Big Dutchman USA is the sponsor of this special edition of EGG-NEWS that incorporates a review of USDA data on cage-free production and industry statistics covering December 2024.

Big Dutchman NATURA® Visio--a true open aviary system

The NATURA® Visio is a state-of-the-art installation designed to optimize flock production and to achieve the highest proportion of saleable eggs. The NATURA® Visio aviary system can be retrofitted to existing houses where height restrictions preclude alternatives. The configuration is compatible with multi-level structures. The low profile provides visibility of the flock facilitating management.

NATURA Visio two-tier configuration

The NATURA® Visio comprises two tiers each equipped with feeding, drinkers, and nests. The design incorporates a “step” concept encouraging vertical movement of hens between the upper and lower tiers reducing competition and contributing to an even distribution of the flock within the house. The design incorporates Big Dutchman durability of construction with the floors of the system galvanized with a zinc-aluminum coating to ensure an extended operating life.

Shell downgrades are reduced to a minimum by the design and location of nests on both tiers. Nests are staggered along the length of the installation and hens have access from either side of the system providing them with a comfortable laying environment. Eggs roll from the nests onto two eight-inch-wide belts of polypropylene or woven material to move eggs gently to a single elevator. Eggs laid on the system floor roll directly onto the egg belts without entering the nest, minimizing collisions with birds and other eggs to enhance egg quality. Nest pads fitted with soft fingers reduce fecal soiling and damage to shells. The floor of the nest tilts through 90º to restrict entry during the dark phase of each day. The location of nests and their design reduces the area of belt covers and avoids the need for hens to step up when entering nests. 

NATURA  Visio twin-belt egg collection

The design and location of perches is based on observations of hen behavior and contributes to optimal comfort and air circulation. The position of the approach perches encourages hens to face towards the aisles allowing manure to be collected on belts.

Each tier is equipped with a Champion™ chain feeding system using a specially designed wide trough equipped with lips to reduce wastage. An optional feeding circuit can be installed above the upper tier as required. Hens have access to drinker lines on each tier equipped with 360º nipples and incorporating drip cups.

The NATURA® Visio promotes movement of the flock among the tiers and the litter area allowing natural behaviors to reduce stress, contributing to optimal egg production. Uniform levels of light above the aisle and both the in-system and under-system lighting are compatible with the needs of the flock. Unrestricted airflow contributes to even flock distribution and acceptable moisture content and texture of litter.

NATURA Visio design promotes even distribution of flock among tiers and aisles

The NATURA® Visio aviary system offers the potential for maximum return on investment through harmonizing design with the behavioral requirements and genetic potential of the flock.

NATURA Viseo dimensions

For additional information, contact your regional sales representative or an authorized Big Dutchman distributor. To find the contact details for your area please visit

www.bigdutchmanusa.com/en/egg-production/contact/.

REVIEW OF DECEMBER 2024 EGG PRODUCTION COSTS AND STATISTICS.

This update of U.S egg-production statistics, costs and prices is sponsored by Big Dutchman USA for the information of stakeholders

DECEMBER HIGHLIGHTS

• December 2024 USDA ex-farm blended USDA nest-run, benchmark price for conventional eggs from caged hens was 424 cents per dozen, up 60 cents per dozen or 16.4 percent from the November 2024 value of 364 cents per dozen. The corresponding December 2022 and 2023 values were respectively $4.37 and $1.56 cents per dozen. For annual comparison, average monthly USDA benchmark price over 2023 was 146.0 cents per dozen compared to 247 cents per dozen for 2024. 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 shell eggs and products 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. Highly pathogenic avian influenza has emerged as a major driver with seasonal migration of waterfowl. Approximately 40 million hens and at least 2.0 million pullets were depleted in 2024 with close to 4 million during January to date.
• December 2024 USDA average nest-run production cost for conventional eggs from caged flocks over four regions (excluding SW and West), applying updated inputs was almost unchanged from November at 74.4 cents per dozen. The December average nest run production cost for other than caged hens was estimated by the EIC to be 93.4 cents per dozen. Approximately 60 cents per dozen should be added to the USDA benchmark nest-run costs to cover processing, packing material and transport to establish a realistic price as delivered to warehouses.
• December 2024 USDA benchmark nest-run margin for conventional eggs attained a positive value of 349.6 cents per dozen compared to a positive margin of 290.0 cents per dozen in November 2024. Average nest-run monthly margin over 2023 was 64.2 cents per dozen compared to 155 cents per dozen in 2022.
• December 2024 USDA benchmark nest-run margin for cage-free eggs attained a positive value of 673 cents per dozen compared to a positive margin of 361 cents per dozen in November 2024. Average nest-run monthly margin over 2024 was 440 cents per dozen compared with 100 cents per dozen in 2023.

• The November 2024 national flock (over 30,000 hens per farm) was stated by the USDA to be down 0.4 million hens (rounded and a probable over-count) to 311.3 million compared to the revised October 2024 value of 311.7 million. Approximately 3.0 million hens returned to production from molt in November together with projected maturation of 21.5 million pullets, with this number offset by depletion of an unknown number of spent hens.
• November 2024 pullet chick hatch of 24.4 million was down 11.3 percent or 3.1 million chicks from October 2024.
• November 2024 exports of shell eggs and products combined were down 19.6 percent from October 2024 to 325,000 case equivalents representing the theoretical production of 4.3 million hens. Canada and the Caribbean nations represented 95 percent of shell egg exports of 181,000 dozen. Japan, Canada and Mexico represented 72 percent of exports of egg products amounting to 144,000 case equivalents. Volumes shipped are based on the needs of importers, competition, availability in the U.S. and FOB price offered.

TABLES SHOWING KEY PARAMETERS FOR DECEMBER 2024.

Summary tables for the latest USDA December 2024 flock statistics, costs and unit prices made available by the EIC on January 9^th 2025 are arranged, summarized, tabulated and compared with values from the previous December 9^th 2024 release reflecting November 2024 costs and production data as applicable. Monthly comparisons of production data and costs are based on revised USDA values.

VOLUMES OF PRODUCTION REFLECTING THE ENTIRE INDUSTRY

*USDA Revised

• Revised USDA/EIC Note 1. Texas excluded to maintain confidentiality

PROPORTION OF U.S. TOTAL HENS BY STATE, 2024¹

Based on a nominal denominator of 290 million hens in flocks over 30,000 covering 95 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

1. Values rounded to 0.1%

Rate of Lay, weighted hen-week (USDA) 81.8% November 2024. 82.2% December 2024

*Revised USDA

*Revised, using data from USDA Livestock, Dairy and Poultry Outlook December 16^th 2024 taking into account demand from the food service sector and presumably including the effect of HPAI depopulation.

EGG INVENTORIES AT BEGINNING OF DECEMBER 2024:

EGGS BROKEN UNDER FSIS INSPECTION (MILLION CASES) October 2024, 6.91* November 2024, 6.57

EXPORTS NOVEMBER 2024: (Expressed as shell-equivalent cases of 360 eggs).

*Representing 1.5 percent of National production in November 2024 (1.9 percent in October 2024).

COSTS AND UNIT REVENUE VALUES¹ FOR CONVENTIONAL EGGS FROM CAGED HENS

Notes: 1. Excludes SW and West *USDA revised

Components of Production cost per dozen:-

Ex Farm Margin (rounded to nearest cent) according to USDA values reflecting DECEMBER 2024:-

424.0 cents per dozen¹- 74.4 cents per dozen =349.6 cents per dozen (November 2024 comparison: 364.0 cents per dozen – 74.0 cents per dozen = 290.0 cents per dozen.

Note 1: USDA Blended nest-run egg price

COSTS AND UNIT REVENUE FOR EGGS FROM CAGE-FREE HENS

* USDA Revised

Components of Production cost for cage-free eggs, per dozen:-

Ex Farm Margin (rounded to nearest cent) according to USDA values reflecting negotiated price for DECEMBER 2024:-

Cage-Free brown 766.0 cents per dozen¹- 93.4 cents per dozen = 672.6 cents per dozen

November 2024 455.0 cents per dozen - 93.4 cents per dozen = 361.6 cents per dozen

1. 
   Contract price, nest-run loose Range 135 to 235 c/doz. unchanged since July and unrealistic.
2. Range $1.65 to $3.35 per dozen
3. Unrealistic USDA prices!

* Conventional (non-organic) feed

Feed prices used are the average national and regional values for caged flocks. Excludes Organic feeds with prices substantially higher than conventional.

Hotraco Agri now a subsidiary of Munters will feature three innovations at the IPPE.  Hotraco technical representatives will be available on Booth B18042 to demonstrate systems and to review tailored applications for farms.

Products to be featured are:

Fortica MAX – This installation incorporates updated software and a 12-inch touchscreen to manage all electrical components in a house to enhance productivity.
Egg Flow Control – The Hotraco Agri Egg Flow Control system operates with the Antares Egg  Controller to synchronize egg flow by adjusting belt speeds to reduce shell damage.  The system provides real-time data on egg production with 99.5 percent accuracy.

• iHotraco Farm Manager – The Farm Manager system offers continual monitoring of all houses on a complex with a single dashboard to provide instant visualization of ventilation, feed and water consumption.  The system can  be tailored for specific operations and can monitor individual houses, a complete complex or multiple locations for effective management and profitability.

A combination of Hotraco Agri with parent company Munters allows seamless application of hardware and digital solutions.  Munters ventilation installations will be available for review on their Booth B26033.

This update of U.S cage-free production is sponsored by Big Dutchman USA for the benefit of producers in North America.

The USDA Cage-Free Report covering December 2024, released on January 2^nd 2025, documented the complement of hens producing under the Certified Organic Program to be 20.3 million (rounded to 0.1 million), down fractionally from November 2024. Depopulation was carried out through the fourth quarter as a result of HPAI. The number of hens classified as cage-free (but excluding Certified Organic) and comprising aviary, barn and other systems of housing apparently decreased by 5.6 million hens or 5.3 percent from November 2024 to 100.0 million, with extensive flock depopulation during the month.

Average weekly production for Certified Organic eggs in December 2024 was down 0.6 percent compared to November 2024 with a questionably high average weekly production of 83.8 percent. Average weekly flock production for cage-free flocks other than Certified Organic was down 4.8 percent in December 2024, but with a high average hen-month production of 82.6 percent, up from 82.2 percent. Seasonally, younger flocks increase the availability of cage-free and organic eggs in response to pullet chick placements 20 weeks previously especially in anticipation of periods of peak seasonal demand. 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 validate the relative sizes of flocks producing under the certified organic label or other categories. There is no adequate explanation for the high production rate especially if the reported number of hens is lower than actual, and in view of a possible undercount following HPAI flock depopulation.

Negotiated nest-run grade-ready cage-free price for December 2024 averaged $5.91 per dozen, up 98.3 percent from $2.98 per dozen in November 2024, reflecting higher demand relative to supply. The December 2024 advertised U.S. featured retail price for cage-free eggs over five regions (excluding SW, AK. and HI.) was $2.90 per dozen, apparently unchanged from November 2024 based on 1,027 stores. This compares with 652 stores in November and reflects pre-Christmas loss-leaders although there were fewer promotions as the year progressed due to seasonal emergence of HPAI.

The recorded average wholesale price of $5.91 per dozen plus a provision of 60 cents per dozen for packaging, packing and transport, results in a price of $6.51 per dozen delivered to CDs. The average five-region advertised retail price of $2.90 per dozen corresponds to a theoretical average retail negative margin of 124.5 percent (-48.7 percent last month unless prices were raised) over the average wholesale delivered price denoting “loss leaders” among stores featuring cage free eggs. Margins are presumed higher for non-featured eggs including pastured and other specialty eggs at shelf prices reaching $9.00 per dozen in high-end supermarket chains. Retailers maximizing margins especially on Certified Organic, free-range and pastured categories restrict the volume of sales, ultimately disadvantageous to producers.

Additional details on production volumes and pricing are included in the review of USDA statistics accompanying this update.

Regular editions of EGG-NEWS and CHICK-NEWS will suspend publication at the beginning of 2025. This reality after twelve years of operation is a personal decision to create opportunities for new challenges.

It is hoped that the commentaries, news, editorials and statistical reviews have educated subscribers and readers and stimulated thought and discussion. If the interests of the industry and the wellbeing of their companies and operations have been advanced then the enterprise and efforts have been worthwhile.

Gratitude is extended to sponsors who have made the newsletters possible and provided encouragement over the years. They are all worthy of continued support through their equipment, products and services.

In coming months EGG-NEWS and CHICK-NEWS will circulate focus editions based on innovative products and technology in written and alternative formats to continue the tradition of independent reporting, commentary and advocacy.

The U.S. Food and Drug Administration (FDA) has revised the requirements to claim that a food product is “healthy”.  The FDA office of Nutrition and Food Labeling announced the revision, the first in three decades, at a briefing on December 19^th.  The new requirements will allow foods including eggs to qualify as “healthy” on labels in accordance with the 2025 Dietary Guidelines for Americans.  The foods must meet limits for added sugars, saturated fat and sodium.  Foods should have no added unapproved ingredients to qualify for the “healthy” claim that will encompass vegetables, fruit, whole grains, seafood, eggs, pulses and nuts.

The new definition of “healthy” will allow the egg industry to claim this status, an opportunity to be promoted by the American Egg Board.

The AEB issued a statement confirming the extensive literature supporting the nutritional value of eggs with balanced amino acid content and a source choline especially beneficial for infants, toddler and pregnant and lactating women”.  Eggs are a unique contributor of dietary lutein, especially required by middle aged and elderly consumers to support prolonged integrity of vision.

Hendrix-ISA LLC the distributor of Hendrix Genetics has entered into an agreement with Respeggt to introduce in-ovo gender determination.  The system involves abstraction of allantoic fluid from embryonated eggs for hormonal analysis to enable differentiation between eggs bearing male or female embryos from the eighth day of incubation.  The system can differentiate between male and female embryos in either white or brown-feathered strains.  Equipment will be installed in a Hendrix-ISA hatchery in Nebraska during the first quarter of 2025.  Neal Martin, GM of Hendrix-ISA stated, “Our decision is based on the outstanding results that Respeggt has achieved for years in Europe, particularly with the Dekalb White strain.”

During the spring of 2025, Hendrix-ISA will supply MPS Egg Farms with Dekalb White strain pullets for the Kipster Farm eliminating the need to rear male chicks hatched concurrently with pullets.

The December 20^th edition of EGG-NEWS reported on initiation of in-ovo sexing by Hy-Line North America using the Cheggy System.  This applies hyperspectral illumination to enable separation of male and female embryos by feather color but therefore applicable to brown-feathered strains only.

Andres Manuel Lopez Obrador, then President of Mexico, issued a decree in 2020 banning the use of GM corn in food and initiated a program to eliminate GM corn from animal feed.  Based on the fact that there was no scientific justification for this action that is also contrary to the rules of the USMCA, the U.S. established a dispute panel under Chapter 31 of the Agreement.  This action was taken after failure to achieve a resolution through negotiation. 

On December 20^th the USTR, Ambassador Catherine Tai announced that the dispute panel had granted the request by USDA to declare the action by Mexico a violation of the USMCA. This decision confirmed that the Decree was not based on sound science and would restrict market access of U.S. corn tino Mexico.

U.S. Secretary of Agriculture Tom Vilsack noted, “We commend the dispute settlement panel for its thorough and impartial assessment which affirms that the approach of Mexico to biotechnology was not based on scientific principles or international standards.  The measures taken by Mexico ran counter to decades of evidence demonstrating the safety of agricultural biotechnology underpinned by science and risk-based regulatory review.”

Ambassador Doug McKalip noted, “The panel’s conclusion backs up our long-held position that agricultural trade policies must be grounded in science and must not disrupt trade and agriculture.”  He added, “This ruling is a critical step in ensuring the U.S. farmers can continue to compete fairly in the global marketplace.”

According to Expana a market research company, benchmark Midwest Large eggs attained $5.47 per dozen on Tuesday December 17^th, exceeding the previous record of $5.46 set during the corresponding week in December 2022. 

High prices are attributed to seasonal demand with the reality of reduced supply due to depopulation of 31 million hens in 2024 and with 17 million over the past two months.

The Wisconsin Department of Health Services has diagnosed a case of H5N1 avian influenza in a worker in contact with infected poultry in Barron County.  The diagnosis is undergoing confirmation at the Centers for Disease Control and Prevention (CDC).

The Department of Health Services of the state is monitoring farm workers potentially exposed to avian influenza.  It is presumed that the patient was infected depopulating a commercial turkey breeder flock on December 13^th.  No information was provided concerning the condition of the patient and it is presumed that symptoms were confined to conjunctivitis and possibly mild respiratory involvement.

The mild case in Iowa was acquired depopulating an infected layer complex in Sioux county. According to the Iowa Department of Health and Human Services, the provisional diagnosis of H5N1 conjunctivitis was confirmed by the CDC. 

Given that U.S. origin H5 vaccine is available and deployed in Finland, it is time that public health authorities gave consideration to preemptive vaccination of workers on dairy and poultry farms and especially those involved in depopulation of flocks infected with H5N1.  It is evident that PPE is not absolutely protective and vaccination would be a valuable adjunct to respirators and goggles.

On December 18^th Governor Gavin Newsom issued a Proclamation of a State of Emergency relating to extensive outbreaks of H5N1 avian influenza in poultry flocks and dairy herds within the state accompanied by infection of farm workers.

The gravity of the situation is evidenced by over 675 and  dairy herds confirmed with bovine inflluenza-H5N1 from August 30^th through December 15^th.

The state has lost in excess of 4 million hens in the spring and fall waves of avian influenza in cluding numerous broiler, duck and turkey flocks under the Pacific Flyway

Recognizing the gravity of the HPAI situation in the state, the State of Emergency requires: -

• The Office of Emergency Services to implement a state emergency plan to combat HPAI, requiring compliance by all residents of the state with the directions of emergency officials.
• Acquisition of PPE to be expedited and resources mobilized requiring suspension of certain provisions of the Government Code and the Public Contract Code.
• Relaxation of conditions of employment of personnel including work hour limitations to combat HPAI. Restrictions on hours of employment will be suspended to increase availability of manpower during the State of Emergency.

Since August, France has recorded 12 contained outbreaks of Highly Pathogenic Avian Influenza.  Surveillance has been lifted Nationwide since there have been no incident cases for five consecutive weeks. France has returned to freedom from avian influenza attributed to the introduction of a vaccination program.

Minister of Agriculture, Annie Genevard, stated, “Good news for our poultry sector, enabled by the vaccination strategy implemented since October 2023 and will be continued in 2025.”

The foie gras subsector of the poultry industry in France was the most affected with HPAI in 2022 since ducks and geese allowed outside access were susceptible to infection by migratory waterfowl.

The situation in France contrasts to Eastern Europe that is recording outbreaks in both backyard and commercial farms, attesting to the inability of a stamping out of individual cases to effectively control infection.  Given the seasonal reintroduction of H5N1 and possibly other H5 strains by marine and migratory waterfowl, it is necessary to create immunity among populations of commercial flocks that are concentrated in areas conforming to flyways.

The USDA Animal and Plant Health Inspection Service has issued a notice to biologics manufacturers requesting information on the efficacy of vaccines against intestinal colonization with Salmonella. The Agency has proposed studies on the application of live vaccines that could be used against designated Salmonella serotypes.  This is of specific importance with respect to contamination of raw chicken carcasses, parts and ground turkey.

The request for information from vaccine manufacturers by the FSIS is reminiscent of the approach adopted by FDA in establishing the Final Rule on Salmonella in Eggs during 2010.  Six months after the Rule was published in the Federal Register, individuals within the Agency were initiating informal conversations with poultry health professionals on the use of Salmonella vaccines.  It was an established practice within the U.S. and E.U. egg industries over a number of years prior to the Rule to administer gene-deleted live attenuated Salmonella Typhimurium vaccines early during the rearing period with administration of inactivated Salmonella Enteritidis emulsion vaccine prior to transfer to laying units.

The FSIS should determine the efficacy of live attenuated Salmonella vaccines in the pre-harvest prevention of a Salmonella contamination of carcasses and parts before finalizing the Salmonella Framework For Raw Poultry Products.  At this stage, the FSIS is still requesting comments with a closure date of January 17, 2025.  The Agency has not indicated how producers will screen flocks for the designated Salmonella serotypes, nor has it indicated what measures are practical to suppress pre-harvest Salmonella infection.

The proposed Salmonella Framework for all poultry products has the potential to disrupt the industry and markedly increase costs. These will be passed on to consumers without having quantified efficacy of suggested measures or benefits through a reduced incidence of chicken and turkey-derived salmonellosis. At the very least a pilot study is indicated.

On December 19^th Darden Restaurants Inc. (DRI) posted the results for the second quarter of fiscal 2025 ending November 24^th beating consensus estimates on the top and bottom lines. Darden Restaurants is a bellwether for both casual and fine dining, with the Company and competitors confronted with problems of reduced discretionary spending, availability and cost of labor and continued high prices for food ingredients.

For the most recent quarter, Darden earned $215 million on revenue of $2,890 million with an EPS of $1.82.  Comparative values for the second quarter of fiscal 2024 were net earnings of $212 million on revenue of $2,449 million with an EPS of $1.76.  Comparing the second quarter of 2025 with the corresponding quarter of previous fiscal year, revenue was up by 6.0 percent. Operating margin was down by 0.1 percent to 10.1 percent and profit margin down by 0.4 percent to 7.4 percent.

The Company reported the following sales and segment contributions:-

On November 24^th Darden Restaurants operated 2,152 locations including 925 Olive Garden locations, 580 LongHorn Steakhouses, 82 newly acquired Ruth’s Chris Steakhouses and 104 Chuy’s restaurants with 461 other units including both casual and fine dining restaurants under six brands. 

For the quarter, Darden posted a composite 2.4 percent increase in same restaurant sales with the fine dining group posting a 5.8 percent decline, offset by a 2.0 percent gain by the Olive Garden and 7.5 percent by LongHorn.

In commenting on performance, Rick Cardenas, president & CEO stated, "We had a strong quarter and I am pleased that our four largest brands – Olive Garden, LongHorn Steakhouse, Yard House and Cheddar's Scratch Kitchen – generated positive same-restaurant sales, as did three of our four business segments," He added, "I continue to believe in the power of our strategy and our brands' ability to compete effectively regardless of the environment. Each of our brand leadership teams are focused on the long term and staying committed to executing at the highest level."

The Company increased guidance for FY 2025 with projected revenue of $12,100 million, a same-restaurant sales growth of 1.5 percent and diluted EPS in the range of $9.40 to $9.60.

Darden Restaurants posted total assets of $12,519 million of which $3,000 million comprised goodwill and trademarks.  The company carries long-term debt and lease obligations of $7,756 million.  Darden Restaurants had an intraday market capitalization of $22,040 million on December 23^rd.  The company has traded over the past fifty-two weeks in a range of $135.87 to $188.88 with a 50-day moving average of $166.50 and with a forward P/E of 19.8

Over the trailing twelve months, operating margin was 9.8 percent and profit margin 9.1 percent.  Return on assets was 7.4 percent and on equity 48.6 percent. 

Grubhub recently settled a civil action filed by the U.S. Federal Trade Commission and the Attorney General of Illinois.  At issue were serious allegations of unethical business practice including misrepresentation.  These involved: -

• Adding restaurants to the company platform without consent.
• Misleading delivery drivers over potential earnings.
• Imposing hidden fees and other unethical and unfair practices.

Grub Hub settled for $25 million compared to the original $140 million judgment against the company.  The reduction was based on the inability of Grub Hub to pay the higher penalty, although this may be reviewed following evaluation of the financial position of the Company.  Allegations raised by the FTC were challenged by Grubhub as being “misleading” or alternatively no longer applicable to their business model.