Egg Monthly

06/12/2019

Review of May 2019 Production Costs and Statistics.

May 2019 USDA Ex-Farm Benchmark Price Down 41.8 Percent from April 2019 to 23.1 cents per dozen Consistent with Seasonal Purchase Trends and Oversupply.

  • May 2019 USDA Average Nest-run Production Cost 0.2 Percent Higher than April 2019 at 59.57 cents per dozen.

  • May 2019 USDA Benchmark Nest-run Loss Increased from April 2019 to 36.5 cents per dozen.

  • May National Flock ( over 30,000 hens/farm) Down 0.4 million or 0.2 percent to 324.7 million.

 

INTRODUCTION.

Summary tables for the latest USDA May 2019 prices and flock statistics made available by the EIC on June 12th 2019 are arranged, summarized, tabulated and reviewed in comparison with values from the previous May 12th 2019 posting reflecting April 2019 cost and production data.

COSTS & REVENUE

Note:

From January 2019 onwards EIC has used USDA-AMS data for regional corn, soybean and standard feed prices. The basis for corn will be cash payment except for California (10-day delivery) and Louisiana and Oregon (30-day delivery). For soybean meal a similar approach is applied with 20-days for Minnesota. It is noted that January 2019 prices are not directly comparable with December 2018. Month-to-month comparisons in 2019 will be valid.

Parameter

MAY 2019

APRIL 2019

5-Region Cost of Production ex farm (1st Cycle)

59.57 c/doz

59.45 c/doz

Low

56.28 c/doz (MW)

55.77c/doz (MW)

High

77.28 c/doz (CA)

77.98 c/doz (CA)

Components of 6-Region 1stCycle Cost of Production:-

 

MAY 2019

APRIL 2019

Feed

30.73 c/doz

30.63c/doz

Pullet depreciation

10.86 c/doz

10.86 c/doz

Labor (estimate)

4.00 c/doz

4.00 c/doz

Housing (estimate)*

5.00 c/doz

5.30 c/doz

Miscellaneous and other*

8.97 c/doz

8.66 c/doz


* Adjusted February 2019

Ex Farm Margin (rounded to nearest cent) according to USDA values reflecting MAY 2019:-

23.1 cents per dozen1- 59.6 cents per dozen = -36.5

(April 2019 comparison 39.7 1 cents per dozen - 59.5 cents per dozen = -19.8 cents per dozen.)

Note 1: USDA Blended egg price

   

MAY 2019

APRIL 2019

USDA

Ex-farm Price (Large, White)

23.1 c/doz

39.7 c/doz

 

Cage-free to packing plant

150.6 c/doz

156.0 c/doz. (March)

 

Warehouse/Dist. Center

50 c/doz (April)

74.0 c/doz (March)

 

Store delivered (estimate)

55 c/doz (April)

79.0 c/doz (March)

 

Dept. Commerce Retail

146.3 c/doz (April)

155.4 c/doz (March)

Layer Feed Cost

MAY 2019

APRIL 2019

See note on source of data: now USDA

U.S. Average

$195.76/ton

 

$195.12/ton

High

$221.39/ton (West)

$225.31/ton (West)

Low

$177.36/ton (MW)

$174.48/ton (MW)

Differential

$ 44.03/ton

$ 50.83/ton

Pullet Cost (19 Weeks) $3.76 MAY 2019 $3.77 APRIL 2019

 

VOLUMES OF PRODUCTION

 

PARAMETER

MAY 2019

APRIL 2019

Table-egg strain eggs in incubators

55.1 million

58.4 million

Pullet chicks hatched

30.3 million (April)

27.8 million (March)

Pullets to be housed in 5 months

27.4 million (Sept.)

25.1 million (Aug.)

     

National Flock in farms over 30,000

324.7 million (April)

325.3 million (March)

National egg-producing flock

340.2 million (April)

340.7 million (March)

     

Proportion flock in molt or post-molt

15.6% (April)

15.1% (March)

Total of hens in flocks over 30,000, 1st cycle (estimate)

288.1 million (April)

276.5 million (March)

* No December data

Total U.S. Eggs produced

8.18 billion (April)

8.42 billion (March)

Cage-Free hens in production

66.7 million (May)

23.7% Organic

66.4 million (April)

23.6% Organic

"Top-5" States hen population (USDA)

165.2 million (estimate*.)

165.7 (March)

* Texas excluded to maintain confidentiality

PROPORTION OF U.S. TOTAL HENS BY STATE, 2018

Based on a denominator of 325 million hens in flocks over 30,000.

USDA has amended inclusion of specific states in regions and eliminated Texas data to protect confidentiality of Company flock sizes

 

STATE

APRIL 2018

MARCH 20181

Proportion by region (FEB. 2019)

Iowa

17.7%

17.7%

MW 53.7%

Indiana

10.3%

10.5%

NE 10.4%

Ohio

11.1%

11.0%

SE 6.7%

Pennsylvania

7.8%

7.8%

SC 5.2% (exc. TX)

Texas (estimate)

5.8%

?%

CA 4.1%

California

4.0%

4.0%

NW 2.9%

1. Values rounded to 0.1%

Rate of Lay, weighted hen-week (USDA) 80.0% (MAY) 80.1% (APRIL)

Actual USDA-ERS 2016 U.S. per capita annual egg consumption post HPAI:- 271.6 eggs (+15.8 from 2015)

Actual USDA-ERS 2017 U.S. per capita annual egg consumption:- 276.3 eggs (+4.7 from 2016)

Estimated USDA-ERS 2018 U.S. per capita annual egg consumption to be:- 278.8 eggs (+2.5 from 2017)

Projected USDA-ERS 2019 U.S. per capita annual egg consumption to be:- 279.8 eggs (+1.0 from 2018)

Egg Inventories at beginning of MAY:

Shell Eggs: 1.96 million cases down 2.8 percent from April.

Egg Products: 2.87 million case-equivalents down 1.7 percent from April.

Eggs broken under FSIS inspection (million cases) APRIL 6.870 MARCH 6.833

Cumulative 2019: number of cases produced (million) 89.8 Jan.-April

Cumulative 2019: proportion of total eggs broken 30.1%

 

EXPORTS: APRIL 2019 Data.

 

Parameter

Quantity Exported

Exports:

 

Shell Eggs (thousand cases)

APRIL 405 MARCH 387

Products (thousand case equivalents)

APRIL 333 MARCH 283

TOTAL (thousand case equivalents)

APRIL 738 MARCH 670

*Representing 3.3 percent of National production in March 2019.

 

COMMENTARY ON MAY 2019 COSTS AND STATISTICS

The following comments and comparisons are provided on May 2019 USDA statistics:-

MAY 2019 COST AND REVENUE DATA

The USDA reports data for six regions, respectively comprising the Northeast, South East (Mid-Atlantic), South Central, Midwest, Northwest and California (NW and California combined in some tables).

From March 2019 onward some state data is not released to maintain confidentiality where a company predominates in a specific state or region.

  • The USDA ex farm benchmark blended egg price in May 2019 decreased by 41.8 percent or 16.6 cents per dozen from April 2019 to 23.1 cents per dozen, contributing to a loss of 36.5 cents per dozen based on 'nest-run' (delivered from the laying house). The May 2019 USDA benchmark price of 23.1 cents per dozen should be compared to 65.1 cents per dozen for the corresponding month in 2018 and 37.1 cents per dozen in May 2017 post-recovery following HPAI.

  • During May 2019 the feed component of production cost averaged 30.7 cents per dozen higher by 0.3 percent from April 2019. Year-to-date average feed price is 31.01 cents per dozen. The 2018 average feed cost was 33.3 cents per dozen compared with an average feed cost of 32.0 cents per dozen in 2017.
  • Combining data from the USDA and the EIC, producers recorded a loss of 36.5 cents per dozen at farm-level for flocks in May 2019 compared to a negative margin of 19.8 cents per dozen in April, 9.8 cents per dozen in February and 18.1 cents per dozen in January 2019. The aggregate algebraic margin for the first five months of 2019 was -28.3 cents per dozen or an average monthly loss of 7.1 cents per dozen.

    The cumulative margin for entire 2018 was 424.0 cents per dozen or a monthly average of 35.3 cents per dozen. The algebraic margin for entire 2017 was a positive 39.2 cents per dozen, with the first eight months negative comparing production cost against USDA benchmark 'nest run' values. The algebraic average margin for entire 2016 was a loss of 9.6 cents per dozen with negative values recorded for eight consecutive months.

  • The simple average price of feed for May 2019 over 5-regions was $195.76 per ton, 0.3 percent higher using USDA-AMS data by $0.65 per ton compared to April 2019. Southwest data was not disclosed for May to avoid compromising one company that predominates in Texas. The highest cost among five regions was in the West at $221.39 per ton compared to the lowest region, the Midwest at $177.30 per ton. The average figure includes ingredients plus milling and delivery at approximately $10 per ton. The benchmark price of corn was $148.22 per ton in May 2019, up $4.73 per ton or 3.3 percent from April taking into account the difference in basis. A decrease of 3.6 percent in the price of soybean meal from $316.21 per ton in April to $304.70 per ton in May contributed to a lower feed cost. There was a $48.10 per ton differential in corn price between the Midwest and the West in May 2019.

  • Feed price will continue to be a major factor driving production cost and hence margin. Unknown factors influencing feed cost during the second quarter of 2019 will include disruption of international trade due to tariffs imposed by China and a possible settlement of the ongoing dispute. Each $10 per ton difference in feed cost represents 1.75 cents per dozen.

  • The EIC-calculated the 6-Region total nest-run production cost in May 2019 to be 59.57 cents per dozen, 0.12 cent per dozen more than in April. Production costs during May 2019 ranged from 56.28 cents per dozen in the Midwest up to 77.28 cents per dozen in California which was higher than the Midwest region by 21.0 cents per dozen.

  • Retail egg prices as determined by the Department of Commerce for April 2019 averaged 146.3 cents per dozen, 8.1 cents per dozen less than in March 2019. During April 2017 and 2018 retail prices were respectively 140.9 and 208.7 cents per dozen. During entire 2016 and extending through mid-2018, retail prices did not decline in proportion to ex-farm prices allowing higher margins at retail thereby depressing demand.

 

MAY 2019 PRODUCTION DATA

 

  • According to USDA data, the estimated average complement of U.S. hens in flocks over 30,000 during April 2019 amounted to 324.7 million, reflecting a seasonal adjustment in flock size. The average total U.S. flock including hens in molt on all farms counted by the USDA amounted to 340.2 million in April. The average end-of-year flock sizes over the past five years respectively were, 2012 (299 million); 2013 (308 million); 2014 (311 million); 2015 (291 million post HPAI losses) and in 2016 (319 million). The EIC predicts the December 2019 total flock will attain 345.3 million.

  • Pullet chick hatch was up 9.0 percent in April 2019 to 30.3 million compared to the previous month at 27.8 million. The high October 2018 value of 27.4 million was in anticipation of the Easter 2019 market. It is evident that if lower prices prevail during early summer flock placements will be constrained by some producers cancelling pullet-chick orders.

  • The total in-molt and post-molt population of hens in the 5-Regions monitored by the USDA attained 15.6 percent of the national flock in May 2018, compared to 15.1 percent in April. The annual averages were 17.4 percent for 2018 and 18.0 percent in 2017. The high value of 23.8 percent in 2016 was due to the loss of hens in the 2015 HPAI epornitic.

  • Average monthly pullet transfer to laying houses during the third and fourth quarters of 2018 amounted to 26.0 and 24.7 million respectively. The monthly projection for pullets to be transferred to laying houses during the second quarter of 2019 is 22.0 million.

  • The projected hatchery supply flock remained at 2.12 million in April 2019. Peak parent-flock placements attained 3.1 million hens in production in June 2015, coinciding with the end of the HPAI epornitic, to a low of 2.5 million hens during the 4th Quarter of 2016. Projections show monthly averages of 2.2 and 2.3 million breeder hens in production during the third and fourth quarters of 2019. The October 2018 breeder flock was 2.4 million in anticipation of progeny reaching maturity for Easter 2019.

  • Average production of 80.0 percent in May 2019 is reflected in the number of young pullets approaching and attaining peak production. This is evidenced by the volume and hence price of mediums Average rate of lay attained 78.7 percent during 2016 and increased to 79.8 percent in 2017. The average rate of lay during any period is a function of the proportion of pullets placed, the rate of depletion of flocks and retention of molted hens for a second cycle. Average flock production will fall as weighted flock age increases or will rise due to early depletion and restricting production to the first cycle.

  • Slaughter of spent light hens in plants under FSIS inspection during April 2019 was down 3.0 percent from March 2019 attaining 3.2 million. Spent-hens are shipped live to Canada from Northern-tier U.S. states or are rendered or composted in other regions. Approximately 14 million spent hens are disposed of each month.

APRIL 2019 EXPORT DATA.

 

  • According to USDA-FAS data, 404,500 cases of shell eggs were exported in April 2019, compared to 386,500 in March 2019, representing 1.8 percent of total production. This value should be compared to the high value of 409,700 cases in March 2016 prior to the onset of HPAI. During April 2019 the following regions were the leading importers:- North America, comprising the two neighboring NAFTA/USMCA nations (51.5 percent, was 61.6 percent, was 51.5 percent), East Asia (32.0 percent was 42.2 percent.). Shipments in April 2019 to the Middle East decreased to 1.3 percent of monthly volume with 5,300 cases, down from 9,700 cases in March 2019.
  • Exports of egg products in April 2019 were up 17.8 percent from March 2019 to 333,300 case-equivalents representing 1.5 percent of U.S. output. The following regions were the leading importers of egg products by proportion of volume shipped in April:- North America or our NAFTA/USMCA neighbors (received 48.1 percent), East Asia (24.2 percent), the EU-28 (6.1 percent) and the Caribbean (7.4 percent, was 3.6 percent).

  • Collectively, exports of shell eggs and products in April 2019 represented the equivalent of approximately 11.8 million hens in production during the month, attaining 737,800 case-equivalents (was 669,600 in March 2019). This was a 23.1 percent decrease compared to monthly average shipments of 960,000 case-equivalents exported over the first four months of 2015 prior to the advent of HPAI, indicating the need to re-build markets.

     

    Efforts in this respect are in progress attributed to cooperation between the AEB and USAPEEC both in existing and new markets. Specific attention is directed to nations with the potential to import U.S. product based on landed price against competition. Exports of both egg-products and shell eggs in April 2019 corresponded to 3.3 percent of a nominal national flock of approximately 325 million hens in production on commercial farms holding more than 30,000 hens.

  • There is no scientific reason why any nation should embargo pasteurized egg products from an approved plant, based on a diagnoses of avian influenza or END in a state or country.

 

 


















































































































































































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