 percent   ($2.57)

Large, in cartons cage-free brown:    $3.07      Down 4.7 percent      ($2.22)   

Wholesale

Midwest in cartons                             $3.06      Down 1.2 percent      ($3.21)                         

Large C-F, California in Cartons:       $3.61      Down 17.8 percent    ($4.39)

National loose, (FOB dock):              $1.53     Down 14.5 percent   ($1.79)

NYC in cartons to retailer:                 $2.32      Down 24.9 percent    ($3.09)

Regional in cartons to warehouse reported March 1st for previous week.    

             Midwest                                $3.05      Down 4.7 percent        ($3.20)

             Northeast                              $3.10     Down 4.6 percent         ($3.25)

             Southeast                              $3.19     Down 4.5 percent         ($3.34)

             South Central                        $3.21      Down 4,5 percent         ($3.36)

             Combined                             $3.14      Down 4.6 percent        ($3.29)

 

WEEKLY ADVERTISED PRICES OF SHELL-EGG CATEGORIES W/E MARCH 7th.

 

USDA Certified Organic, Brown, Large:                        $4.59        ($4.89)  

            Cage-Free Brown, Large:                                  $3.31        ($3.40)

Omega-3 Enriched Specialty, White, Large:       $2.99        ($2.56)

Generic White, Large Grade AA                         $1.75        ($1.67)

Generic White, Large Grade A  featured             $1.65        ($1.67)

 

The advertised price for Large white grade AA as featured for the week ending March 7th was $1.75 per dozen, (835 stores) up $0.08 or 4.8 percent above $1.75 per dozen last week. Current supply was probably above retail demand the previous week given the rise in inventory held by the industry as reported by the USDA. Independent producers continue to divert shell eggs from breaking to the retail market. Large integrated companies and packers continued to deliver to DCs and this week chains increased orders to stock shelves for Christmas demand.

 

The USDA benchmark-advertised retail price for certified organic for the week was $4.59 per dozen, (518 stores), down $0.30 per dozen or 6.1 percent from the USDA price of  $4.89 per dozen posted last week. A USDA advertised price of $3.31 per dozen was posted for cage-free brown during the past week (917 stores), down $0.09 per dozen or 3.4 percent down from last week at $3.40 per dozen. The price differential between USDA organic and cage-free brown of $1.28 per dozen will favor cage-free brown at the expense of certified organic eggs. Week-to-week single digit fluctuations expressed as a percentage can be expected in the stock of specialty and organic eggs based on the small base of these categories. There was a small downward movement in the inventory of certified organic this past week consistent with increased demand for this category based on price and promotion.

 

USDA cage-free brown was priced retail at $3.31 per dozen, lower by $0.36 per dozen (9.8 percent) compared to the cage-free white price of $3.67 per dozen (831 stores)

 

Certified organic was promoted this past week at 8.2 percent of the total, consistent with a lower inventory, (last week 33.1 percent of features). Omega-3 enriched comprised 22.3 percent of features with slightly higher inventory (18.5 percent last week). Cage-free was at 27.9 percent with fractionally lower stock (45.5 percent last week). This past week Large represented 41.6 percent of features up from 1.9 percent last week. This confirms that retailers promote any category if available in excess of demand.

 

USDA Cage-Free Data

 

According to the latest monthly USDA Cage-free Hen Report released on March 1st 2024, the number of certified organic hens in Fee was down 0.5 percent from January 2024 at 18.3 million, (rounded to 0.1 million).

 

The USDA reported that the cage-free (non-organic) flock in February 2024 was up 2.1 percent from January 2024 to 106.5 million, (rounded to 0.1 million).

 

According to the USDA the population of hens producing cage-free and certified organic eggs in February 2024 comprised: -

 

Total U.S. flock held for USDA Certified Organic production =   18.3 million   (18.7 million in Q4 2023).

Total U.S. flock held for cage-free production                          = 106.5 million (106.4 million in Q4 2023).

Total U.S. non-caged flock                                                        =124.8 million  (125.1 million in Q4 2023).

 

This total value represents 38.3 percent (January, 37.5 percent) of a nominal 326 million total U.S. flock pre-HPAI in 2022 (but 40.7 percent of the national flock after HPAI mortality to a presumed January complement of 307 million in production). Hens certified under the USDA Organic program have decreased in proportion to cage-free flocks since Q1 of 2021.  

 

The accuracy of individual monthly values is questioned given a history of either constant numbers or a sharp change in successive months as documented over the past two years. It is currently not possible to reconcile the USDA values for the number of cage free hens with known HPAI depopulation and projected replacement and assumed routine depletion. USDA adjusted the total and producing flocks this past week to account for depopulation due to HPAI. It is anticipated that the April release will reflect a realistic number of producing hens housed cage-free during the first Quarter of 2024. Precise quarterly reports would be more suitable for the industry in planning expansion and allocation of capital than inaccurate monthly values.

 

Processed Eggs

 

For the processing week ending March 2nd 2024 the quantity of eggs processed under FSIS inspection during the week as reported on March 6th 2024 was down 0.2 percent compared to the previous processing week to a level of 1,376,148 cases, (1,378,384 cases last week). The proportion of eggs broken by in-line complexes was 55.7 percent with less diversion to higher-priced shell markets by uncommitted producers, (52.8 percent in-line for the previous week). During the corresponding processing week in 2022 in-line breakers processed 51.1 percent of eggs broken.

 

The differential in price for shell sales and breaking will determine the movement of uncommitted eggs. This past week 71.6 percent of egg production was directed to the shell market, (71.5 percent for the previous week), responding to the differential in prices paid by breakers and packers. Breaking stock inventory was up 1.8 percent this past week to 322,500 cases. Apparent demand from QSRs and casual dining is at stable to slightly lower levels. There is ongoing demand from baking and eat-at-home despite the weekly fluctuation in the inventory of breaking stock.

 

For the most recent monthly report reflecting January 2024, yield from 7,053,212 cases  (5,697,623 cases in December) denoted a decrease in demand for liquid and diversion to shell egg sales over the period December 31st 2023 through February 3rd 2024.  Edible yield was 38.4 percent, distributed in the following proportions expressed as percentages: - liquid whole, 60.7; white, 24.0; yolk, 12.2; dried, 3.1.

 

All eggs broken during 2023 attained 69.78 million cases, 8.4 percent less than 2022. Eggs broken in 2024 to date amounted to 12.52 million cases, 2.7 percent less than the corresponding period in 2023. This is attributed to moderately increased demand for egg liquids from retail, food service and QSRs and casual dining restaurants. Consumers are constrained by economic uncertainty following the ending of COVID support, moderate inflation, high credit card interest rates and a tendency to purchase only essentials.

 

PRODUCTION AND PRICES

 

Breaking Stock

 

The average rounded price for breaking stock was enigmatically up 7.5 percent this past week to $1.50 per dozen with an extreme range of $1.49 to $1.51 per dozen delivered to Central States plants on March 4th 2024. Checks were down 2.1 percent this past week at an average of $1.38 per dozen over the most frequent range of $1.37 to $1.39 per dozen suggesting that the market for breaking stock follows prices for shell eggs following pronounced up or down swings.

 

Shell Eggs

 

The USDA Egg Market News Report dated March 4th 2024 confirmed that Midwest wholesale prices for Extra-large, Large and Medium sizes were down 26.2 percent over the previous week. A higher inventory combined with a lower price, suggests that the market is probably operating with decreased demand. The following table lists the “most frequent” ranges of values as delivered to warehouses*:-

 

       Size/Type

       Current Week

    Previous Week

Extra Large

  225-228 cents per dozen

       395-308  down 26.1%

Large

  223-226 cents per dozen

       303-306  down 26.2%

Medium

  173-182 cents per dozen

       200-213  down 14.0%

Processing:-

 

     

Breaking stock

  149-151  cents per dozen

       120-159     up    7.5%

Checks

  137-139  cents per dozen

       140-142  down   2.1% 

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

 

The March 4th 2024 Midwest Regional (IA, WI, MN.) average FOB producer price, for nest-run, grade-quality white shelled Large size eggs, with prices in rounded cents per dozen was down 27.8 percent from last week, (with the previous week in parentheses): -

 

         EL. $2.03 ($2.71), (estimated by proportion):  L. $2.00 ($2.77): M. $1.57 ($1.77)

 

The March 4th 2024 California price per dozen for cage-free, certified Proposition #12 compliant Large size in cartons delivered to a DC, (with the previous week in parentheses) was down 13.8 percent from last week, despite depopulation of a third of the laying hens in the state but offset by introduction from Midwest and Southwest supplying states.

 

         EL. $3.18 ($3.68); L. $3.11 ($3.61); M. $2.97 ($3.22)                                                        

 

Shell-Egg Demand Indicator  

 

The USDA-AMS Shell Egg Demand Indicator reported on March 6th 2024 was down 0.7 points from the last weekly report to -0.9 with a 0.5 percent decrease in total inventory and a 1.0 percent lower shell inventory from the past week as determined by the USDA-ERS as follows: -

 

Productive flock

       302,564,148 million hens (down 0.1%)

Average hen week production

82.4%  (was 82.4%)

Average egg production

       249,164,565 per day

Proportion to shell egg market

                   71.6% (was 71.5%)

Total for in-shell consumption

         495,531 cases per day (up 4.3%)

USDA Table-egg inventory

            1,372,700 cases (down 0.1%)

26-week rolling average inventory

                  4.38 days

Actual inventory on hand

                  4.49 days

Shell Egg Demand Indicator

 -0.9 points (was  -0.2 on February 28th 2024)

 

The USDA Monthly Report covering January 2024 production including text, tables, data and prices and the 2nd Quarter results for Cal-Maine Foods can be accessed under the STATISTICS tab.

 

Dried Egg Products

 

The USDA extreme range in prices for dried albumen and yolk products in $ per lb. was released on March 1st 2024. Data for the past week was not released by the USDA. Available values are depicted for the previous week and in parentheses for the week before that. Values for past months illustrate the trend in prices influenced by HPAI depopulation and subsequent repopulation:-

 

 

 Whole Egg

 

 

      Not released

    ($5.00 to $6.70)

     

 

Average  Sept.       $  6.51

                Oct.        $  5.75

                Nov.       $  5.75

                Dec.        $  5.63

                Jan.         $  5.40

                Feb.        $  5.80

Yolk

     Not released

   ($4.00 to $5.70)

 

Average   Sept.      $   5.03

                Oct.        $   4.75

                Nov.       $   4.63

                Dec.        $  4.55

                Jan.         $   4.49

                Feb.        $   4.85

Spray-dried white

  No quotation, past week

Average   Dec ‘22. $14.18

                 Jan.        $14.18

    March to Feb. ’24 No release

Blends

 

No quotation, past week

 

 

 

Frozen Egg Products

 

The USDA posted the range in prices for frozen egg products for the past week. Prices in cents per lb. based on the extreme range on March 1st 2024 compared to the previous week showed fluctuation in price:-

 

 

Whole Egg

  $1.24 - $1.39

$1.39 - $1.42

White1

  $1.09 - $1.278

$1.21 - $1.291

Average for Yolks

  $1.98 - $2.031

$1.98 - $2.03

 

 

 

 

 

 

 

1. extreme range

 

Whole egg: Down 6.4%: Whites: Down 5.6%:; Yolks: Unchanged

 

This indicated a relative increase in demand for whole egg from the manufacturing and food service sectors and for export:

 

February averages (January): Whole. $1.33, ($1.11); Whites, $1.26, ($1.08);                           Yolks, $1.91, ($1.87).

 

 

Liquid Egg Products

Values for Whites and Yolks covering non-certified truckload quantities have not been released for many weeks. Whole egg values attained on average 104 cents per lb. last week. February averages (cents per lb.)  are compared with January values (in parentheses): -

Whole, $1.10, ($1.01); Whites, $1.06 ($0.76); Yolks, $1.74, ($1.72).

 

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

 

COMMENTS

 

During the 4th quarter of 2023 and extending into January 2024, outbreaks of HPAI required depopulation of close to 13 million egg-producing hens. In contrast to 2022, broiler flocks were affected with cases in California and Arkansas during fall of 2023 and more recently in Nebraska. Incident outbreaks of HPAI appear to have abated among turkey growing flocks (except NC and MO) in six affected states. There are still incident cases recorded in wild birds and backyard flocks in addition to free-living predatory birds and presumably in scavenging carnivorous mammals. Given the risks and consequences of infection it will be necessary to continue to maintain high levels of structural and operational biosecurity with intensification persisting through the remainder of February. HPAI is now diagnosed seasonally in breeding colonies of marine birds in costal areas of Europe and sporadically in commercial flocks. This resulted in trans-Atlantic dissemination following the pattern during the 4th quarter of 2021 extending into 2022. Outbreaks in commercial flocks appear to be correlated with shedding of AI virus by migratory birds that have now moved southward with sharply colder weather. The downward trajectory in incident cases suggests a decline in future outbreaks consistent with the pattern at the end of 2022.

 

Approximate losses in commercial flocks confirmed with HPAI and updates during the 2022/4 phases of the ongoing epornitic included:-

 

  • 6,900,000 broilers on 28 farms in 8 states during 2002 - 2023
  •  330,000  broiler breeders on 11 farms in 6 states.
  •  360,000 upland game birds October through December 2023.
  •  14,100,000  turkeys including breeder flocks in 8 states during 2022 and through 2023 year-to-date. During the past nine weeks losses have approximated 2.9 million growing turkeys with 63 incident cases confirmed in seven states (SD; ND; UT; MN; IA; WI, MI.).
  • 52,300,000  egg-production hens in total with 95 percent on 37 large complexes above 0.5 million in addition to 3,500,000 pullets with a total of 54 locations in 12 states. Pullet mortality does not include “at risk” replacements depleted on affected complexes with contiguous pullet rearing. Since October 2023 more than 13.0 million hens have been depopulated in 13 outbreaks.

 

Diagnoses reported by USDA during the past week ending February 27th comprised seven WOAH non-poultry flocks (IN.; NY.; MD.; OH.; MN and MO.). No commercial flocks were affected.

 

Depopulation of hens (rounded to 0.1 million) as a result of HPAI in the states most affected during the fourth Quarter of 2023 comprised:  OH., (4.5 m.); CA., (3.2 m); IA., (2.7 m); KS., (1.5 m) and MN. (1.0m).

 

Backyard flocks (non-WOAH) allowed outside access will continue to be at risk of infection in the U.S. These small clusters of birds in both suburban and rural areas are of minimal significance to the epidemiology of avian influenza as it affects the commercial industry. Backyard flocks serve as indicators of the presence of virus among free-living birds as evidenced by ongoing outbreaks in commercial poultry flocks across the U.S. The late 2023-early 2024 epornitic evidently has a long tail. Recent outbreaks in backyard flocks especially in northern tier states suggest shedding by resident, non-migratory free-living birds that may have become reservoirs. This has implications for seasonality

 

 The USDA-APHIS published a report on the results of epidemiologic studies* on farms in early 2022 and made available on July 25th.  Results for 18 egg-production case farms and 22 control farms suggested higher risk of infection associated with the presence of a farm in a control zone, proximity of wild birds, mowing or bush hogging of vegetation adjacent to the farm, and off-site disposal of routine mortality. These factors suggest possible aerogenous introduction of virus shed by wild birds onto farms over short distances. This presumption is based on anacdotal observations and recent research from Taiwan demonstrating avian influenza virus in air in proximity to migratory birds. The USDA study predictably suggested that protection was enhanced by effective structural and operational biosecurity. The validity of findings was limited by the confounding inherent to the diversity in size of flocks incorporated into the case-control study and deriving data from a 26 page questionnaire by telephone survey, months after outbreaks, introducing recollection bias and responder fatigue.

 

*Green, A. et al Investigation of risk factors for introduction of highly pathogenic avian influenza H5N1 virus onto table egg farms in the United States, 2022: a case-control study. Frontiers in Veterinary Science. Doi:  10.3389/vets.2023.1229008

 

It is hoped that APHIS recognises the need to provide the industry with science-based recommendations to prevent additional incident HPAI outbreaks. This presumes prompt analysis and reporting of whatever field and molecular epidemiology is collected. The Agency is also presumed to have planned epidemiologic field studies and allocated personnel and other resources in anticipation of a spring 2024 resurgence in HPAI. Given that large complexes in six states were infected during November and December, appropriate guidance from USDA-APHIS is anticipated by the Industry in advance of any spring or fall 2024 reoccurence.


 

USDA Data On Cage-Free Production For February 2024

03/01/2024

EGG-NEWS summarizes and comments on data and trends in the monthly USDA Cage-Free Report. This data is correlated and interpreted in the WeeklyEggPrice and Inventory Report posted on EGG-NEWS mailed on Fridays each week.

 

The USDA Cage-Free Report covering February 2024, released on March 1st 2024, documented the complement of hens producing under the Certified Organic Program to be 18.3 million (rounded to 0.1 million), down 0.3 percent from January 2024. The number of hens classified as cage-free (but excluding Certified Organic) and comprising aviary, barn and other systems of housing apparently increased by 2.1 percent from January 2024 to 106.5 million. Hen numbers posted by the USDA over the 4th quarter of 2023 and since are questioned based on the stated average hen-week production. The number of eggs collected is accepted as accurate but since the value for average weekly production is unacceptably high the denominator reflecting number of hens is probably incorrect. Alternatively if conventional eggs from cages are deceptively marketed as cage-free, assuming an accurate number of hens over a given month, the apparent hen-week value would be incorrectly high. Since the inception of the Cage-Free Report monthly figures have shown erratic fluctuation or alternatively are unchanged in consecutive months. Actual production of eggs is based on the reality of a continuing cycle of placing a predicted number of pullets and depletion of old hens but with limited application of molting for cage-free flocks. The respective numbers of hens claimed for organic and cage-free flocks should reflect chick placements, HPAI depopulation and age-related depletion and should correspond to monthly supply data and inventory extending over successive quarters.

 

Average weekly production for Certified Organic eggs in February 2024 was down 0.8 percent compared to January 2024 with a questionable average weekly production of 84.2 percent. Average weekly flock production for cage-free flocks other than Certified Organic was up 2.1 percent in February 2024, also with a questionably high average hen month production of 83.0 percent. Seasonally, younger flocks increase the availability of cage-free and organic eggs in response to pullet chick placements laid down 22 weeks previously in anticipation of peak seasonal demand periods. February 2024 data may have reflected a presumed higher proportion of younger flocks derived from pullet chicks placed during late July and early August 2023. Since the proportion of pullets according to housing type is not indicated in the monthly USDA Chickens and Eggs report it is not possible to assess the relative sizes of flocks producing under the certified organic label or for other categories. There is no adequate explanation for the high production rate especially if the stated number of hens is higher than actual, especially with undercounted HPAI flock depopulation that appears to be the case at present. This raises the question of illegal diversion of caged eggs into the cage-free or organic streams.

 

Flock Size Average

(million hens)

 February

2024

January

2024

Average

Q4- 2023

Average

Q3 –

2023

Average

Q2 –

2023

Average

Q1 –

2023

Certified Organic

18.3

18.4

18.7

 18.7

18.2

17.3

Cage-Free Hens

106.5

103.9

106.4

105.4

 103.2

98.1

Total Non-Caged

124.8

122.3

125.1

124.1

 121.4

 115.4

 

Average Weekly Production (cases)

January

2024

February

2024

Certified Organic @ 84.2% hen/day

302,585

300,309 -0.8%

Cage-Free @ 83.0% hen/day

1,685,314

1,719,872 +2.1%

Total Non-Caged @ 83.2% hen/day

1,987,899

2,020,181 -0.7%

 

Average Nest Run Contract Price Cage-Free Brown

$1.68/doz. (Unchanged since September 2023)

February 2024 Range:

$1.35 to $2.35/doz. (unchanged since March 2023)

FOB Negotiated December price, grade-ready quality, loose nest-run. Price range $2.12 to $3.56 per dozen

Average February 2024 Value of $2.66/doz.

($2.14/doz. January 2024)

 

Average February Advertised National Retail Price C-F, Large Brown

$3.37/doz. February 2024 (5 regions)

(was $3.36 in January 2024)

USDA Based on 5 Regions, 2,582 stores

 High: $3.98/doz. (MW. 201 stores)

 Low: $3.21/doz. (NE. 785 stores)

 

Negotiated nest-run grade-ready cage-free price for February 2024 averaged $2.66 per dozen, up by 24.3 percent from $2.14 per dozen in January 2024, reflecting higher demand relative to supply and an improvement over seasonal wholesale prices. The February 2024 advertised U.S. retail price for cage-free eggs over five regions (excluding NW. AK. and HI.) was $3.37 per dozen down one cent per dozen from January 2024 over 2,582 stores.

 

The apparent difference between a recorded average wholesale price of $2.66 per dozen plus a provision of 60 cents per dozen for packaging, packing and transport in relation to the average five-region retail price of $3.37 corresponds to an average retail margin of 3.4 percent (22.6 percent last month) over wholesale price for packed eggs delivered to a DC. Margins are presumed higher for pastured and other specialty eggs at shelf prices reaching $9.00 per dozen. Chains that are maximizing margins especially on Certified Organic, free-range and pastured categories restrict volume of sales, ultimately disadvantageous to producers.

 

Based on the importance of cage-free production, the USDA-AMS issue the Cage-Free report on volumes and prices at monthly intervals for the information of Industry stakeholders. There is obvious doubt as to the accuracy of individual monthly flock numbers especially when reports show a marked change at the end of a quarter or from the previous month without obvious cause, or alternatively when there is no change in the cage-free flock for sequential months.

According to APHIS data approximately 13 million hens were depopulated during the 4th quarter of 2023 as a result of HPAI. The UEP reported that 47 percent of depopulations have involved cage-free flocks. The approximately 6 million cage-free hens apparently depopulated are not adequately reflected in the recent monthly cage-free reports. The USDA should provide an explanation and appropriate corrections.

 

It is suggested that USDA should consider a quarterly report with more accurate hen data. This would be more useful to the industry for planning and marketing decisions. Price data is available each week from other USDA reports.

 

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


 

Egg Projection

02/17/2024

Updated February 2024 USDA Projection for U.S. Egg Production and Consumption. 

 

On February 14th 2024 the USDA Economic Research Service issued updated values for egg production during 2022 with a projection for 2023 and a forecast for 2024. Production, consumption and prices were only slightly revised from the previous January 19th 2024 report.

 

Projected egg production for 2023 was reduced by three million dozen from the January 2024 Report to 7,887 million dozen This will be 1.4 percent higher than in 2022 due to progressive replacement of the 44 million hens depleted due to HPAI over the period extending from early spring through mid-December 2022. The per capita consumption of shell eggs and liquids combined for 2023 will be 0.1 percent lower than in the December report to 280.9 eggs but up one egg (0.4 percent) from 2022. The projected average 2023 benchmark New York bulk unit price was unchanged from the January report at 192 cents per dozen. This was 31.9 percent lower than in 2022 attributed to a comparison with unseasonal high prices from the end of March through the 2nd Quarter of 2023.

 

Subsequent USDA projections will provide greater clarity on the recovery in consumption in an economy that is impacted by declining inflation. The 2023 Midwest in-carton wholesale price peaked at $5.17 per dozen on January 3rd 2023 but fell precipitously to a market bottom of $0.78 per dozen on May 8th attaining $2.92 on February 15th This was above the USDA/EIC projection of the combined nest-run December 2023 cost of 76.8 cents per dozen plus processing, packaging and transport of 60 cents per dozen amounting to $1.37 cents per dozen delivered to a distribution center.

 

Restoration in flock size after HPAI flock depletions in 2022 progressed at a rate of approximately 0.5 million per week but was limited by the availability of pullet chicks for replacement and in some companies the rate of conversion to alternative housing systems. Restoration of the national flock was compromised by a resurgence of HPAI with 13.0 million layers depleted during the 4th quarter of 2023 representing 4.0 percent of the nominal producing flock of 325 million hens, mainly on complexes averaging over one million hens. The cost of ingredients will influence margins and may result in cessation of production by some small-scale producers that run out of working capital since financial losses were incurred through summer up to mid-fall. Unpredictable factors affecting price will include the extent of losses during the spring of 2024 due to a predicted reemergence of avian influenza; the supply and cost of ingredients as influenced by world and national availability; exports of eggs and products and the intensity and persistence of domestic consumer demand.

 

The forecast for 2024 includes a production of 8,000 million dozen, up 1.4 percent from 2023. Consumption will attain 283.7 per capita, up a realistic 2.8 eggs or 1.0 percent above the projection for 2023. This will naturally depress prices with the NY-Large price dropping by 9.9 cents per dozen or 5.1 percent from the average for 2023.

 

In 2023 egg exports as shell and products combined attained 5,161 million dozen shell-equivalents, or 2.2 percent of production. During 2022 egg imports as a result of HPAI depopulation, some in shell form but predominantly products, attained 25.9 million dozen shell-equivalents, up 42.8 percent from 14.9 million dozen and 26.4 percent from 2021.

 

During 2023 shell egg exports attained 89.4 million dozen, up 28.6 percent compared to 2022 when high domestic prices prevailed. Egg products were up 18.2 percent to 20,814 metric tons compared to 2022.

 

February 2024 USDA data is shown in the table below:-

Parameter

2020

(actual)

2021

(actual)

2022

(actual)

HPAI

2023

(projection)

2024

(forecast)

% Difference

2022-2023

             

Production (m. dozen)

8,070

8,031

7,781

7,887

8,000

+1.0

Consumption (eggs per capita)

279.0

282.5

279.0

280.9

283.7

+0.7

New York price c/doz.)

112

119

282

192

183

-31.9

Source: Livestock, Dairy and Poultry Outlook released February 14th 2024

 

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


 

Egg Month

02/17/2024

REVIEW OF JANUARY 2024 EGG PRODUCTION COSTS AND STATISTICS.

 

The EIC has justifiably separated the production costs and unit revenue values for eggs derived from caged and cage-free flocks for the current year. Accordingly EGG-NEWS will summarize data accordingly but will consolidate production and export statistics for the U.S. egg industry comprising the two shell-egg categories and the breaking-products sector

 

JANUARY HIGHLIGHTS

  • January 2023 USDA ex-farm blended USDA nest-run conventional benchmark price was 172.0 cents per dozen, up 0.9 percent from the December 2023 value of 170.4 cents per dozen. For comparison, average monthly USDA benchmark price over 2023 was 146.0 cents per dozen with a range of 323 cents per dozen in January down to a low of 57 cents in May. Stock levels and prices prior to the onset of flock depletions due to HPAI indicated a relative seasonal balance between supply and demand. Future nest-run and wholesale prices will be largely dependent on consumer demand for eggs and liquid and the rate of replacement of pullets and hens depleted due to HPAI. Other considerations include diversion to shell sales from the egg-breaking sector in an interconnected industry.
  • Fluctuation in wholesale price is attributed in part to the amplification of upward and downward swings associated with the commercial benchmark price discovery system in use. Restoration of seasonal prices commenced midway through the fourth quarter of 2023 with a plateau after Christmas followed by a seasonal decline into January 2024. From mid-January through to the present prices have been high for the period. An unknown factor in future pricing will be the incidence rate and severity of highly pathogenic avian influenza in spring months. Close to 13 million hens and 2.5 million pullets were depopulated during the fourth quarter of 2023 among five states with heavy losses in California.
  • January 2023 USDA average nest-run production cost for generic eggs from caged flocks, applying updated inputs was down 4.1 cents per dozen to 76.8 cents per dozen compared to the December 2023 value of 80.9 cents per dozen, mainly attributable to an 11.7 percent lower average feed cost per dozen. Approximately 60 cents per dozen should be added to the USDA benchmark nest-run cost to cover processing, packing material and transport to establish a realistic price as delivered to warehouses.
  • January 2024 USDA benchmark nest-run margin attained a positive value of 95.2 cents per dozen for generic eggs from caged flocks compared to a positive margin of 89.5 cents per dozen for December 2023. Average nest-run monthly margin over 2023 was 64.2 cents per dozen compared to 155 cents per dozen in 2022. This differential was mainly due to higher prices following HPAI-depletion of flocks. It is emphasized that the U.S. benchmark price reflects nest-run conventional eggs.
  • The January 2024 national flock in production (over 30,000 hens per farm) was stated by the USDA to be down 2.0 percent or 6.1 million hens (rounded) to 299.7 compared to the revised December 2023 value of 305.8 million. This figure apparently takes into account depletion of 4.2million hens during December 2023 that were not recorded in the month. Approximately 3.5 million hens returned to production from molt in January together with projected maturation of 22.0 million pullets, with this number offset by depletion of spent flocks. During the fourth quarter of 2023 approximately 13 million hens were depopulated due to HPAI in five states.
  • December 2023 pullet chick hatch of 24.2 million was up 0.8 percent or 0.2 million chicks from November 2023.
  • December 2023 exports of shell eggs and products combined was up 38.8 percent from November 2023 to 604,100 case equivalents representing the theoretical production of 8.0 million hens. The increase was attributed to elevated demand especially in products following flock depopulations in importing countries due to HPAI

 

TABLES SHOWING KEY PARAMETERS FOR JANUARY 2024.

Summary tables for the latest USDA January 2024 flock statistics, costs and unit prices made available by the EIC on February 16th 2024 are arranged, summarized, tabulated and compared with values from the previous January 10th 2023 posting reflecting December 2023 costs and production data as applicable. Monthly comparisons of production data and costs are based on revised USDA values.

 

VOLUMES OF PRODUCTION REFECTING THE ENTIRE INDUSTRY

 

PARAMETER

January 2024

 DECEMBER 2023

Table-strain eggs in incubators

49.0 million (Jan.)

 49.0 million (Dec.)

Pullet chicks hatched

24.2 million (Dec.)

 24.0 million (Nov.)

Pullets to be housed 5 months after hatch

21.8 million (May.)

 21.7 million (Apr.)

EIC 2023 December 1st Flock Projection (estimate)

328.9 (Jan.)

321.6 million (Dec.)

National Flock in farms over 30,000 

299.7million (Dec.)

305.8 million (Nov.)

National egg-producing flock 

316.5 million (Dec.)

322.8 million (Nov.)

Cage-free flock excluding organic

105.4 million (Jan.)

105.4 million (Dec.)

Proportion of flocks in molt or post-molt

12.5% (Jan.)

12.7% (Dec.)

Total of hens in National flock, 1st cycle (estimate)

 276.9 million (Dec.)

 279.5 million (Nov.)

Total U.S. Eggs produced (billion)

8.14 December

8.02 November

Total Cage-Free hens in production

122.3 million (Jan.)

12.3% Organic

123.9 million (Dec.)

14.9% Organic

“Top-5” States hen population (USDA)1

147.9 million (Dec.)

153.7 million (Nov.)

Notes 1. Texas excluded to maintain confidentiality

 

PROPORTION OF U.S. TOTAL HENS BY STATE, 20231

Based on a nominal denominator of 300 million hens in flocks over 30,000 covering 94.6 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

DECEMBER *

2023

 NOVEMBER*

 2023

 

 Iowa

14.3%

13.8%

 

Indiana

11.8%

11.5%

 

Ohio

12.6%

13.2%

 

Pennsylvania

8.0%

8.1%

 

Texas (estimate)

7.5% ?

7.4%

 

California

3.0%

3.5%

 
  1. Values rounded to 0.1%

*USDA data is questioned based on known values for hen depopulation and pullet placements with discrepancies in stated values during the 4th quarter of 2023

Rate of Lay, weighted hen-week (USDA) 83.0% November 2023. 82.8% December 2023

Revised per capita egg consumption 2020:- 285.6 (down 7.8 eggs from 2019)*

Revisedper capita egg consumption 2021:- 282.5 (down 3.1 eggs from 2020)*

Revised per capita egg consumption 2022:- 279.0 (down 3.5 eggs from 2021 due to HPAI) Projected per capita egg consumption 2023:- 281.3 (up 1.3 eggs from 2022) Forecast per capita  egg consumption 2024 284.4 (up 3.1 eggs from 2023 accepting HPAI losses)

*Revised, using data from USDA Livestock, Dairy and Poultry Outlook January 19th 2023 taking into account demand from the food service sector and presumably including the effect of HPAI depopulation.

 

Egg Inventories at beginning of January 2024:

Shell Eggs: 1.83 million cases down 5.7 percent from December 2023.

Frozen Egg Products: 769,306 case equivalents up 2.0 percent from December 2023

Dried Egg Products: Not disclosed since March 2020 following market disruption due to COVID. Moderate level of inventory are assumed

Eggs broken under FSIS inspection (million cases)

NOVEMBER 2023, 6.73 DECEMBER 2023, 6.41


 


Egg Exports

02/11/2024

Export of Shell Eggs and Products, 2023

 

Exports of shell eggs during the 12-month period commencing March 2022 were constrained by availability due to progressive and cumulative depletion of 44 million hens as a result of HPAI divided among spring and fall waves. The national flock was about 20 million hens lower than the pre-HPAI complement on an average weekly basis during 2022. Sharp rises in price as a result of supply-demand disequilibrium made U.S. export prices non-competitive as denoted by lower volumes over successive months from March 2022. Egg products were also impacted but to a lesser extent than shell eggs. During June 2023 shell and product exports combined represented 2.5 percent of total production, more than double the volume recorded in January 2023 but exports declined in July to 1.9 percent of production by U.S. flocks. At the present time the national flock is approximately 12 million hens lower than pre-HPAI levels with rising prices that will constrain exports. Combined shell and product exports in November represented 2.0 percent of the output of the national flock. It is questioned whether lost markets other than the USMCA and Caribbean nations will be reclaimed over the intermediate term. Sporadic and short-term exports may be made to various nations based on supply disruption caused by HPAI.

 

USDA-FAS data collated by USAPEEC, reflecting export volume and values for shell eggs and egg products are shown in the table below comparing 2023 with 2022:-

 

PRODUCT

2022

2023

Difference

Shell Eggs

     

Volume (m. dozen)

69.5

89.4

+19.9 ( +28.6%)

Value ($ million)

150.9

162.2

+11.3 ( +7.5%)

Unit Value ($/dozen)

2.17

1.81

-36.0 ( -16.6%)

Egg Products

     

Volume (metric tons)

25,233

29,814

 +4,581 (+18.2%)

Value ($ million)

115.5

134.3

+18.8 (+16.3%)

Unit Value ($/metric ton)

4,577

4,505

-72 (-1.6%)

 

U.S. EXPORTS OF SHELL EGG AND EGG PRODUCTS DURING

2022 COMPARED WITH 2023

 

SHELL EGGS

 

Shell egg exports from the U.S. during 2023 increased by 19.9 percent in volume and gained 7.5 percent in total value compared to 2022. Unit value declined 16.6 percent to $1.81 per dozen compared to the corresponding month in 2022. For December 2023 volume was up 17.9 percent to 7.9 million dozen but value was down by 51.1 percent to $14.3 million compared to December 2022 and with a unit value of $1.81 per dozen.

 

Canada was the leading importer of shell eggs during 2023, with 46.3 million dozen representing 51.8 percent of volume and 59.0 percent of the $162.2 million total value of U.S. shipments of shell eggs. Unit price in 2023 was $2.07 per dozen compared to $2.80 per dozen for 31.8 million dozen exported during 2022. During December 2023 first-ranked Canada with 5.1 million dozen represented 64.5 percent of U.S. shell egg exports of 5.1 million dozen and 62.9 percent of the total value amounting to $9.0 million. Volume was unchanged but value was 64.0 percent lower than corresponding figures for December 2022. Imports by Canada were driven by increased consumer demand coupled with depletion of some domestic flocks due to HPAI. The controlled supply situation in Canada inhibits flexibility necessitating imports from the U.S. to balance availability with demand.

 

Mexico was the second-ranked importer of shell eggs over 2023 with a volume of 15.0 million dozen representing 16.8 percent of export volume and 10.7 percent of value. This discrepancy was due to a low unit value of $1.16 per dozen compared to an average value of $1.81 per dozen for all exports. During December, Mexico imported 0.6 million dozen with a value of $0.9 million at a unit price of $1.50 per dozen. Mexico represented 7.6 percent of volume and 6.3 percent of value of shell egg exports during the month.


 


USDA Agricultural Prices Report

11/17/2023

THE USDA Agricultural Prices Report released October 31st posted September prices for agricultural commodities and expenditures.

 

September Prices Received Index, down 2.9 percent from August

 

 The USDA ERS summarized prices as follows:-“The September Prices Received Index 2011 Base (Agricultural Production), at 122.6, decreased 2.9 percent from August and 7.1 percent from September 2022. At 113.9, the Crop Production Index was down 4.2 percent from last month and 11 percent from the previous year. The Livestock Production Index, at 133.1, decreased 0.9 percent from August, and 2.6 percent from September last year. Producers received lower prices for corn, hogs, soybeans, and lettuce during September, but higher prices for broilers, milk, grapes, and broccoli. In addition to prices, the volume change of commodities marketed also influences the indexes. In September, there was decreased marketing of cattle, wheat, cotton, and peaches and increased monthly movement for soybeans, corn, dry beans, and apples”.

September Prices Paid Index, Up 0.1 Percent from August

 

“The September Prices Paid Index for Commodities and Services, Interest, Taxes, and Farm Wage Rates (PPITW), at 138.8, is up 0.1 percent from August 2023 but unchanged from September 2022. Higher prices in September for feeder cattle, feeder pigs, diesel, and nitrogen more than offset lower prices for feed grains, complete feeds, concentrates, and hay & forages”.

 

Corn farmers received $5.21 per bushel in September 2023 compared to $5.73 per bushel in August 2023, down 9.1 percent. The price received in September 2022 was $7.09 per bushel

 

Soybean farmers received $13.20 per bushel in September 2023 compared to $14.10 per bushel in August 2023, down 6.8 percent. The price received in September 2022 was $14.20 per bushel

 

The September 2023 egg price received by farmers was $ 1.22 per dozen for table eggs lower than $1.35 per dozen in August 2023 and compared to $2.65 per dozen in September 2022. The sharp year-on-year increase is attributed to disequilibrium between supply and demand. Highly pathogenic avian influenza resulted in depletion of 44 million hens with a reduction of 20 million producing birds in the supply flock on average from mid 2022 onwards. This situation was coupled with increased demand as consumers increased purchases of eggs representing a competitively priced protein source in an inflationary environment.


 

USDA Grain Stocks Report

09/29/2023

The USDA quarterly Grain Stocks Report released on September 29th 2023, documented storage of the major commodities, classified according to on-site and remote facilities including elevators and commercial installations. Quantities of corn and soybeans, the two major commodities relevant to the cost of poultry production were:-

“Corn stocks in all positions on September 1st 2023 totaled 1.36 billion bushels, down one percent from September 1st 2022. Of the total stocks, 605 million bushels are stored on farms, up 19 percent from a year earlier. Off-farm stocks, at 756 million bushels, are down 13 percent from a year ago. The June to August 2023 indicated disappearance is 2.75 billion bushels, compared with 2.97 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 2022 corn for grain production is revised down 15.0 million bushels from the previous estimate. Corn silage production is revised down 291 thousand tons. Planted area is revised to 88.6 million acres, and area harvested for grain is revised to 79.1 million acres. Area harvested for silage is revised to 6.84 million acres. The 2022 grain yield, at 173.4 bushels per acre, is up 0.1 bushel from the previous estimate. The 2022 silage yield, at 18.7 tons per acre, remains unchanged from the previous estimate”.

 

“Soybeans stored in all positions on September 1st 2023 totaled 268 million bushels, down two percent from September 1st 2022. Soybean stocks stored on farms totaled 72.0 million bushels, up 14 percent from a year ago. Off-farm stocks, at 196 million bushels, are down 7 percent from last September. Indicated disappearance for June - August 2023 totaled 528 million bushels, down 24 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 2022 soybean production is revised down 5.93 million bushels from the previous estimate. Planted area is unchanged at 87.5 million acres, but harvested area is revised to 86.2 million acres. The 2022 yield, at 49.6 bushels per acre, is revised up 0.1 bushel from the previous estimate”.

 

Prices and commentary are incorporated in the Weekly Energy, Economy and Commodity Report posted each week and a summary of the WASDE #640 released on September 12th is retrievable under the STATISTICS tab.


 

Planted Acreage Report

06/30/2023

The June 30th 2023 Planted Acreage report documented the respective areas planted to corn and soybeans, the two commodities of relevance to the poultry industry. The USDA confirmed:-

 

Corn-planted area for all purposes in 2023 is estimated at 94.1 million acres, up six percent or 5.52 million acres from last year. This represents the third highest planted acreage in the United States since 1944. Compared with last year, planted acreage is expected to be up or unchanged in 43 of the 48 estimating States. Area harvested for grain, at 86.3 million acres, is up nine percent from last year.

 

Soybean-planted area for 2023 is estimated at 83.5 million acres, down five percent from last year. Compared with last year, planted acreage is down or unchanged in 21 of the 29 estimating States.

 

Together with the Grain Stocks report the Planted Acreage data moved the market for corn and soybeans by about five percent but in contrasting directions.

 

For corn the acreage was above the most optimistic projection although offset by a lower stock. At 14H30 on the CME after the release of the two USDA reports, corn was down 25 cents per bushel to 556 cents for July delivery and for September, corn was down 34 cents per bushel to 489 cents.

 

For soybeans the reduced acreage and consequently lower ending stocks was bullish for the new crop. At 14H30 CME soybeans were up 75 cents per bushel to 1,558 cents for July delivery and for September the soybean price was up 73 cents per bushel to 1,354 cents.


 

USDA-ERS Predicts Egg Prices for 2023

02/27/2023

According to USDA economists, retail egg prices increased by 8.5 percent in January 2023, approximately 70.1 percent above January 2022.  The USDA-ERS now predicts that egg prices will increase by 37.8 percent in 2023 but with a wide range of 18.3 to 62.3 percent attributed to volatility.  Concurrently the USDA-ERS predicted a 4.7 percent increase in the price of meats, 7.2 percent for dairy products and 12.8 percent for cereals and bakery products.

 

Wholesale farm-level egg prices are predicted to increase by 7.4 percent in 2023 with a wide prediction interval of -32.6 to 76.1 percent.  Egg prices are extremely volatile, complicating reliable predictions.

 

EGG-NEWS will monitor weekly USDA wholesale prices by region and average retail prices to document retail margins.


 




























































































































































































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