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Consumers Not Benefiting from Lower Wholesale Prices for Eggs

02/13/2023

During the past six weeks, the Midwest Large price has fallen by 50 percent.  In contrast, shelf prices remain high ranging from $4 to $5 per dozen and have yet to demonstrate the effect of lower prices paid to producers.  It is critical that supermarket chains should maintain realistic margins to support consumption that is now adversely affected by prolonged high prices.  Production is limited by the fact that the National flock in production is approximately 20 million hens below pre-HPAI levels and is not increasing at the rate demonstrated after the 2015 epornitic.  Notwithstanding the limits to production, shell egg stock is rising denoting a drop in consumer demand. 

 

EGG-NEWS maintains that the current benchmark price discovery system works to the disadvantage of both producers and consumers by amplifying upward and downward swings.  A CME quotation for Midwest Large would be a more equitable indicator of price providing the category was actively traded.  Corn and soybean meal are the major variable costs input in production and are subject to CME quotations.  Accordingly, eggs should be traded on the exchange to avoid the distortions associated with the current price discovery system.