The USDA Economic Research Service issued an updated forecast of egg production on January16th 2020 updating the previous December 16th 2019 report. The volume of eggs produced and per capita consumption in 2019 were increased by 3.1 and 2.1 percent respectively compared to 2018 data. The discrepancy represents over-production and hence lower prices. The benchmark New York price was accordingly reduced by 31.9 percent in unit value. Production data reflecting 2016 and 2017 should be compared to 2015, impacted by the Spring outbreak of HPAI in the upper-Midwest. The price elasticity of eggs is denoted by the disparity in the decline in the New York price benchmark relative to forecast volume of production. The latest data is reflected in the table below:-

Source: Livestock, Dairy and Poultry Outlook -January16th 2020

*Impacted by Spring 2015 HPAI outbreaks. Consumption in 2014, 267 eggs per capita

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

Review of December 2019 Production Costs and Statistics.

• December 2019 USDA ex-farm blended nest-run benchmark price was 81 cents per dozen or 24.2 percent lower than in November 2019 at 106.8 cents per dozen. Higher price during early December was consistent with seasonal purchase trends but was moderated in extent and duration by oversupply.
• December 2019 USDA average nest-run production cost was 0.1 cent per dozen higher than November 2019 at 59.9 cents per dozen.
• December 2019 USDA benchmark nest-run margin attained a positive value of 21.1 cents per dozen compared to a positive margin of 47.0 cents per dozen in November.
• November national flock ( over 30,000 hens/farm) was up 4.2 million or 1.3 percent to 323.7 million.
• November pullet chick hatch was down 8.1 percent from October to 23.9 million.
• November exports of shell eggs and products were down 16.9 percent to 795,800 case equivalents representing the theoretical production of 10.8 million hens.

INTRODUCTION.

Summary tables for the latest USDA December 2019 prices and flock statistics made available by the EIC on January 14th 2020 are arranged, summarized, tabulated and reviewed in comparison with values from the previous December 6th 2019 posting reflecting November 2019 cost and production data.

USDA-FAS data collated by USAPEEC, reflecting export volume and values for shell eggs and egg products are shown in the table below comparing the first eleven months of 2019 with the corresponding period in 2018:-

U.S. SHELL EGG AND EGG PRODUCT EXPORTS DURING

JANUARY-NOVEMBER 2019 COMPARED WITH 2018

Source USDA-FAS/USAPEEC

OVERVIEW

Predictably the January 10th 2020 USDA WASDE Report was updated from December with more accurate yields for corn and soybeans but with relatively unaltered price projections for these commodities.

Corn and soybean harvests reflected in the January 2020 WASDE are based on actual yield and harvested area. The corn acreage harvested was 81.5 million acres, 0.4 percent down from the December 2019 WASDE (81.8 million in 2018). Soybeans were harvested from 75.0 million acres, 0.8 percent down from the December 2019 WASDE. (88.3 million acres in 2018)

The January 2020 WASDE projected corn yield was raised by 0.6 percent to 168 bushels per acre, (178.9 bushels in 2018). The relatively low value was due to late planting, delayed development and adverse weather before harvest. Soybean yield was raised 1.1 percent to 47.4 bushels per acre from the December 2019 WASDE, (52.1 bushels in 2018).

The November USDA projection for the ending stock of corn was lowered 0.9 percent to 1,892 million bushels. Ending stock for soybeans will be unchanged from the December estimate at 475 million bushels.

Projections for ending stocks of both corn and soybeans have influenced recent CME price quotations concurrently with conflicting reports on trade negotiations with China. It is presumed that projections are based on the assumption that there will be continued trade in accordance with the Phase-1 agreement on trade with China in 2020. Some orders representing four percent of projected 2019 exports of soybeans were forthcoming in September after the August G-7 Summit in France. In mid-September, China rescinded a ban on all agricultural imports from the U.S. imposed on August 4th. This followed the announcement of a delay in introducing a September 1st threatened tariff of 10 percent on imports from China valued at $300 billion not already subject to duty.

To date there has been no announced commitment on either volumes or prices of commodities to be imported by China in 2020.

Based on the importance of cage-free production, the USDA-AMS issues a monthly report on volumes and prices for the information of Industry stakeholders. There is some doubt as to the accuracy of the individual monthly flock numbers especially with reports that show either no change or a significant increase in the cage-free flock for a specific month. It is suggested that a quarterly report with more accurate and consistent data would be suitable for the industry.

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

The USDA Cage Free Report for the month of December 2019 released on January 6th 2020 documented a static population of hens producing under the Certified Organic seal and for generic cage-free production (Accepting USDA data). The respective numbers of hens in organic and cage-free flocks should reflect the realities of supply and demand in the market over successive quarters. Average flock production was held at 76.3 percent for both categories of non-caged hens reflecting younger flocks placed in anticipation of the Christmas market.

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