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EGG‑NEWS.com
Egg Industry News, Comments & More by
Simon M.Shane
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Egg Industry Statistics and Reports
Commodity Report
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10/18/2024 |
WEEKLY ECONOMY, COMMODITY & ENERGY REPORT: October 18th 2024.
OVERVIEW
The prices for corn and soybeans were appreciably lower over the past week. Soybeans were down 3.6 and corn down 3.8 percent. Corn and soybean prices were influenced by uncertainty over yields in Brazil and Argentine; minimal response to the October WASDE Report and by farmers selling to avoid further declines and to make room for the approaching 2024 harvest continuing in strength this week. There was some technical selling arising from geopolitical concerns and in response to revised projections for harvests in Brazil and Argentine. Contributory pricing factors included ongoing disruption in shipping in the Red Sea and Panama Canal, carryover from the 2023 U.S. crop, export orders and the predicted ending stocks of corn and soybeans from the 2024 crop. Half of the 2024 corn crop is “in the bin”. Concurrently two thirds of the soybean crop has been harvested, in advance of the five-year average and apparently with superior crop condition compared to 2023. The transition from a neutral phase to a La Nina event has commenced and will intensify during the fourth quarter but will not affect the 2024 harvest. The October WASDE, incorporating the September remote USDA Survey together with the Pro Farmer August field evaluations should provide updated projections of yields, with USDA updates for anticipated exports and adjusted prices for the 2024 crop.
At 12H00 EDT on October 17th the CME corn quotation for December delivery was down 3.8 percent to 404 cents per bushel. Corn price was influenced by acreage planted, ethanol demand and the ending stock from the 2023 crop. Farm selling has increased, given the need to make room for the new crop. USDA estimated that 44 percent of old corn stock was held on farms at the beginning of September. Export orders for the current market year have increased in response to lower prices. Volumes and price are indirectly influenced by wheat availability as influenced by weather affecting the Black Sea wheat and corn crops and events in the Red Sea. Orders by China resumed at the end of the 2022-2023 market-year and continued through August, despite an increase in the Dollar Index, adding to increased ocean freight. Total exports for the new 2024-2025 market year are 24.2 percent above the first five weeks of the 2023-2024 year.
Soybeans were priced at 978 cents per bushel for November 2024 delivery, falling below the 1,000-cent psychological threshold. Price was down 3.6 percent compared to 1,015 cents per bushel last week for November delivery. Lower prices were attributed to the projection of ending stock, despite farm selling and taking into account recent export orders and projections of availability from the 2024 U.S., Brazil and Argentine harvests. Total exports for the 2024-2025 market year are 0.4 percent higher than for the corresponding first five weeks of market year 2023-2024.
Soybean meal was priced at $317 per ton for December delivery, down $2 per ton (-0.6 percent) from last week. Price is influenced by demand coupled with a reestablished crush volume in September restoring the processing trend during the first half of 2024. Price will fluctuate to reflect the CME price for soybeans and the depressed demand for biodiesel due to oversupply and the consequential adverse financial situation in this sector. The market previously responded to the increased 2023 crop and higher stocks together with projections for 2024 in the revised October WASDE Reports updated from September.
On October 17th at 12H00 EDT the price for WTI was $70.29 down $4.11 (-5.5 percent) from last week. The current price does not reflect the aftermath of Hurricane Milton. It is estimated that 3.5 percent of Gulf crude production and one percent of natural gas recovery were “shut in” (negatively impacted) from the previous Hurricane Helene although production was restored by last week. Current price is not materially affected by uncertainties and tensions in the Middle East but excluding possible retaliatory action as announced by Israel on Iranian oil installations. Over the longer term price reflects moderate world demand for crude as economies and especially that of China have retracted requiring central bank stimulation in late August. It is evident that U.S. production is a moderating influence on World price, attaining a record average of 13.4 million barrels per day in July with ample reserves. There was a downward trend in the price of WTI through October 17th with the range during the week extending from $75.72 on October 10th down to $70.26 on October 15th.
Ample U.S. crude production is constraining domestic and international prices. The recent decline in energy costs during the past two months contributed to deflation influencing the FOMC in their decision to lower the benchmark interest rate at the September meeting.
Economic data released during the past quarter (Q2 GDP; PCE, Confidence, Productivity, Employment) confirm a growing economy but with a downward trajectory in inflation. Second Quarter GDP was revised upward to 3.0 percent from the previous projection of 2.8 percent. The data-driven Federal Reserve FOMC lowered the benchmark interest rate by 50 basis points on September 18th. Federal Reserve Chair Jerome Powell and Reserve Bank Governors indicated one or two additional reductions in the 10-year rate during 2024. The August and September Non-farm Payrolls and labor data clearly indicated the danger of prolonging the high benchmark interest rate that was negatively impacting the U.S. economy.
Macroeconomic U.S. factors:-
- Most economists in academia and the private sector are still confident of a “soft landing” for the economy despite the release of the Q2 2024 increase in GDP to 3.0 percent and coupled with recent economic parameters including the ECI, CPI and PPI. Annual inflation as measured by CPI declined from 8.9 percent in June 2022 to 2.5 percent in August 2024. This is in part a response to a series of 11 FOMC rate raises followed by eight pauses that curbed inflation and cooled the labor market but without precipitating evident unemployment. There is obvious stability in the bank sectors in both the U.S. and Europe. Lower energy prices are contributing to deflation.
- The Federal Reserve lowered the benchmark interest rate by 0.5 percent at the monthly FOMC meeting on September 18th, the first of a series of actions after eighth sequential pauses. The Federal Reserve commentary indicated that progress has been made in reducing the rate of inflation with subsequent reductions of 25 basis points at the two remaining meetings in 2024 and extending into 2025. Chairman Powell in Congressional testimony, and at the post-meeting press conference and also documented in FOMC minutes indicated that decisions would be based on demonstrated progress in reducing inflation as confirmed by a basket of key economic data, towards an annual 2.0 percent target by mid-2025. This now appears feasible.
- The September 26th release by the Bureau of Economic Affairs documented the third estimate of Q2 2024 GDP of 3.0 percent unchanged from the previous estimate but above the Q1 value of 1.4 percent. The latest estimate of the Q2 GDP was influenced by higher consumer spending.
- The October 10th release of the Consumer Price Index (CPI) for September showed a 0.2 percent rise over August and an annual rise of 2.4 percent. The monthly value is compared to an anticipated 0.1 percent. Core CPI (excluding food and fuel) was up 0.3 percent in September with an annual increase of 3.3 percent. Food increased 0.4 percent with eggs highlighted at 8.4 percent and chicken up 0.7 percent. For September shelter was up 0.2 percent. Notwithstanding the unexpected increase in CPI during September additional reductions in benchmark interest rates are anticipated during this quarter.
- On September 27th the Bureau of Economic Analysis released the September Personal Consumption and Expenditure Price Index. The core PCE (excluding food and energy) was up 0.1 percent from the previous month, below a 0.2 percent estimate and attained 2.7 percent year-over-year and compared to a consensus of 2.3 percent. The Headline PCE was up 0.1 percent from August and 2.2 percent from August 2023. Food was up 0.1 percent from August and 1.1 percent from August 2023.. The headline PCE is closely followed by the Federal Reserve and confirms that inflation is progressively moderating but still above an annual target of 2.0 percent.
- The September Producer Price Index for Final Demand (PPI) released on October 11th was unchanged from August against an expectation of a 0.2 percent rise. This was attributed in part to a 0.2 percent increase in services and a 1.0 percent increase in food. The PPI was up 1.8 percent over the past 12-months ending in September compared with 1.9 percent for the 12-month period through August. This is compared to a 6.4 percent increase in 2022. The core PPI value excluding volatile fuel and food, was up 0.2 percent from August and 2.8 percent over the previous 12 months.
- A Federal Reserve release on September 17th confirmed that industrial production was higher by 0.9 percent in August compared to a decrease of 0.6 percent in July. Capacity utilization was higher at 77.2 percent and 1.1 percent below the long run 1972-2020 average.
- The September 26th report by the Department of Commerce, Census Bureau on Durable Goods Ordered during August 2024 showed no change from July compared to a forecast fractional decline. August sales should be viewed against the 9.9 percent increase in July attributed to the Transportation segment and specifically aircraft orders and parts that were up 34.6 percent. Excluding the Transportation component, new orders in August increased by 0.5 percent compared to a decrease of 0.3 percent in July. Shipments of durable goods in the non-defense category were up 0.1 percent in August from the previous month ultimately to be reflected in the quarterly GDP.
- In an October 3rd release the Census Bureau confirmed that factory orders for U.S. manufactured goods fell 0.2 percent in August against an estimate of no change and compared to a revised rise of 4.9 percent in July.
- The September 15thS. Census Bureau release of the advanced estimate of retail and food sales data for August was up 0.1 percent from the revised July value and up 2.1 percent over 12 months. Food service sales were unchanged from July and up 2.7 percent over 12 months. Grocery store sales were down 0.6 percent from the revised July value and up 1.5 percent over the past 12-months. The Federal Reserve FOMC closely monitors retail sales as a measure of the trend in inflation.
- The October 1st release by the Institute for Supply Management (ISM®) reported an unchanged Manufacturing Index for September at 47.2 against an expected value of 47.5. The September value was still below the bifurcation point of 50 percent between contraction and expansion. The Prices Index fell by 5.7 points to 49.8 in September, denoting lower costs for production. U.S manufacturing does not currently reflect an improved economy, and manufacturing has yet to recover from prolonged high benchmark interest rates. The Production Index for September was up 5.0 points from 44.8 in August to 49.8 in September.
- On July 31st the U.S. Bureau of Labor Statistics reported a 0.9 percent increase in the Employment Cost Index (ECI) over the 2nd quarter of 2024 against a consensus estimate of 1.0 percent. The year-over-year increase was 4.1 percent and with benefit costs up by 3.8 percent. The July ECI of 0.9 percent compares with a value of 0.9 percent for the 4th quarter of 2023. The ECI is closely followed by the Federal Reserve FOMC and this data justified in part the 50 basis point drop in the benchmark interest rate in September and strengthens the possibility of additional rate cuts in the 4th quarter as suggested by Federal Reserve Chairman Powell.
- The September 24th Consumer Confidence report prepared by The Conference Board for the period ending September 17th, confirmed a substantial decrease to 98.7 from the revised August value of 105.6, with all segments down, representing the largest decline since September 2021. The Present Situation Index measuring perceptions of current business conditions fell to 124.3 from 133.4 in August. The Expectations Index fell from a revised August value of 86.3 to 81.7 but the third consecutive month above 80. Values below this threshold over consecutive months and with a downward trajectory are regarded as predictive of a recession.
- The October 11th University of Michigan Index of Consumer Sentiment for October fell to 68.9 from a revised September value of 70.1. The Current Economic Index was 62.7 in October down from 63.3 in September. The Index of Consumer Expectations was 72.9 down from 74.4 in September, denoting deterioration in consumer sentiment despite the September rate cut and lower inflation. Geopolitical factors and uncertainty over the upcoming election have adversely influenced sentiment. In perspective sentiment is up 8 percent above September 2023 and 40 percent above the low in June 2022.
- Non-farm payrolls added an unanticipated high 254,000 in September, as documented by the Bureau of Labor Statistics in an October 4th This was higher than the anticipated 140,000, and should be compared to the upwardly revised August value of 159,000.. The unemployment rate fell to 4.1 from 4.2 percent with 6.8 million unemployed and with 1.6 million in the long-term category. Real average hourly earnings during September showed a 0.4 percent increase over August to $35.36. Average hours worked in manufacturing declined fractionally to 33.7 hours per week. Labor participation was unchanged at 62.7 percent from August. Wage rates increased 4.0 percent over 12-months. Wage rates are closely followed by the Federal Reserve FOMC.
- The August 21st preliminary revision of job growth by the Bureau of Labor Statistics based on state data suggested that 818,000 fewer jobs were actually created from April 2023 through March 2024 than previously estimated. The discrepancy represented an apparent overstatement of 68,00 new jobs per month on average. Less than half of the overestimate was in the Professional and Business category (358,000); Leisure and Hospitality, (150,000) and Manufacturing (115,000). The preliminary revision that has mainly political implications should increase the magnitude of the reduction in benchmark rate at the September FOMC Meeting.
- The Bureau of Labor Statistics Job Openings and Labor Survey report (“JOLTS) released on October 1st estimated 8.04 million job openings at the end of August unexpectedly above a forecast of 7.68 million and higher than the revised July value of 7.71. The August job openings number should be compared with August 2023 at 7.51 million and the peak March 2022 value of 12.2 million job openings during COVID. The hiring rate was 3.3 percent (5.3 million hires); the August total separation rate, 3.1 percent (5.0 million); the quit rate 1.9 percent (3.1 million); and the layoff rate 1.0 percent, (1.6 million).
- The seasonally adjusted initial jobless claims figure of 241,000 released on October 17th for the week ending October 12th was down by an unexpected 19,000 from the revised value of 260,000 for the previous week. The weekly value was lower than the Reuters estimate of 262,000. The four-week moving average rose 4,750 to 236,250. The Bureau of Labor Statistics estimated 1.867 million continuing claims for the week ending October 5th (up 9,000 from the revised value for last week), compared to a peak on November 27th 2021 at 1.928 million. The September unemployment rate remained at 4.2 percent. There is clear evidence from data over the past three months that the labor market is cooling as confirmed by Chairman Powell in Congressional testimony and release of downward revised figures for job creation. The jobs market is still tight, but with sporadic weekly fluctuation in new claims due to weather, strikes or scheduled plant shutdowns. Reports in future weeks will be distorted by the effects of Hurricanes Helene and Milton and the strike by Boeing machinists.
- The September 5th Bureau of Labor Statistics report recorded a 2.5 percent increase in non-Farm Productivity for Q2 2024 up from 0.4 percent in Q1 2024. Labor cost increased by 0.9 percent compared to 4.0 percent for Q1 2024. Output was up by 3.5 percent and hours worked were 1.0 percent higher.
- The ADP® reported on October 2nd that private (excluding government data) payrolls increased by 143,000 in September, up 40,000 from the revised 103,000 in August and compared to the Dow Jones estimate of 120,500 jobs. The increase in employment was mostly in the Transportation, Trade and Utilities sector, (+14,000); Construction, (+26,000); Hospitality, (43,000); and Professional and Business Services, (+20,000); Professional and Business Services, (+16,000). The Information sector was down (-10,000). Annual pay was up 4.7 percent year-over-year for ‘job-stayers’, down 0.1 percent from August 2023. The increase as reported by ADP will not directly influence the probability of short-term future changes in interest rate since the number, although based on 25 million positions, excludes the public sector. Monthly ADP data is regarded as less reliable by the FOMC than the Bureau of Labor Statistics Monthly non-farm payroll report.
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USDA-WASDE REPORT #653, October 11th 2024
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10/11/2024 |
OVERVIEW
The USDA provided updated projections for the production of corn and soybeans in the October 11thWorld Agriculture Supply and Demand Estimates (WASDE) #653, reflecting the anticipated 2024 crop. Production values for corn and soybeans were updated from the August edition and are based on actual field data. Projections of crop size and ending stocks are derived from acreage planted, estimates of yields, data from the harvest in progress, carry-forward levels from 2023, and with the latest assumptions relating to domestic use and exports.
The October 11th WASDE report predicted that corn would be harvested from 82.7 million acres, unchanged from the September projection. The soybean crop will be harvested from 86.3 million acres, unchanged from the September report.
The October WASDE increased the yield value for the 2024 corn crop by 0.1 percent to 183.8 bushels per acre. By comparison yield was 174.9 bushels per acre in 2023. The October projection of soybean yield was lowered by 0.2 percent to 53.1 bushels per acre compared to 49.9 bushels per acre in 2023.
The October USDA projection for the ending stocks of corn was down 2.8 percent to 1,999 million bushels. The October USDA projection for the ending stock of soybeans was unchanged at 550 million bushels.
The October 2024 WASDE held the projection of corn price at 410 cents per bushel. The projected average season price for soybeans was held at 1,080 cents per bushel. The price of soybean meal was unchanged at $320 per ton. Projected commodity prices suggest stable to lower feed costs for livestock and poultry producers. Row crop farmers will experience lower margins or in some areas corn will be below break-even given relative production costs and per bushel price. This situation has contributed to an impasse in the decisions of the respective House and Senate Agriculture Committees regarding allocation of funding for the combination of nutrition support and conservation over farm commodity price supports in the delayed Farm Bill.
Projections for world output included in the September 2024 WASDE report, reflect the most recent estimates for the production and export of commodities especially in the Southern Hemisphere with an emphasis on Argentine and Brazil. Economists also evaluated the likely impacts from a transition to a La Nina event especially on South America. Hostilities are ongoing in Ukraine following extensive destruction of agricultural infrastructure by the Russian Federation. It is evident that production and hence exports of wheat, corn and sunflower from Ukraine will be reduced compared to pre-war averages.
It is accepted that USDA projections for export are also based on the perceived intentions and needs of China. This Nation has sharply curtailed purchases of commodities and especially U.S. soybeans during the current market year despite a projected recovery of the Nation’s economy influencing consumer demand for food and fuel.
Reports on volumes of commodities exported are included in weekly editions of EGG-NEWS, derived from USDA-FAS sales data. Weekly Crop Progress reports will be posted through late November
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Egg Month
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10/10/2024 |
REVIEW OF SEPTEMBER 2024 EGG PRODUCTION COSTS AND STATISTICS.
Commencing in January 2024 the EIC justifiably separated the production costs and unit revenue values for eggs derived from caged and cage-free flocks. Accordingly, EGG-NEWS will continue to summarize data but will consolidate production and export statistics for the U.S. egg industry as a total and compare financial data for the two shell-egg categories.
SEPTEMBER HIGHLIGHTS
- September 2024 USDA ex-farm blended USDA nest-run, benchmark price for conventional eggs from caged hens was 240 cents per dozen, down 93 cents per dozen or 27.9 percent from the August 2024 value of 333 cents per dozen. For comparison, average monthly USDA benchmark price over 2023 was 146.0 cents per dozen with a range of 323 cents per dozen in January down to a low of 57 cents in May. 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 will not be a consideration until the fall 2024 migration of waterfowl resumes. Close to 13 million hens and 2.5 million pullets were depopulated during the fourth quarter of 2023 among five states with heavy losses in California. Approximately 17 million hens and 1.5 million pullets have been depleted year to date.
- September 2024 USDA average nest-run production cost for conventional eggs from caged flocks over four regions (excluding SW and West), applying updated inputs was up 1.2 cents per dozen to 74.6 cents per dozen compared to the USDA revised August 2024 value of 73.4 cents per dozen, mainly attributable to a 6.6 percent higher average feed cost per dozen. Approximately 60 cents per dozen should be added to the USDA benchmark nest-run cost to cover processing, packing material and transport to establish a realistic price as delivered to warehouses.
- September 2024 USDA benchmark nest-run margin for conventional eggs attained a positive value of 165.4 cents per dozen compared to a revised positive margin of 258.0 cents per dozen in August 2024. Average nest-run monthly margin over 2023 was 64.2 cents per dozen compared to 155 cents per dozen in 2022. This differential was mainly due to higher prices following HPAI-depletion of flocks. It is emphasized that the U.S. benchmark price reflects nest-run conventional eggs.
- The August 2024 national flock in production (over 30,000 hens per farm) was stated by the USDA to be down 0.6 million hens (rounded) to 289.3 compared to the revised July 2024 value of 288.4 million. Approximately 3.0 million hens returned to production from molt in August together with projected maturation of 21.5 million pullets, with this number offset by depletion of an unknown number of spent hens.
- August 2024 pullet chick hatch of 28.7 million was up 0.7 percent or 0.2 million chicks from July 2024.
- August 2024 exports of shell eggs and products combined were up 2.5 percent from July 2024 to 445,500 case equivalents representing the theoretical production of 5.9 million hens. The moderate increase was due to higher imports of shell eggs by Canada and egg products by Caribbean, South American and E.U nations based on need and price.
TABLES SHOWING KEY PARAMETERS FOR SEPTEMBER 2024.
Summary tables for the latest USDA September 2024 flock statistics, costs and unit prices made available by the EIC on October 9th 2024 are arranged, summarized, tabulated and compared with values from the previous August 9th 2024 release reflecting September 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
PARAMETER
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SEPTEMBER 2024
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AUGUST 2024
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Table-strain eggs in incubators
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52.0 million (Sept.)
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54.7 million* (Aug.)
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Pullet chicks hatched
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28.7 million (Aug.)
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28.9 million* (July)
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Pullets to be housed 5 months after hatch
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25.9 million (Jan.)
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26.0 million* (Dec)
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EIC 2023 December 1st U.S. total flock projection
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321.6 (Oct.)
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324.2 million (Sept.)
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National Flock in farms over 30,000
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289.3 million (Aug.)
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288.4* million (July)
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National egg-producing flock
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305.0 million (Aug.)
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304.1* million (July)
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Cage-free flock excluding organic
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106.9 million (Sept.)
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104.0 million (Aug.)
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Proportion of flocks in molt or post-molt
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11.6% (Sept.)
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11.7%* (Aug.)
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Total of hens in National flock, 1st cycle (estimate)
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269.6 million (Aug.)
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288.5* million (July)
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*USDA Revised
Total U.S. Eggs produced (billion)
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7.77 September 2024
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7.75* August 2024
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Total Cage-Free hens in production
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127.7 million (Sept.)
16.3% Organic
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123.6 million (Aug.)
15.8% Organic
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“Top-5” States hen population (USDA)1
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150.1 million (August)
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148.9* million (July)
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* Revised USDA/EIC Note 1. Texas excluded to maintain confidentiality
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Egg Week
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10/09/2024 |
USDA Weekly Egg Price and Inventory Report, October 9th 2024.
Market Overview
- The average wholesale unit revenue values for Midwest Extra-large and Large sizes were unchanged on average this past week. Medium size was up 0.5 percent. The 5-day rolling National wholesale price for graded loose on October 7th was $1.65 per dozen up 8.5 percent from last week. This value was approximately $0.40 below the 3-year average of $1.25 per dozen and up $0.80 from the corresponding week in 2023 at $0.85 per dozen. This past week shell egg inventory was down 1.9 percent, following a drop of 0.9 percent during the previous week. During the past week the NYC wholesale price stabilized indicating a market plateau with the immediate prospect of an increase through the weekend. Small fluctuations in inventory with a stable price following successive weekly decreases in price entering fall suggests lower margins for producers through the 4th quarter as depleted flocks are replaced. Relatively higher prices compared to 2023 are attributed to losses due to HPAI depletion in 2024 reducing the national flock by 17 million hens despite reduced seasonal demand.
- Although there are weekly transfers of mature pullet flocks to laying houses, the size of the producing flock is constrained by depopulation due to HPAI. During April 2024 almost 8.4 million hens were depopulated with an additional 5.7 million during May and 3.0 million in July with a current deficit of 17 million hens compared to the 2022 flock of 326 million at the onset of HPAI.
- This past week, chains apparently widened the spread between delivered cost and shelf price. The cessation of incident cases of HPAI has probably provided buyers with the confidence to hold orders and run down stock to attempt to “bend” the benchmark price discovery index. Inventory levels will depend on constant re-ordering to fill the pipeline through mid-October. Discounters are holding prices on generics influencing mainstream retail stores. Eggs are still highly competitive in price against the comparable costs for other protein foods, but highlighted as a factor in food price inflation.
- Total industry inventory was down by 1.6 percent overall this past week at 1.55 million cases with a concurrent 0.5 percent decrease in breaking stock, following a 10.6 percent fall during the preceding week attributed to increased demand.
- It is apparent that the inventory held by chains and other significant distributors may be more important on a weekly basis in establishing wholesale price compared to the USDA regional inventory figures. Changes in stock held by DCs and in the pipeline as determined by weekly orders are probably responsible for up to three percent cyclic fluctuation in weekly industry stock, especially into and after a holiday weekend.
- The number and extent of possible HPAI outbreaks during coming months cannot be projected but the industry has moved into a quiescent period. Over 240 confirmed cases of bovine influenza-H5N1 in dairy herds in fourteen states and spreading in California is a cause for concern. More surveillance information should be released by USDA-APHIS as it becomes available, concerning the prevalence rate of avian carriers of H5N1 among resident domestic free-living birds together with a review of molecular and field epidemiology for the past spring outbreaks in anticipation of a predicted fall wave of HPAI. The USDA has yet to identify and release specific modes of transmission for the 2022-2024 epornitic including likely airborne spread from wild birds and their excreta over short distances as suggested by current research.
- The current relationship between producers and chain buyers based on a single commercial price discovery system constitutes an impediment to a free market. The benchmark price appears to amplify both downward and upward swings as evidenced over the past three years. A CME quotation based on Midwest Large, reflecting demand relative to supply would be more equitable. If feed cost is determined by CME ingredient prices then generic shell eggs should be subject to a Midwest Large quotation.
- On October 2nd the stated total flock of 308.5 million, was up by 0.4 million from last week, including about one million molted hens that will resume lay during coming weeks plus 4.5 to 5.0 million pullets scheduled to attain production. Given the latest figures for depopulation it is estimated that the total flock is approximately 17 million hens lower than the 326 million before the onset of HPAI in 2022.
- The ex-farm price for breaking stock (rounded to one cent) was up an insignificant 0.4 percent to $1.29 per dozen.Checks delivered to Midwest plants were up 4.4 percent to $1.18 per dozen this past week. Prices for breaking stock generally follow the wholesale price for shell eggs but with a lag of one to two weeks that may be shorter with a wide swing in price in either direction.
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Crop Progress
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10/07/2024 |
Status of 2024 Corn and Soybean Crops
The USDA Crop Progress Report released on October 7th recorded 90 percent of the soybean crop dropping leaves and 47 percent harvested, a major advance of 21 percent this past week. Eighty seven percent of the corn crop is now mature and 30 percent has been harvested, only three percent more than last week. Both crops were ahead of the 5-year averages for the corresponding week.
Days suitable for field-work attained 5.9 per week for the nine states with the highest corn and soybean production (range 4.0 days for PA. up to 6.8 days for KS.), allowing faster harvest in some states or areas. This compares with 4.7 days for last week.
Consistent with seasonal temperatures and previous rainfall across the Midwest and Plains states, crop condition was almost unchanged during the past week. Corn and soybeans attained 64 and 63 percent each for the two highest categories of “Good” and “Excellent.” The October 6th values for corn and soybean quality were considerably higher than the 53 and 51 percent recorded for corn and soybean crops respectively for the two highest categories during the corresponding week in 2023. Prospects for high yields were reflected in lower price projections in the September WASDE despite a more recent rise in CME future prices for November and December (‘new crop’) delivery, subsequent to the release of the report and uncertainty over the size of crops in South America due to drought.
It is unlikely that the transition to a La Nina event will have any impact on U.S. crop condition through harvest. Prolonged dry and hot weather apparent at this time interspersed with rain will not depress corn and soy yields depending on timing and severity.
Heat stress that occurred previously during silking predisposes corn to fungal infection leading to mycotoxin contamination of kernels. Unseasonal rain during the pre-harvest period for corn will also result in elaboration of mycotoxins. The status of the 2024 crop will require monitoring at harvest in affected areas and especially if unseasonal precipitation occurs during the pre-harvest period.
Reference is made to the September 13th WASDE Report #652 and the weekly Commodity, Economy and Energy Report, both in this edition, documenting acreage to be harvested, yields, weekly prices and ending stocks.
During October the USDA-NASS intends to report on the annual remote survey to estimate yields and final production, in all probability incorporated in WASDE #653 to be reviewed in the October 18th Edition of EGG-NEWS. Pro Farmer completed their annual crop tour in mid-August. The August 23rd report estimated a corn yield of 181.1 bushels per acre with a projected crop of 14.98 billion bushels. The corresponding values for soybeans were yield of 54.9 bushels per acre contributing to a 2024 crop of 4.74 billion bushels.
EGG-NEWS will report on the progress of the two major crops as monitored by the USDA through the end of the 2024 harvest in November.
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WEEK ENDING |
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Corn Status (18 states) *
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September 22th
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September 29nd
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5-Year Average
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Corn Dented (%) |
100 |
100 |
100 |
Corn Mature (%) |
75 |
87 |
81 |
Corn Harvested (%)
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21
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30
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27
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Soybean Status (18 states) |
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Soybeans Setting Pods (%) |
100
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100
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100
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Dropping Leaves (%) |
81 |
90 |
85 |
Soybeans Harvested |
26 |
47 |
35 |
*Representing an average of 95% of U.S. 2024 acreage planted |
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Crop Condition
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V. Poor |
Poor
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Fair
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Good |
Excellent |
Corn 2024 (%)
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5 |
8 |
23 |
49 |
15 |
Corn 2023 (%) |
6 |
12 |
29 |
44 |
9 |
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Soybeans 2024 (%)
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3 |
8 |
26 |
51 |
12 |
Soybeans 2023 (%) |
6 |
12 |
31 |
43 |
8 |
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Recent drought monitor with 'hot-spot' affecting SW PA and central OH
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USDA Data On Cage-Free Production For September 2024
|
10/01/2024 |
EGG-NEWS summarizes and comments on data and trends in the monthly USDA Cage-Free Report. This data is correlated and interpreted in the WeeklyEggPrice and Inventory Report posted on EGG-NEWS mailed on Fridays each week.
The USDA Cage-Free Report covering September 2024, released on October 1st 2024, documented the complement of hens producing under the Certified Organic Program to be 20.8 million (rounded to 0.1 million), up a questionable 1.2 million hens (6.5 percent) from August 2024. Depopulation was carried out in July 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 increased by 2.9 million hens or 2.7 percent from August 2024 to 106.9 million, despite previous flock depopulation and an unexpected high value in July. Hen numbers posted by the USDA for September are questioned as to accuracy taking into account chick placements and July depopulation figures released by APHIS.
The number of eggs collected is accepted as accurate but since the values for average hen-week production are unacceptably high this suggests that the denominator reflecting the number of hens is probably incorrect. Alternatively if conventional eggs from cages are deceptively marketed as cage-free, or if cage free eggs are packed as certified Organic, assuming an accurate number of hens over a given month, the apparent hen-week value would be disproportionally high. The respective numbers of hens claimed for organic and cage-free flocks should reflect the net contribution of chick placements 20-weeks previously, HPAI depopulation and age-related depletion and should correspond to monthly supply data and inventory extending over successive quarters. Unlike conventional cage production cage-free hens are not generally molted reducing this possible reason for error in calculating rates of production.
Average weekly production for Certified Organic eggs in September 2024 was up by 6.2 percent compared to August 2024 with a questionably high average weekly production of 83.6 percent. Average weekly flock production for cage-free flocks other than Certified Organic was up 2.5 percent in September 2024, but with a high average hen-month production of 82.4 percent, down from 82.6 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 assess 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, especially with undercounted HPAI flock depopulation.
Flock Size Average
(million hens)
|
September
2024
|
Average
Q3-2024
|
Average
Q2- 2024
|
Average
Q1 –
2024
|
Average
Q4 –
2023
|
Average
Q3-
2023
|
Certified Organic
|
20.8
|
20.0
|
18.8
|
18.3
|
18.7
|
18.7
|
Cage-Free Hens
|
106.9
|
103.9
|
101.0
|
105.7
|
106.4
|
105.4
|
Total Non-Caged
|
127.7
|
123.9
|
119.8
|
124.0
|
125.1
|
124.1
|
Average Weekly Production (cases)
|
August
2024
|
September
2024
|
Certified Organic @ 83.6% hen/day
|
319,073
|
338,938 +6.2%
|
Cage-Free @ 82.4% hen/day
|
1,670,460
|
1,712,778 +2.5%
|
Total Non-Caged @ 82.6% hen/day
|
1,989,533
|
2,051,716 +3.1%
|
Average Nest Run Contract Price Cage-Free Brown
|
$1.70/doz. (Unchanged since July 2024)
|
September 2024 Range:
|
$1.35 to $2.35/doz. (unchanged since March 2023)
|
FOB Negotiated September price, grade-ready quality, loose nest-run. Price range $1.65 to $3.15 per dozen
|
Average September 2024 Value of $2.08/doz.
($4.07/doz. August 2024)
|
Average September Advertised National Retail Price C-F, Large Brown
|
$3.23/doz. September 2024 (6 regions)
(was $2.83/doz. in August 2024)
|
USDA Based on 6 Regions, 659 stores
Excluding AK and HI.
|
High: $3.99/doz. (SW. 89 stores)
Low: $2.59/doz. (MW. 161 stores)
|
Negotiated nest-run grade-ready cage-free price for September 2024 averaged $2.08 per dozen, down by 49.0 percent from $4.07 per dozen in August 2024, reflecting presumably lower supply relative to demand. The September 2024 advertised U.S. retail price for cage-free eggs over six regions (excluding AK. and HI.) was $3.23 per dozen up 40 cents per dozen (14.1 percent) from August 2024 but based on only 659 stores. This compares with 4,484 stores in August confirming fewer promotions in September.
The recorded average wholesale price of $2.08 per dozen plus a provision of 60 cents per dozen for packaging, packing and transport, results in a price of $2.68 per dozen delivered to CDs. The average six-region advertised retail price of $3.23 corresponds to a theoretical average retail margin of 22.3 percent (-114 percent last month unless prices were increased) over the average wholesale delivered price. Margins are presumed higher for non-featured eggs and 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.
Based on the importance of cage-free production, now more than 40 percent of eggs produced, accurate and consistent figures are required. The USDA-AMS issues the Cage-Free report on volumes and prices at monthly intervals for the information of Industry stakeholders. There is obvious doubt as to the accuracy of individual monthly flock numbers in the monthly cage free reports especially with a marked change at the end of a quarter as with values for October 1st, or from the previous month without obvious cause, or alternatively when there is no change in the cage-free or organic flocks for sequential months.
It is suggested that USDA should consider a quarterly report with more accurate hen data. This would be more useful to the industry for planning and marketing decisions. Price data is available each week from other USDA reports.
Subscribers are referred to weekly USDA wholesale and retail prices posted in the Egg Price and Inventory Report in EGG-NEWS E-mailed each Friday. The previous Monthly Cage-Free Report is available under the STATISTICS Tab.
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USDA Grain Stocks Report
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09/30/2024 |
The USDA quarterly Grain Stocks Report released on September 30th 2024, documented storage of corn and soybeans, classified according to on-site and remote facilities including elevators and commercial installations. Quantities of the two major ingredients as Prices and commentary are incorporated in the Weekly Energy, Economy and determined by USD-NASS, relevant to the cost of poultry production were:-
“Old crop corn stocks on hand as of September 1st 2024 totaled 1.76 billion bushels, up 29 percent from September 1st 2023. Of the total corn stocks, 780 million bushels (44 percent were stored on farms), up 29 percent from last year”. This was down from 61 percent three months ago indicating a sell-off despite declining prices to realize income and make room for the 2024 harvest. “Off-farm stocks, at 980 million bushels, were up 30 percent from a year ago. The June-August 2024 indicated disappearance was 3.24 billion bushels, compared with 2.74 billion bushels during the same period a year earlier”.
“Old crop soybeans stored in all positions on September 1st 2024 totaled 342 million bushels, up 29 percent from September 1st 2023. Soybean stocks stored on farms totaled 111 million bushels, (32 percent) up 54 percent from a year ago. Off-farm stocks, at 231 million bushels, were up 20 percent from last September. Indicated disappearance for June-August 2024 totaled 628 million bushels, up 18 percent from the same period a year earlier”.
The weekly Economy, Commodity and Energy Report posted each week and a summary of the WASDE #652 released on September 12th is retrievable under the STATISTICS tab.
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Egg Projection Sept 2024
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09/18/2024 |
Updated September 2024 USDA Projection for U.S. Egg Production and Consumption.
On September 18th 2024 the USDA Economic Research Service (ERS) issued actual values for egg production during 2023 with a projection for 2024 and a forecast for 2025. Production, consumption and prices were revised from the previous August 16th 2024 report.
Projected egg production for 2024 was adjusted downward from the August 2024 Report to 7,801 million dozen This will be 0.8 percent less than in 2023 due to progressive depletion of hen flocks due to HPAI through July with no cases for the past 8 weeks. The per capita consumption of shell eggs and liquids combined for 2024 will be 274.8 eggs down 4.5 eggs (-1.6 percent) from 2023. The projected average 2024 benchmark New York bulk unit price was raised 86.9 cents to 278.9 cents per dozen.
Subsequent USDA projections will provide greater clarity on the recovery in consumption in an economy that is undergoing deflation. The 2023 Midwest in-carton national wholesale price peaked at $5.17 per dozen on January 3rd 2023 but fell precipitously to a market bottom of $0.78 per dozen on May 8th 2023. Midwest Large wholesale price was restored during May 2024 and despite substantial declines during late August through September attained $2.50 per dozen for eggs in cartons delivered to DCs on September 18th 2024. The Midwest wholesale Large value should be compared to the USDA/EIC projection of the combined nest-run July 2024 cost of 73 cents per dozen for caged white Large, plus a provision for processing, packaging and transport of 60 cents per dozen amounting to $1.33 cents per dozen.
Restoration in flock size after HPAI flock depletions in 2022 progressed at a rate of approximately 0.5 million per week but placements were limited by the availability of pullet chicks and in some companies the rate of conversion to alternative housing systems. Restoration of the national flock was compromised by a resurgence of HPAI with 13.0 million layers depleted during the 4th quarter of 2023 representing 4.0 percent of the nominal producing flock of 326 million hens, mainly on complexes averaging over one million hens. Unpredictable factors affecting price will include the extent of anticipated losses during the fall migratory season. Approximately 17 million hens were lost to HPAI year-to-date in four states. At present the national egg-producing flock is down by 18 to 20 million hens compared to the complement at the beginning of the 2022 epornitic.
Exports of eggs and products at approximately 2.4 percent of total production over the first half of 2024 did not materially affect the domestic price.
The USDA forecast for 2025 includes production of 8,125 million dozen, up an optimistic 4.1 percent from 2024. Projected consumption of 285.9 per capita, would be a speculative 11.1 egg (4.0 percent) increase over 2024 This forecast probably presumes complete control of HPAI and an adequate supply of replacement chicks and pullets, both unrealistic assumptions. The increase, if it were to transpire would depress the NY Large benchmark price to $1.87 per dozen.
During 2023 shell egg exports attained 89.4 million dozen, up 28.6 percent compared to 2022 when high domestic prices prevailed. Egg products were up 18.2 percent to 20,814 metric tons compared to 2022.
Over the first half of 2024, 39.9 million cases of eggs were exported valued at $64.6 million. Volume and value were 14.8 and 5.9 percent respectively lower compared with the corresponding months in 2023.
Over the first half of 2024, 14,503 metric tons of egg products were exported valued at $80.6 million. Volume and value were 11.7 and 12.8 percent respectively lower compared with the corresponding months in 2023.
Updated September 2024 USDA data is shown in the table below:-
Parameter
|
2021
(actual)
|
2022*
(actual)
|
2023
(actual)
|
2024*
(projection)
|
2025
(forecast)
|
% Difference
2023-2024
|
|
|
|
|
|
|
|
Production (million dozen)
|
8,031
|
7,825
|
7,864
|
7,801
|
8,125
|
-0.8
|
Consumption (eggs per capita)
|
282.5
|
280.5
|
279.3
|
274.8
|
285.9
|
-1.6
|
New York price (c/doz.)
|
119
|
282
|
192
|
278.9
|
187.5
|
+42.2
|
*Data influenced by HPAI losses. Recovery in 2025 considered unrealistic
Source: Livestock, Dairy and Poultry Outlook released September 18th 2024
Subscribers to EGG-NEWS are referred to the postings depicting weekly prices, volumes and trends and the monthly review of prices, exports and related industry statistics.
|
Egg Exports
|
09/11/2024 |
Export of Shell Eggs and Products, January-July 2024.
The volume of exports of shell eggs is conditioned by the domestic needs of importers, price against competitors and regulatory disease and logistic restraints. This is demonstrated by the 182 percent drop in volume of shell egg exports from 2012 (198 million dozen) to 2022 (70 million dozen). Due to depletion of flocks in 2023, export prices increased 113 percent from $1.02 per dozen to $2.16 per dozen reflecting domestic prices. Depressed exports persisted in 2023 with 90 million dozen shell eggs exported at an average price of $1.80 per dozen as losses from HPAI rose in the last quarter with a consequential rise in domestic price. This situation persisted through the first half of 2024 but with prospects for improved volume based on decreasing prices.
It is probable that lost markets other than in the USMCA and Caribbean nations will be reclaimed over the intermediate term. Sporadic and short-term exports may be made to various nations based on supply disruption caused by HPAI or other factors.
USDA-FAS data collated by USAPEEC, reflecting export volume and values for shell eggs and egg products are shown in the table below comparing 2024 with 2023:-
PRODUCT
|
Jan.-July 2023
|
Jan.-July 2024
|
Difference
|
Shell Eggs
|
|
|
|
Volume (m. dozen)
|
51.4
|
45.6
|
-5.8 (-11.3%)
|
Value ($ million)
|
106.0
|
94.5
|
-11.5 (-10.8%)
|
Unit Value ($/dozen)
|
2.06
|
2.07
|
+0.01 (+0.5 %)
|
Egg Products
|
|
|
|
Volume (metric tons)
|
19,220
|
16,162
|
-3,058 (-15.9%)
|
Value ($ million)
|
81.6
|
71.9
|
-9.7 (-11.9%)
|
Unit Value ($/metric ton)
|
4,245
|
4,448
|
+203 (+4.8%)
|
U.S. EXPORTS OF SHELL EGG AND EGG PRODUCTS DURING
JANUARY-JULY 2024 COMPARED WITH 2023
SHELL EGGS
Shell egg exports from the U.S. during the first seven months of 2024 declined by 5.8 percent in volume and 11.3 percent in total value compared to the corresponding months in 2023. Unit value increased by 0.5 percent to $2.07 per dozen compared to the corresponding period in 2023.
Shell egg exports from the U.S. during July 2024 declined by 6.5 percent in volume but were higher by 87.8 percent in total value compared to the corresponding month in 2023. Unit value increased by 101.7 percent to $2.40 per dozen compared to July 2023.
Canada was the leading importer of shell eggs during the first seven months of 2024, with 32.4 million dozen representing 71.1 percent of volume and 68.7 percent of the $94.5 million total value of U.S. shipments of shell eggs. Unit price over January-July 2024 was $2.00 per dozen compared to $2.50 per dozen for all consignments in January-July 2023. Imports by Canada are driven by consumer demand balanced against availability through the controlled supply situation. This inhibits flexibility, necessitating imports from the U.S. to supply shortfalls especially when additional losses occur due to HPAI or under conditions of high demand. This model assures the approximately 1,000 independent producers a stable income but is supported by higher prices to consumers. During July 2024 Canada imported 4.1 million dozen up 86.4 percent over the corresponding month in 2023. Value was up 259 percent to $9.7 million. Unit value was 91.9 percent higher to $2.36 per dozen.
The Caribbean Region (Bahamas, Netherlands Antilles, Cayman Islands, and others) was a distant second in shell egg imports from the U.S. valued at $17.3 million during January-July 2024, with 7.6 million dozen representing 16.7 percent of volume and 18.2 percent of the total value of U.S. shipments of shell eggs. Unit price over January-July 2024 was $2.28 per dozen
Mexico was the third-ranked importer of shell eggs in January-July 2024 with a volume of 1.5 million dozen representing 3.3 percent of export volume and 2.8 percent of value. Unit value of $1.69 per dozen is compared to an average value of $2.07 per dozen for all exports. During July Mexico did not import shell eggs from the U.S. that are normally used for breaking.
The average 12-month trailing USDA benchmark price for nest-run large shell eggs was $1.70* per dozen weighted by high prices caused by shortages during the first quarter of 2023 from depletion of flocks infected with HPAI.
*USDA 12-month USDA benchmark nest-run unit prices per dozen: August, $0.90; September, $1.00; October, $0.89; November, $1.65; December, $1.81; January 2024, $1.72; February, $2.51; March, $1.87; April, $1.35; May $1.35; June $2.07 and July $3.33.
EGG PRODUCTS
The total volume of exported egg products during the first seven months of 2024 decreased 15.9 percent to 16,162 metric tons compared to January-June 2023. Total value of $71.9 million was lower by 11.9 percent compared to January-July 2023. Unit value increased by 4.8 percent to $4,448 per ton compared to January-July 2023. During 2023 the U.S. exported 29,814 metric tons of egg products valued at $134.3 million with a unit price of $4,505 per metric ton. Fluctuation in unit price reflects the composition of exports and the relationship between World supply and demand. Ukraine is now restrained in production but India continues as a significant exporter.
Japan was the leading importer by volume of U.S. egg products during January-July 2024 receiving 4,657 metric tons from the U.S. valued at $21.2 million representing 28.8 percent of volume and 29.4 percent of value with a unit price of $4,552 per metric ton. Volume for January-July 2024 was down by 33.3 percent and value was lower by 37.1 percent compared to the corresponding months in 2023. During July 2024 Japan imported 510 metric tons, down 37.3 percent over the corresponding month in 2023. Value was down 47.8 percent to $2.4 million but unit value was 16.8 percent higher to $4,705 per metric ton. During 2023 Japan imported 10,352 metric tons of egg products from the U.S., valued at $49.9 million. With the conclusion of a bilateral trade agreement, the U.S. should no longer be at a competitive disadvantage with respect to the E.U.
Mexico was the 2nd ranked importer from the U.S. during January-July 2024 based on a volume of 3,393 metric tons with a value of $12.8 million, representing 21.0 percent of volume and 17.8 percent of the total value of U.S. exports of egg products. Exports to Mexico were up by 9.3 percent in volume but 17.4 percent lower in value compared to January-July 2023. The unit value of $3,772 per metric ton can be compared with the average unit value for U.S. exports of all egg products at $4,448 per metric ton. During July Mexico imported 362 metric tons valued at $1.4 million. Volume was 27.2 percent lower and value was 48.2 percent below July2023 with a unit value of $4,230 per metric ton.
Canada was the 3rd-ranked importer in January-July 2024 based on a volume of 2,346 metric tons with a value of $8.4 million. Canada represented 14.5 percent of volume and 11.7 percent of value with a unit price of $3,580 per metric ton. During July Canada was 3rd- ranked as an importer with 302 metric tons representing 18.2 percent of exports of egg products up 43.1 percent from July 2023. Value was $0.9 million or 12.3 percent of the monthly total, up 125 percent from July 2023 with a unit revenue of $2,980 per metric ton. Volumes shipped reflect restoration of the institutional and food service sectors and the relative availability of domestic product in Canada.
The E.U.-27 advanced to the 4th-ranked importer of egg products over the first seven months of 2024 with 1,384 metric tons. Value was $12.0 million with a high unit price of $8,670 per metric ton. During July the E.U. imported 109 metric tons of egg products valued at $1.0 million with a unit price of $9,174 per metric ton.
South Korea was ranked 5th among importers of egg products during January-July 2024 with a volume of 1,291 metric tons. Export value was $5.2 million with a unit value of $4,028 per metric ton. Comparing these values with the corresponding months in 2023, volume was 108.9 percent higher and value was up by 67.7 percent. Most flocks in South Korea have been restored to production after depopulation following 2022-3 outbreaks of HPAI. Import volume may have been influenced by recent limited but rising flock depletion. South Korea imported 91 metric tons during July 2024. During 2023 South Korea imported 1,141 metric tons valued at $5.3 million. Depending on severity, the return of HPAI may result in a disparity between local availability and demand requiring imports in 2024 as in 2022.
Australia has emerged as an importer of egg products with 725 metric tons shipped during the first seven months of 2024 valued at $2.3 million with a unit price of $3,172 per metric ton. There were no imports in April, but 151 metric tons were shipped during both May and June but nothing in July. Depending on the HPAI situation that has required depopulation of 7 percent of the Nation’s hens, additional orders for shell eggs and products may be forthcoming.
COMMENTS
Exports to Canada and Mexico combined in 2022 amounted to $126.5 million in value equivalent to 47.5 percent of the total value of shell eggs and products shipped. During 2023 exports valued at $150.7 million represented 50.8 percent of shell egg and egg products amounting to $296.5 million. Canada represented 59.0 percent of the $162.2 million for shell eggs and 10.3 percent of egg products valued at $121.2 million, consigned during 2023, emphasizing dependence on this USMCA partner. During the first seven months of 2024 the USMCA imported shell eggs and products valued at $88.7 million. This represented 53.4 percent of all U.S. egg and product exports valued at $166.4 million.
Aspirational volumes of exports in excess of five percent of domestic production are unrealistic. The E.U., Japan, South Korea and Taiwan will indent according to their needs for undifferentiated shell eggs and products based on landed price in a competitive World market. Purchase decisions for commodities are determined by FOB price, freight, duty and broker margins. Shell eggs and the various categories of egg products are essentially commodities and generally do not respond to promotion. The recent appointment of a manager responsible for promoting exports and trade-related missions (‘junkets’) are inconsistent with prudent use of check-off funds. This opinion is based on an understanding of the factors motivating imports comprising need and price. The reality is that U.S. exports are heavily concentrated among our two USMCA partners in addition to the Caribbean region based on proximity and price.
Exports will be dependent on the willingness of importers to accept the World Organization for Animal Health (WOAH) principle of regionalization (zoning) in the event of outbreaks of exotic Newcastle disease or isolation of either H5 or H7 avian influenza (AI), in commercial flocks, irrespective of pathogenicity. Most importing nations are now applying regionalization and permitting imports on a zonal, county or state-exclusion basis following H5 or H7 AI infection. Canada and the U.S. operate according to a 2018 bilateral agreement to maintain trade in the event of outbreaks of catastrophic exotic diseases including HPAI and END.
Generally pasteurized egg products should not be subject to any embargo imposed following reports of AI or Newcastle disease in a region.
|
Cage-Free Report
|
08/01/2024 |
USDA Data On Cage-Free Production For July 2024
EGG-NEWS summarizes and comments on data and trends in the monthly USDA Cage-Free Report. This data is correlated and interpreted in the WeeklyEggPrice and Inventory Report posted on EGG-NEWS mailed on Fridays each week.
The USDA Cage-Free Report covering July 2024, released on August 1st 2024, documented the complement of hens producing under the Certified Organic Program to be 19.6 million (rounded to 0.1 million), down 0.2 million hens or 0.9 percent from June 2024. This is due to depopulation carried out as a result of HPAI in previous months. The number of hens classified as cage-free (but excluding Certified Organic) and comprising aviary, barn and other systems of housing apparently declined by 0.7 million hens or 0.9 percent from June 2024 to 100.7 million, despite previous flock depopulation and an unexpected high value in June. Hen numbers posted by the USDA for July are questioned as to accuracy taking into account chick placements and depopulation figures released by APHIS.
The number of eggs collected is accepted as accurate but since the values for average hen-week production are unacceptably high this suggests that the denominator reflecting the number of hens is probably incorrect. Alternatively if conventional eggs from cages are deceptively marketed as cage-free, or if cage free eggs are packed as certified Organic, assuming an accurate number of hens over a given month, the apparent hen-week value would be disproportionally high. The respective numbers of hens claimed for organic and cage-free flocks should reflect the net contribution of chick placements 20-weeks previously, HPAI depopulation and age-related depletion and should correspond to monthly supply data and inventory extending over successive quarters. Unlike conventional cage production cage-free hens are not generally molted reducing this possible reason for error in calculating rates of production.
Average weekly production for Certified Organic eggs in July 2024 was down 0.9 percent compared to June 2024 with a questionably high average weekly production of 83.8 percent, up from 83.7 percent in June. Average weekly flock production for cage-free flocks other than Certified Organic was down 0.6 percent in June 2024, but with a more reasonable high average hen-month production of 82.5 percent, up from 82.4 percent. Seasonally, younger flocks increase the availability of cage-free and organic eggs in response to pullet chick placements 20 weeks previously in anticipation of peak seasonal demand periods. May and June 2024 data may have reflected a presumed higher proportion of younger flocks derived from pullet chicks placed during early January 2024 in anticipation of Easter 2024 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 assess 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 stated number of hens is lower than actual, especially with undercounted HPAI flock depopulation.
Flock Size Average
(million hens)
|
July
2024
|
Average
Q2-
2024
|
Average
Q1- 2024
|
Average
Q4 –
2023
|
Average
Q3 –
2023
|
Average
Q2
2023
|
Certified Organic
|
19.6
|
18.8
|
18.3
|
18.7
|
18.7
|
18.2
|
Cage-Free Hens
|
100.7
|
101.0
|
105.7
|
106.4
|
105.4
|
103.2
|
Total Non-Caged
|
120.3
|
119.8
|
124.0
|
125.1
|
124.1
|
121.4
|
Average Weekly Production (cases)
|
June
2024
|
July
2024
|
Certified Organic @ 83.8% hen/day
|
321,775
|
319,317 -0.9%
|
Cage-Free @ 82.6% hen/day
|
1,627,394
|
1,617,961 -0.6%
|
Total Non-Caged @ 82.8% hen/day
|
1,949,169
|
1,937,278 -0.6%
|
Average Nest Run Contract Price Cage-Free Brown
|
$1.70/doz. (Was $1.68 June and preceding months 2024)
|
July 2024 Range:
|
$1.35 to $2.35/doz. (unchanged since March 2023)
|
FOB Negotiated July price, grade-ready quality, loose nest-run. Price range $2.07 to $2.90 per dozen
|
Average July 2024 Value of $2.27/doz.
($2.16/doz. June 2024)
|
Average July Advertised National Retail Price C-F, Large Brown
|
$3.30/doz. July 2024 (5 regions)
(was $3.02 in June 2024)
|
USDA Based on 5 Regions, 3,527 stores
Excluding NW, AK and HI.
|
High: $3.99/doz. (SW. 25 stores)
Low: $3.02/doz. (SC. 132 stores)
|
Negotiated nest-run grade-ready cage-free price for July 2024 averaged $2.27 per dozen, up by 5.1 percent from $2.16 per dozen in June 2024, reflecting presumably lower supply relative to demand. The July 2024 advertised U.S. retail price for cage-free eggs over five regions (excluding NW, AK. and HI.) was $3.30 per dozen up 28 cents per dozen (9.2 percent) from June 2024 over 3,527 stores. This compares with 6,677 stores in June confirming fewer promotions in July.
The apparent difference between a recorded average wholesale price of $2.27 per dozen plus a provision of 60 cents per dozen for packaging, packing and transport, results in a price of $2.87 per dozen delivered to CDs. The average five-region advertised retail price of $3.30 corresponds to an average retail margin of 15.0 percent (9.5 percent last month) over the average wholesale delivered price. Margins are presumed higher for pastured and other specialty eggs at shelf prices reaching $9.00 per dozen in high-end supermarket chains. Retailers that are maximizing margins especially on Certified Organic, free-range and pastured categories restrict the volume of sales, ultimately disadvantageous to producers.
Based on the importance of cage-free production, the USDA-AMS issues the Cage-Free report on volumes and prices at monthly intervals for the information of Industry stakeholders. There is obvious doubt as to the accuracy of individual monthly flock numbers especially when reports show a marked change at the end of a quarter or from the previous month without obvious cause, or alternatively when there is no change in the cage-free flock for sequential months.
The current report apparently does not account for flock depopulations as a result of HPAI in May and reflects a population higher than would be attained from early January 2024 pullet chick placements.
It is suggested that USDA should consider a quarterly report with more accurate hen data. This would be more useful to the industry for planning and marketing decisions. Price data is available each week from other USDA reports.
Subscribers are referred to weekly USDA wholesale and retail prices posted in the Egg Price and Inventory Report in EGG-NEWS E-mailed each Friday. The previous Monthly Cage-Free Report is available under the STATISTICS Tab.
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USDA Agricultural Prices Report
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11/17/2023 |
THE USDA Agricultural Prices Report released October 31st posted September prices for agricultural commodities and expenditures.
September Prices Received Index, down 2.9 percent from August
The USDA ERS summarized prices as follows:-“The September Prices Received Index 2011 Base (Agricultural Production), at 122.6, decreased 2.9 percent from August and 7.1 percent from September 2022. At 113.9, the Crop Production Index was down 4.2 percent from last month and 11 percent from the previous year. The Livestock Production Index, at 133.1, decreased 0.9 percent from August, and 2.6 percent from September last year. Producers received lower prices for corn, hogs, soybeans, and lettuce during September, but higher prices for broilers, milk, grapes, and broccoli. In addition to prices, the volume change of commodities marketed also influences the indexes. In September, there was decreased marketing of cattle, wheat, cotton, and peaches and increased monthly movement for soybeans, corn, dry beans, and apples”.
September Prices Paid Index, Up 0.1 Percent from August
“The September Prices Paid Index for Commodities and Services, Interest, Taxes, and Farm Wage Rates (PPITW), at 138.8, is up 0.1 percent from August 2023 but unchanged from September 2022. Higher prices in September for feeder cattle, feeder pigs, diesel, and nitrogen more than offset lower prices for feed grains, complete feeds, concentrates, and hay & forages”.
Corn farmers received $5.21 per bushel in September 2023 compared to $5.73 per bushel in August 2023, down 9.1 percent. The price received in September 2022 was $7.09 per bushel
Soybean farmers received $13.20 per bushel in September 2023 compared to $14.10 per bushel in August 2023, down 6.8 percent. The price received in September 2022 was $14.20 per bushel
The September 2023 egg price received by farmers was $ 1.22 per dozen for table eggs lower than $1.35 per dozen in August 2023 and compared to $2.65 per dozen in September 2022. The sharp year-on-year increase is attributed to disequilibrium between supply and demand. Highly pathogenic avian influenza resulted in depletion of 44 million hens with a reduction of 20 million producing birds in the supply flock on average from mid 2022 onwards. This situation was coupled with increased demand as consumers increased purchases of eggs representing a competitively priced protein source in an inflationary environment.
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Planted Acreage Report
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06/30/2023 |
The June 30th 2023 Planted Acreage report documented the respective areas planted to corn and soybeans, the two commodities of relevance to the poultry industry. The USDA confirmed:-
Corn-planted area for all purposes in 2023 is estimated at 94.1 million acres, up six percent or 5.52 million acres from last year. This represents the third highest planted acreage in the United States since 1944. Compared with last year, planted acreage is expected to be up or unchanged in 43 of the 48 estimating States. Area harvested for grain, at 86.3 million acres, is up nine percent from last year.
Soybean-planted area for 2023 is estimated at 83.5 million acres, down five percent from last year. Compared with last year, planted acreage is down or unchanged in 21 of the 29 estimating States.
Together with the Grain Stocks report the Planted Acreage data moved the market for corn and soybeans by about five percent but in contrasting directions.
For corn the acreage was above the most optimistic projection although offset by a lower stock. At 14H30 on the CME after the release of the two USDA reports, corn was down 25 cents per bushel to 556 cents for July delivery and for September, corn was down 34 cents per bushel to 489 cents.
For soybeans the reduced acreage and consequently lower ending stocks was bullish for the new crop. At 14H30 CME soybeans were up 75 cents per bushel to 1,558 cents for July delivery and for September the soybean price was up 73 cents per bushel to 1,354 cents.
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USDA-ERS Predicts Egg Prices for 2023
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02/27/2023 |
According to USDA economists, retail egg prices increased by 8.5 percent in January 2023, approximately 70.1 percent above January 2022. The USDA-ERS now predicts that egg prices will increase by 37.8 percent in 2023 but with a wide range of 18.3 to 62.3 percent attributed to volatility. Concurrently the USDA-ERS predicted a 4.7 percent increase in the price of meats, 7.2 percent for dairy products and 12.8 percent for cereals and bakery products.
Wholesale farm-level egg prices are predicted to increase by 7.4 percent in 2023 with a wide prediction interval of -32.6 to 76.1 percent. Egg prices are extremely volatile, complicating reliable predictions.
EGG-NEWS will monitor weekly USDA wholesale prices by region and average retail prices to document retail margins.
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