WEEKLY ECONOMY, COMMODITY & ENERGY REPORT: November 7^th 2024.

OVERVIEW

The prices for corn and soybeans were moderately higher over the past week reversing the trend from the previous week. Soybeans were up 1.8 percent and corn up 3.6 percent. Corn and soybean prices were influenced by uncertainty over yields in Brazil and Argentine. There was minimal response to the October WASDE Report. Farmers are selling both old and new crop 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. More than 91 percent of the 2024 corn crop is “in the bin”. Concurrently 94 percent of the soybean crop has been harvested, in advance of the five-year average. Both crops apparently have superior condition as compared to 2023. The transition from a neutral phase to a La Nina event is underway and will intensify during the remainder of 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 provided updated projections of yields, with USDA updates for anticipated exports and adjusted prices for the 2024 crop.

At 12H00 EST on November 6^th the CME corn quotation for December delivery was up 3.6 percent to 426 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 31.9 percent above the first eight weeks of the 2023-2024 market year.

Soybeans were priced at 1,001 cents per bushel for November 2024 delivery, just attaining the 1,000-cent psychological threshold. Price was up 1.8 percent compared to 983 cents per bushel last week for November delivery. Lower prices were attributed to the projection of ending stock, 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 6.2 percent higher than for the corresponding first eight weeks of market year 2023-2024.

Soybean meal was priced at $295 per ton for December delivery, down $7 per ton (-2.3 percent) from last week. Price is influenced by demand coupled with 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 November 6^th at 17H00 EDT the price for WTI was $71.90 up $2.97, (+4.3 percent) from last week. The current price now reflects recovery from Hurricane Milton. Current price is not materially affected by uncertainties and tensions in the Middle East but reassured that retaliatory action as announced by Israel did not include 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 August with ample reserves. There was fluctuation in the price of WTI through November 6^th with the range during the week extending from $69.49 on November 1^st up to $72.58 on November 5^th.

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 18^th. 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 18^th, 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. The Fed lowered the rate by a further 25 basis points on November 7^th as anticipated with a subsequent reduction of 25 basis points at the December meeting 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 October 30^th release by the Bureau of Economic Affairs documented an advanced estimate of Q3 2024 GDP of 2.8 percent based on preliminary figures although this value will be revised. This figure compares to the Q2 GDP of 3.0 percent and the 2.9 percent value for entire 2023. The first estimate of the Q3 GDP was influenced by higher consumer spending especially on non-durable goods.
• The October 10^th 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 October 31^st the Bureau of Economic Analysis released the Personal Consumption and Expenditure Price Index for September. The core PCE (excluding food and energy) was up 0.3 percent from the previous month, and attained 2.7 percent year-over-year. The Headline PCE was up 0.2 percent from August and 2.1 percent from September 2023, a 42-month low and consistent with projections. Food at home was up 0.4 percent from September and 1.3 percent from September 2023. Food away from home was up 0.3 percent from September and 1.3 percent from September 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 11^th 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 October 17^th confirmed that industrial production was lower by 0.3 percent in September compared to an increase of 0.3 percent in August. Capacity utilization was lower at 77.5 percent and was 2.2 percent below the long run 1972-2020 average.
• The October 7^th report by the Department of Commerce, Census Bureau on Durable Goods Ordered during September 2024 increased by 0.2 from August and 12.1 percent year-to-date, following a 0.6 percent decline during August. Excluding the Transportation component, new orders in September increased by 1.7 percent compared to an increase of 2.8 percent in August. Shipments of durable goods in the non-defense category were down 0.9 percent in September from the previous month ultimately to be reflected in the quarterly GDP.
• In a November 4^th release the Census Bureau confirmed that factory orders for U.S. manufactured goods fell 0.5 percent in September and compared to a revised fall of 0.8 in August. Shipments of manufactured goods were down 0.4 percent in September.
• The October 15^thS. Census Bureau release of the advanced estimate of retail and food sales data for September was up 1.5 percent from the revised August value and up 7.7 percent over 12 months. Food service sales were up 0.7 percent from August and up 9.4 percent over 12 months. Grocery store sales were down 0.6 percent from the revised July value and up 4.0 percent over the past 12-months. The Federal Reserve FOMC closely monitors retail sales as a measure of the trend in inflation.
• The October 31^st release by the Institute for Supply Management (ISM®) reported a lower Manufacturing Index for October at 46.5 compared to the September value of value of 47.2. The October value was still below the bifurcation point of 50 percent between contraction and expansion. The Prices Index rose to 54.8 points in October compared to 48.3 points in September, denoting higher 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 October was 46.2 points compared to 49.8 in September.
• On October 31^st the U.S. Bureau of Labor Statistics reported a 0.8 percent increase in the Employment Cost Index (ECI) over the 3^rd quarter of 2024. The year-over-year increase in wages and salaries was 3.9 percent and with benefit costs up by 5.8 percent. 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.
• The October 29^th Consumer Confidence Report prepared by The Conference Board for October, confirmed a substantial increase to 108.7 from the revised September value of 992, with all segments up. The Present Situation Index measuring perceptions of current business conditions rose 14.2 points to 138.0 in October. The Expectations Index increased from a revised September value of 82.8 to 89.1 and was the fourth consecutive month above 80. Values below this threshold over consecutive months and with a downward trajectory are regarded as predicting a recession.
• The October 11^th 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 low 12,000 in October, as documented by the Bureau of Labor Statistics in a November 1^st This was far lower than the anticipated 113,000, due to the impact of Hurricanes and strikes should be compared to the upwardly revised September value value of 223,000. The unemployment rate held at 4.1 with 7.0 million unemployed and with 1.6 million in the long-term category. The real average hourly earnings value during October was $30.48. Average hours worked in manufacturing was higher at 34.3 hours per week. Labor participation was at 62.6 percent 0.1 percent lower from September. Wage rates increased 4.0 percent over 12-months. Wage rates are closely followed by the Federal Reserve FOMC.
• The Bureau of Labor Statistics Job Openings and Labor Survey report (“JOLTS) released on October 29^th estimated 7.44 million job openings at the end of September, unexpectedly below a forecast of 8.00 million and lower than the revised August value of 7.86 million. The September job openings number was the lowest since January 2021 and was down 1.2 percent over 12 months. The peak job openings figure was 12.2 million in March 2022 during COVID. The September hiring rate was 3.5 percent (5.5 million hires); the September total separation rate, 3.1 percent (5.2 million); the quit rate 1.9 percent (3.2 million); and the layoff rate 1.2 percent, up 0.2 percent from August at 1.8 million.
• The seasonally adjusted initial jobless claims figure of 221,000 released on November 7^th for the week ending November 2^nd was up by 3,000 from the revised value of 218,000 for the previous week. The weekly value was lower than the Reuters estimate of 227,000. The four-week moving average increased to 227,250. The Bureau of Labor Statistics estimated 1.892 million continuing claims for the week ending October 25^th (up 39,000 from the revised value for last week), compared to a peak on November 27^th 2021 at 1.928 million. The September unemployment rate held at 4.1 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. Unemployment data has now recovered from the effects of Hurricanes Helene and Milton but the strike by Boeing machinists, now settled, still contributed to claims.
• The November 7^th Bureau of Labor Statistics report recorded a 2.2 percent increase in non-Farm Productivity for Q3 2024. Labor cost increased by 1.9 percent compared to 0.9 percent for Q2 2024. Output was up by 3.5 percent.
• The ADP® reported on October 30^th that private (excluding government data) payrolls increased by an unexpected 233,000 in October, up 74,000 from the revised 159,000 in September and compared to a consensus estimate of 111,000 jobs. The increase in employment was mostly in the service-related sectors amounting to 211,000 positions. Individual categories included the Transportation, Trade and Utilities sector, (+51,000); Construction, (+37,000); Hospitality, (37,000); and Professional and Business Services, (+20,000); Information (+7,000). Manufacturing was down 19,000. Annual pay was up 4.6 percent year-over-year for ‘job-stayers’, down 0.1 percent from August 2024. 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.

USDA Weekly Egg Price and Inventory Report, November 6^th 2024.

Market Overview

• The average wholesale unit revenue values for Midwest Extra-large and Large sizes were up 8.3 percent on average this past week. Medium size was up 12.6 percent. The 5-day rolling National wholesale price for graded loose on November 1^st was $3.04 per dozen down 16.9 percent from $3.66 last week. This value was approximately $1.36 above the 3-year average of $1.68 per dozen and up $1.42 from the corresponding week in 2023 at $1.45 per dozen. This past week shell egg inventory was up 4.2 percent, compared to 1.9 percent during the previous week. During the past week the NYC wholesale price increased 4.2 percent with the immediate prospect of a plateau and a possible decline in the coming three weeks. The rise in inventory with an escalation in wholesale price denotes higher consumer demand relative to supply with higher margins for producers through the remainder of the 4^th quarter despite replacement of depleted flocks. Relatively higher prices compared to 2023 are attributed to previous losses due to HPAI in 2024 reducing the national flock by 17 to 19 million hens with increased seasonal demand.
• Although there are predetermined 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 2.8 million hens depopulated in October, as the first incident cases of the fall 2024 wave there is currently a deficit of approximately 18 to 19 million hens compared to the 2022 flock of 326 million at the onset of HPAI.
• This past week, chains apparently narrowed the spread between delivered cost and shelf price. The reoccurrence of HPAI has probably created concern among chain buyers but they may have been reticent to place orders duet high and ascending prices despite the need to ensure adequate stock levels to meet demand. Inventory levels will depend on constant re-ordering to fill the pipeline through November into the Christmas surge. Discounters are raising prices on generics influencing mainstream retail stores. Eggs are now less competitive in price against the comparable costs for other protein foods, and have recently been highlighted as a contributor to the prevailing perception among consumers of ongoing food inflation.
• Total industry inventory was up by 4.0 percent overall this past week at 1.65 million cases with a concurrent 4.7 percent decrease in breaking stock, following a 4.4 percent fall during the preceding week attributed to diversion to the shell-egg market.
• 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 U.S. poultry industry has moved from a quiescent period regarding HPAI over the past two weeks with incident cases in northern Utah, southern Washington State and Oregon. California is recording outbreaks on a broiler-growing farms in four counties. Canada has diagnosed cases in The Fraser Valley of British Columbia and an outbreak in Saskatchewan. Over 412 confirmed cases of bovine influenza-H5N1 have been diagnosed in dairy herds in fourteen states with more than 202 herds California. This is a cause for concern since spill-over to laying flocks have occurred in Michigan, Colorado and Utah. 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 and migratory free-living birds. This data should be correlated with a review of molecular and field epidemiology for the past spring outbreaks in order to respond appropriately to the fall wave of HPAI that appears to be in progress. 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 established 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 November 6^th the stated total flock of 314.6 million, was up by 0.6 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 before the pre-Christmas surge in demand. Given the latest figures for depopulation in Utah, Washington State and Oregon it is estimated that the total flock is approximately 11 to 13 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 unchanged at $2.57 per dozen.Checks delivered to Midwest plants were up 1.6 percent to $2.47 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 as in the present situation with an upward trend in price.

The Week in Review

Prices

According to the USDA Egg Market News Reports, released on November 4^th 2024, the Midwest wholesale price (rounded to one cent) for Extra-large was up 8.2 percent from last week to $4.35 per dozen. Large size was up 8.3 percent to $4.35 per dozen. Mediums were up 12.6 percent to $3.84 per dozen delivered to DCs.

The stock of Medium size was down 1.0 percent and the inventory of Small size was 2.1 percent lower over the past week suggesting pullet flocks placed for the November-December surge in demand have matured but with fewer younger pullets entering production. This has implications for prices during November.

Status of 2024 Corn and Soybean Crops

The USDA Crop Progress Report released on November 4^th recorded 94 percent of the soybean crop harvested, an advance of 5 percent this past week. Ninety one percent of the corn crop has has been harvested, up 10 percent from last week. The crops were ahead of the 5-year averages by 9 percent and 14 percent respectively compared to the corresponding week in 2023.

Consistent with seasonal temperatures and previous rainfall across the Midwest and Plains states, crop condition was assumed to be unchanged during the past week. USDA did not release data on the condition of the soybean and corn crops this past week. Prospects for high corn and soybean yields were reflected in lower price projections in the October WASDE and CME futures prices for November and December (‘new crop’) delivery.  

Heat stress that occurred previously during silking predisposes corn to fungal infection leading to mycotoxin contamination of kernels. Unseasonal rain during the immediate pre-harvest period for corn will also contribute to the elaboration of mycotoxins. The status of the 2024 crop in regions will require monitoring at harvest in affected areas and especially if unseasonal precipitation occurs during the late harvest period.

Reference is made to the October 11^th WASDE Report #653 retrievable under the Statistics tab and the weekly Commodity, Economy and Energy Report, this edition, document acreage to be harvested, yields, weekly prices and ending stocks. Data will be updated in the November 8^th WASDE to be summarized in the November 16^th edition.

The October WASDE presumably incorporated the results of the USDA-NASS annual remote survey on yields and final production. Pro Farmer completed their annual crop tour in mid-August. The August 23^rd report estimated U.S. corn yield at 181.1 bushels per acre (compared to the Pro Farmer estimate of 183.8 bushels per acre) with a projected crop of 14.98 billion bushels. (15.20 billion bushels). The corresponding values for soybeans were a yield of 54.9 bushels per acre (53.1 bushels per acre) contributing to a 2024 crop of 4.74 billion bushels. (4.93 billion bushels).

EGG-NEWS will report on the harvest of the two major crops as monitored by the USDA through the end of the 2024 season in two weeks.

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 October 2024, released on November 1^st 2024, documented the complement of hens producing under the Certified Organic Program to be 20.8 million (rounded to 0.1 million), unchanged from September 2024. Depopulation was carried out in October in Utah, Washington and Oregon 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 0.24 million hens or 0.2 percent from September 2024 to 106.6 million, despite extensive flock depopulation during the month. Hen numbers posted by the USDA for October 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 October 2024 was up by 0.4 percent compared to September 2024 with a questionably high average weekly production of 83.9 percent. Average weekly flock production for cage-free flocks other than Certified Organic was up 0.1 percent in October 2024, but with a high average hen-month production of 82.7 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 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.

Negotiated nest-run grade-ready cage-free price for October 2024 averaged $4.12 per dozen, up by 98.0 percent from $2.08 per dozen in September 2024, reflecting higher demand relative to supply. The October 2024 advertised U.S. retail price for cage-free eggs over five regions (excluding NW., AK. and HI.) was $3.31 per dozen up 8 cents per dozen (2.5 percent) from September 2024 but based on only 442 stores. This compares with 659 in September and 4,484 stores in August confirming fewer promotions in October.

The recorded average wholesale price of $4.12 per dozen plus a provision of 60 cents per dozen for packaging, packing and transport, results in a price of $4.62 per dozen delivered to CDs. The average five-region advertised retail price of $3.31 corresponds to a theoretical average retail negative margin of 28.3 percent (+22.3 percent last month unless prices were raised) 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, with 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 1^st, 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.

Updated October 2024 USDA Projection for U.S. Egg Production and Consumption.

On October 18^th 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 16^th 2024 report.

Projected egg production for 2024 was adjusted downward from the September 2024 Report to 7,786 million dozen This will be 1.0 percent less than in 2023 due to progressive depletion of hen flocks due to HPAI through July with incident cases reoccurring in October. The per capita consumption of shell eggs and liquids combined for 2024 will be 274.1 eggs down 5.2 eggs (-1.9 percent) from 2023. The projected average 2024 benchmark New York bulk unit price was raised 78 cents to 270 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 3^rd 2023 but fell precipitously to a market bottom of $0.78 per dozen on May 8^th 2023. Midwest Large wholesale price was restored during May 2024 and despite substantial declines during late August through September attained $2.16 per dozen for eggs in cartons delivered to DCs on October 18^th 2024. The Midwest wholesale Large value should be compared to the USDA/EIC projection of the combined nest-run July 2024 cost of 75 cents per dozen for caged white Large, plus a provision for processing, packaging and transport of 60 cents per dozen amounting to $1.35 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 4^th 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 that to date has claimed two complexes with a total of 2.6 million birds. Approximately 19 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 of 326 million 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 4.5 percent from 2024. Projected consumption of 286 eggs per capita, would be a speculative 12 egg (4.4 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 $1.88 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 seven months of 2024, 53.2 million dozen shell eggs were exported valued at $117.3 million. Volume  was 10.1 percent lower and value was 5.1 percent higher compared to the corresponding months in 2023.

Over the seven months of 2024, 17,730 metric tons of egg products were exported valued at $78.7 million. Volume and value were respectively 16.5 and 13.0 percent lower compared with the corresponding months in 2023.

Updated October 2024 USDA data is shown in the table below:-

*Data influenced by HPAI losses. Recovery in 2025 considered unrealistic

Source: Livestock, Dairy and Poultry Outlook released October 18^th 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.

Export of Shell Eggs and Products, January-August 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 prices stabilizing moderately above seasonal levels through the 4^th quarter.

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:-

U.S. EXPORTS OF SHELL EGG AND EGG PRODUCTS DURING

JANUARY-AUGUST 2024 COMPARED WITH 2023

OVERVIEW

The USDA provided updated projections for the production of corn and soybeans in the October 11^thWorld 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 11^th 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

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 9^th 2024 are arranged, summarized, tabulated and compared with values from the previous August 9^th 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

*USDA Revised

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

The USDA quarterly Grain Stocks Report released on September 30^th 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 1^st 2024 totaled 1.76 billion bushels, up 29 percent from September 1^st 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 1^st 2024 totaled 342 million bushels, up 29 percent from September 1^st 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 12^th is retrievable under the STATISTICS tab.

THE USDA Agricultural Prices Report released October 31^st 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.

The June 30^th 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.

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.