Cooperative Extension - University of California
Number 227 - May 20, 2000

An Egg Economics Update

Donald Bell, Poultry Specialist
Department of Animal Science, University of California, Highlander Hall C, Riverside, CA 92521
Phone (909)787-4555 - FAX (909)787-7251 - E-mail: don.bell@ucr.edu

Performance Characteristics of High, Medium, and Low Profitability Flocks - Part 1

The profitability of flocks relative to performance is currently evaluated with the "profitability indexing system". Using this program, it is now possible to relate various performance traits to overall flock profitability. Standard prices for feed and eggs are used along with the measurements of hen-day egg production, egg weight, mortality, and feed consumption.

Just what are the performance traits associated with high and low profits? The data in the following table represents 203 large commercial flocks in the United States and represents the period from 1985 to 1996. It includes more than 10 million White Leghorn laying hens of all strains housed in controlled environment housing in all major regions of the country. Data includes weekly measurements for all hatch dates and seasons to 60 weeks of age.

Table 1. Egg Production Traits Associated With Various Profit Levels. (To 60 wks of age)

* Egg income minus feed cost ($/HH)

Practically all egg production measurements were positively associated with increasing profits with the exception of the negative relationship associated with decreasing egg production with age. Overall difference in profitability (between the four quartiles) was $.77 per hen housed. This was associated with about 14 eggs.

Egg size relationships are illustrated in Table 2.

Table 2. Egg Size Traits Associated With Various Profit Levels. (To 60 wks of age)

* Egg income minus feed cost ($/HH)

Egg weight, per se, showed very little effect on profitability except for the approximate 1/2¢ per dozen lower value in the 4^th category. The total egg mass factor, which considers both egg production and egg weight, appears to be more closely aligned with profitability. These analyses, though, do not include premiums for extra large and jumbo eggs.

Egg mass values in the U.S. rarely go above 55 grams per egg. In countries with premiums for the larger size categories, daily egg mass commonly exceeds 60 grams.

Feed consumption is normally closely associated with body weight. Table 3 summarizes the various body weight and feed consumption factors associated with profitability. Mortality is also included in Table 3.

Table 3. Body Weight, Feed Consumption and Mortality Traits Associated With Various Profit Levels. (To 60 wks of age). Feed price is $7.50 per 100 pounds.

* Egg income minus feed cost ($/HH)

Body weight gain from 21 to 60 weeks appears to be positively associated with increasing feed consumption, feed conversion, high mortality and reduced profitability.

As indicated earlier, these data represent the time period between 1985 to 1996. The overall mean (year) was 1991. The data presented is variable because of many factors. Performance varies because of strain of bird, management practices on the individual farms, and over time. Since prices and feed costs were standardized, the analysis over time measures only improvements in flock performance attributable to genetic or management changes. The changes in profits associated with the "year" are listed in Table 4.

Table 4. Profitability Associated With the Year of Record. (To 60 wks of age)

* P = Probability is highly significant

** Measure of degree of fit to a straight line. An R² of 1 illustrates a perfect fit.

*** Egg income minus feed cost ($HH)

The data in Table 4 demonstrates a $.07 change per year in standardized price profits. In other words, the performance improvements from one year to the next were worth $.07 per hen housed to 60 weeks of age. Which of these are attributable to genetics and which to better management can not be determined with any degree of certainty.

Individual company profits, though, are due to both correct management choices which improve performance, but also to competitive marketing and purchasing decisions. These decision, of course, are not demonstrated when prices and costs are standardized.

Titles in series:

1. Performance Characteristics of High, Medium, and Low Profitability Flocks - Part 1.

2. (A) Statistical Significance of the Relationship of Flock Performance to Profitability - Part 2.

    (B) Statistical Significance of the Relationship of Flock Performance to 22 week Production.

3. Performance and Economic Differences by Farm and Strain of Bird - Part 3.

(Month of housing as layers, month of lay).

4. Season and Its Impact on Performance and Profitability - Part 4.

Don Bell, Poultry Specialist

Phone: (909)787-4555

FAX (909) 787-7251

E-mail: don.bell@ucr.edu