The USDA Economic Research Service issued an updated forecast of egg production on March 15th 2021 revising the previous February 16th 2021 report. The March projection of production was increased by 1.0 percent to 8,140 million dozen with a per capita consumption of 288.2 up 0.6 percent compared to 2020. The average 2021 benchmark New York bulk unit price was increased to 114 cents per dozen due to higher prices during the first and fourth quarters. Subsequent USDA forecasts will provide greater clarity on reopening of the economy that is still depressed with high unemployment attributed to COVID restrictions.

March 2021 data is shown in the table below:-

Source: Livestock, Dairy and Poultry Outlook –March 15th 2021

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

REVIEW OF FEBRUARY 2021 EGG PRODUCTION COSTS AND STATISTICS.

HIGHLIGHTS

• February 2021 USDA ex-farm blended nest-run benchmark price was 91.9 cents per dozen, 19.7 percent higher than the January 2021 value of 76.8 cents per dozen. The average monthly USDA benchmark ex-farm price for 2020 was 76.5 cents per dozen with a range of 52.9 cents per dozen in January to 159.7 cents per dozen in March. The downward price trend from early May through July 2020 was attributed to restoration of normal consumer purchasing patterns coupled with diversion of eggs from breaking to the shell-egg market. Currently stock levels and prices indicate relative balance between supply and demand with seasonal prices attributable to increased retail sales despite moderate over-production and continued diversion from the egg-breaking sector.
• February 2021 USDA average nest-run production cost was 0.8 cents per dozen higher than in January 2021 at 71.1 cents per dozen mainly due to feed cost. A downward adjustment of 2.5 cents in fixed and miscellaneous costs was introduced for January 2021 by the EIC invalidating direct comparison with February 2020.
• February 2021 USDA benchmark nest-run margin attained a positive value of 20.8 cents per dozen compared to a positive margin of 6.5 cents per dozen in January 2021.
• January 2020 national flock in production (over 30,000 hens/farm) was up 0.5 million hens or 0.2 percent to 310.8 million. There are approximately 3.4 million hens due to return to production from molt offset by depletion of older flocks.
• January 2021 pullet chick hatch was down 4.5 percent or 1.1 million from December 2020 to 25.4 million.
• January 2021 export of shell eggs and products combined was down 7.7 percent from December 2020 to 809,900 case equivalents representing the theoretical production of 11.7 million hens.

INTRODUCTION.

Summary tables for the latest USDA February 2021 prices and flock statistics made available by the EIC on March 8th 2021 are arranged, summarized, tabulated and reviewed in comparison with values from the previous February 22nd 2021 posting reflecting January 2020 cost and production data.

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

The USDA Cage-Free Report for the month of February 2021 released on March 1st 2021 documented a 1.2 percent increase in the population of hens producing under the Certified Organic seal to 17.5 million. Cage-free flocks increased by 3.9 percent to 67.5 million compared to January 2021. (rounded to 0.1 million). The respective numbers of hens in organic and cage-free flocks should reflect the realities of supply and demand in the market over successive quarters. It is evident that a noteworthy proportion of organic and cage-free eggs are down-priced to the generic category when comparing Nielsen retail sales data with potential production based on hen numbers documented by the USDA.

Average flock production was unchanged from January at 79.0 percent for both categories of non-caged hens. This reflects flocks of stable average age. Younger flocks increase availability of cage-free eggs and organic eggs pre-Christmas and pre-Easter. Average flock production represents a balance between older flocks and the higher relative production from pullet chicks placed during October 2020 and the few molted flocks resuming production during the month.

The wider range for both wholesale and retail prices this past month reflects the unexpected increase in demand and hence prices that were maintained during January 2021.

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

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

USDA-WASDE FORECAST #609 FEBRUARY 9th 2021

OVERVIEW

The February 9th 2021 USDA WASDE Report was updated from the January 2021 edition to reflect the 2021 season. There was no change in either corn or soybean harvest areas from the January WASDE report but this may be altered subsequently by world prices and weather considerations. The corn acreage to be harvested is currently estimated at 82.5 million acres and soybeans will be harvested from 82.3 million acres.

The February 2021 WASDE estimate of corn yield was held at172.0 bushels per acre, (175.8 bushels per acre in 2020). The estimate of soybean yield was maintained at 50.2 bushels per acre. (50.7 bushels per acre in 2020)

The February 2021 USDA projection for the ending stock of corn was reduced by 3.2 percent to 1,502 million bushels. Due to exports the ending stock for soybeans was reduced by 14.3 percent to 120 million bushels the lowest in over a decade.

Projections for ending stocks of both corn and soybeans have influenced recent CME price quotations concurrently with increased exports in accordance with the needs of China less than compliance with the Phase-One trade agreement. The February 2021 WASDE projected the corn price to be $4.30 per bushel and soybeans at 1,115 cents per bushel.

It is accepted that projections are based on the assumption that China sharply increased purchases partly to cover disruptions during the first quarter of 2020 by COVID-19. China booked substantial orders for corn and soybeans to be delivered through August for the 2019-2020 market year in addition to large quantities booked from September onwards for the 2020-2021 market year. Reports on volumes of commodities exports to China will be included in upcoming weekly editions of CHICK-NEWS and in subsequent mailings as data becomes available.

CORN

The corn harvest for 2021 documented in the February 2021 WASDE Report #609 is 14,183 million bushels consistent with actual data. The projected 2021 harvest can be compared to 14,507 million bushels in 2020 and is 6.4 percent lower than the previous 2016 record harvest of 15,148 million bushels. The “Feed and Residual” category was held at 5,650 million bushels. The “Ethanol and Byproducts” category was maintained at 4,950 million bushels despite reduced domestic demand for E-10 due to COVID-19 restrictions and competition in the export markets. Corn exports were raised 2.0 percent percent to 2,600 million bushels in the face of intense competition from Brazil and Argentine and high world domestic coarse grain production relative to demand. Ending stocks were reduced 3.2 percent 1,502 million bushels.

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

U.S. SHELL EGG AND EGG PRODUCT EXPORTS DURING 2019 COMPARED WITH 2020

Source USDA-FAS/USAPEEC

SHELL EGGS

Shell egg exports from the U.S. during 2020 increased by 2.6 percent in volume and 5.8 percent in total value compared to 2019. Unit value was 3.0 percent higher or 2.4 cents per dozen for the comparison between 2019 and 2020. The top two importers, Hong Kong and Mexico combined, represented 66.1 percent of volume and 58.0 percent of total value.

Mexico was the leading importer of shell eggs during 2020 with 51.5 million dozen representing 34.4 percent of volume and 28.2 percent of total value corresponding to a unit value of $0.68 per dozen. Prospects for additional sales will depend on continued acceptance of washed, white-shelled eggs held under refrigeration for retail sale, first announced in September 2018 but implemented in late 2019. For 2020 imports of shell eggs by Mexico increased by 90.0 percent in volume and 89.2 percent in value compared to 2019. During December 2020 1st-ranked Mexico imported 6.0 million dozen from the U.S., up 233.3 percent from December 2019 and valued at $4.3 million with a unit price of 71.7 cents per dozen, consistent with the USDA benchmark nest-run production cost.

Hong Kong was the second-ranked importer of shell eggs in 2020, with 47.4 million dozen representing 31.7 percent of volume and 29.8 percent of the $124.9 million total value of U.S. shipments of shell eggs. Average unit value was $0.78 cents per dozen, similar to the average prevailing nest-run USDA benchmark price during the first three quarters of 2020.

Canada was a distant third in rank as an importer during 2020 with 21.5 million dozen representing 14.4 percent of volume and 18.3 percent of total value at $22.8 million with a unit value of $1.06 per dozen. Canada reduced volume by 56.1 percent during 2020 compared to 2019. With the advent of COVID-19, April consignments of shell eggs were down 80.6 percent from 2019 and in May, June and July exports were negligible. During August 2020 exports resumed with 3.2 million dozen shipped followed by 4.2 million dozen in September, 4.0 million dozen in October but a sharp decrease to 1.0 million dozen in November and 2.8 million dozen in December. Shell eggs shipped to Canada represent the difference between domestic demand and production, limited by a national controlled marketing system that reduced farmers’ quotas.

The Middle East Region imported 12.1 million dozen during 2020 valued at $9.7 million with a unit price of $0.80 per dozen. Volume and value in 2020 were respectively higher by 101.7 percent and 83.0 percent compared to 2019. Southern E.U. nations in addition to India and Ukraine have a competitive transport advantage over the U.S in this market. Within the Middle East region the UAE ranked as the 4th largest importer from the U.S. with a volume of 7.5 million dozen. Israel did not import any appreciable quantity of U.S. shell eggs during September through December but 2020 total amounted to 2.3 million dozen.

The Caribbean Region represented 6.4 percent of export volume for 2020. This region was up 43.9 percent in volume and 31.8 percent in total value, an obvious improvement compared with 2019. The unit value of shell eggs exports to the Caribbean apparently averaged $1.22 per dozen, ($1.33 during 2019). This is disproportionately high compared with the average export realization, most probably because a proportion of shell eggs enumerated may have been either fertile hatching eggs or enriched specialty eggs.

EGG PRODUCTS

The total volume of exported egg products during 2020 increased by 9.7 percent 36,093 metric tons but total value of $99 million was lower by 1.2 percent compared to 2019. Unit value decreased by 9.9 percent to $2,742 per ton from $3,046 recorded for 2019. This decline reflects the relationship between World supply and demand with Ukraine and India as significant exporters.

 Japan was the leading importer based on a value of $32.0 million and a volume of 8,970 metric tons that represented 24.9 percent of the total U.S. exports of egg products, an increase of 1.5 percent compared with 2019. The high unit value of $3,567 per metric ton compares with the average value for all exports of $2,743 or $2,470 excluding Japan. The discrepancy in unit price reflects the product mix. With conclusion of a bilateral trade agreement the U.S. will no longer be at a competitive disadvantage with respect to the E.U. Japan was down in volume by 14.6 percent to 816 metric tons in December.

Mexico continued as the second-ranked importer based on volume in 2020. Mexico received the most volume of 9,774 metric tons comprising 27.1 percent of export volume and 19.1 percent of value with a unit price of $1,933 per metric ton. Imports of egg liquid by Mexico increased in 2020 by 52.7 percent over 2019. Mexico was up in volume by 25.3 percent to 877 metric tons in December.

Canada attained third in rank among importers purchasing 7,085 metric tons comprising 19.6 percent of volume and 14.3 percent of value with a low unit price of $2,004 per metric ton. During 2020 Canada increased volume by 11.4 percent and value increased 15.5 percent compared to 2019. During December 2020 Canada decreased volume by 3.5 percent compared to December 2019 to 485 metric tons.

Notable changes during 2020 included a 17.0 percent increase in exports to the UK+EU of 1,954 metric tons representing 5.4 percent of volume valued at $10.0 million at a unit price of $5,117 per metric ton. In December volume declined by 51.5 percent to 113 metric tons compared to December 2019. Unit value in December rose to $4,425 per metric ton, below the average for 2020.

COMMENTS

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

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

Both the END outbreak in backyard flocks in southern California and the localized and limited LPAI outbreaks and one HPAI isolation in turkey flocks in the Carolinas are now officially over. In accordance with OIE principles embargos should not be imposed on either the states or counties affected.

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