January 10, 2002                                                                                                                                                                                                                                                                   No. 24

 

Don Bell’s Table Egg Layer Flock Projections and Economic Commentary - 2002

 

(This report was written by Don Bell, University of California Poultry Specialist, emeritus, under the sponsorship of United Egg Producers)

 

                Current Economics and Trends and “Does it Still Pay to Molt Your Flocks ?”                                    

Many table egg producers are questioning whether or not they should continue to routinely molt their flocks in light of recent egg and feed price trends and relative to UEP’s recommendations regarding molting and the methods used to initiate a molt.  They question whether or not the practice still pays today with the genetic, economic and management changes we’ve seen recently in our industry.

 

California blend egg prices for the past 4 years (including 2002) have average below 40.0 cents per dozen.  Such low prices have not been experienced (even for one year) since 1969-72 when they averaged 27.0 cents per dozen for a similar 4-year period.  This compares with 49.4 cents per dozen for the intervening 26 year period (1973-98).

 

Table 1.  Blend Farm Egg Prices - Southern California/Midwest - 1969 to 2002

* Courtesy of Urner Barry.  1974-1985 (New York quote), 1986-2002 (Midwest quote)

 

Low egg prices tend to favor longer replacement cycles.  High egg prices, on the other hand, benefit the higher productive younger flocks.  Similarly, high productive advantages for first cycle production compared to second cycle production favors the younger flocks.  Lower pullet costs as seen in the Midwest, also favors one cycle flocks because of the lower resulting replacement costs per dozen - one of the principle reasons for molting in the first place.  As one can readily see, changes in our industry work in both directions to favor molt programs on the one hand, and to place such programs at a disadvantage on the other.  In addition, the pressures to change molt methods has also caused many producers to re-think their use of the practice.

 

I would like to refer you to an earlier discussion of this issue which appeared in our “Egg Economics Update “ ”Is Your Current Replacement Program Still the Best?” Number 178 which appeared in April, 1996.  This article can be found at the University of California web site at: http://animalscience.ucdavis.edu/avian/eeu496.pdf.  Or go to http://animalscience.ucdavis.edu/avian and follow instructions below.

 

Go to the Home Page and click on “Newsletters”.  Scroll down to Egg Economic Update, Back Issues.  Then choose item #1 for 1996.  This article includes a description of software which can be used to analyze this issue.

 

 

Recent Analyses

 

The software described is totally configurable to your company’s unique flock performance characteristics and for any combination of egg, feed and pullet prices.  Table 2 (below) gives the “bottom line” results for 5 combinations of assumptions and lists the best one, two, and three cycle programs to maximize earnings.

 

Table 2.  Sample Replacement Programs for Maximizing Earnings.

               

Shaded boxes in each row represent the best program choices.

 

Extended cycles beyond 80 wks of age for the first cycle and more than 40 wks in the 2^nd and 3^rd cycles are probably not recommended regardless of what the computer tells us.  Egg quality after these laying periods begins to deteriorate at higher rates than described in the assumptions and the number of under grade and borderline quality eggs become a real problem.

 

The purpose of the above exercise is to demonstrate the outcome of unique combinations of performance and prices and to encourage egg production companies to take a more scientific approach in determining the answers to this question. 

 

Once you’ve read the more in depth version of this discussion (from the web site) and you wish to analyze this question for your own firm, let us know, and we’ll be happy to work with you.

 

The University of California Cooperative Extension Web Site address is listed below.  New items are added monthly.

 

http://animalscience.ucdavis.edu/avian