July 23, 2003                                                                                                                                                                                                                                                                          No. 31

 

Don Bell’s Table Egg Layer Flock Projections and Economic Commentary - 2003

 

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

 

U.S. Estimated Cost of Producing Table Eggs/Income at the Farm Level

First 6 Months - 2003 

 

The table below lists our estimated farm egg production costs and farm income for the first six months of 2003 compared with 2002 and 2001.  This represents the entire U.S. egg industry combining regions as a simple average.  Feed costs are based upon regional published prices for corn and soybean meal.  A common feed formula and overhead costs ($13/ton) were used to calculate feed prices.   Pullet costs were based upon regional feed prices and regional chick prices.  Egg production was assumed to be 34 dozen/hen (two cycles).  Individual firms within a region are expected to differ from their region’s averages for a variety of reasons.  Regions are expected to vary as well.  

 

Farm egg prices are defined as the price received for un-processed farm eggs The price varies by the region of the country.  Representative prices for the entire country are difficult to estimate because most eggs today are sold first as processed eggs (cleaned, graded, sized, and cartoned) and the “farm price” may not be used or reported. Other eggs are produced for breaking purposes as opposed to cartoned eggs. For this report, egg income at the farm level is equal to the four region average  for Class 1, gradeable nest-run egg prices for the years 2001 to 2003 as published by Urner Barry*.

 

Table 1: U.S. Estimated Cost of Producing Table Eggs/Income at the Farm Level - 2001 to 2003

(cents/dozen) - January through June.

         Courtesy of Urner Barry Publications Inc., Toms River, NJ

 

Egg prices for the U.S. published by USDA NASS in their publication “Agricultural Prices” are quite similar to the four-region average Gradeable Nest-run (GNR) prices published by Urner Barry.  The USDA price is defined as “Prices received by farmers in the first sale to buyers.”  A five-year analysis of USDA price quotations for “market (table) eggs” showed an average of 45.5¢ per dozen for all eggs compared to 44.7¢ for GNR eggs - a difference of only 0.8¢ per dozen.  In the USDA definition, the term “First sale to buyers” could be misinterpreted and could include some graded eggs thereby elevating the average price.

 

Table 2 illustrates the relationship between costs and income by month. (UC cost estimates are based on published 6 region corn and soybean meal prices; income is based on UB Class 1 nest run eggs - 4 region average.)

 

Table 2.  Seasonal Farm Costs and Egg Income - U.S. (2003)

 

In summary, during the first half of 2001, most producers probably experienced a “break-even” situation.  During the same time period in 2002, our estimates indicate that most producers lost money.  In 2003, egg prices have been more than 10¢ per dozen higher than in 2002 and most producers would say “It’s been a good year so far.”

 

Table egg layer numbers for the first five months of 2003 are practically the same as last year.  With an increasing consumer population estimated at 3 million per year and a strong demand for eggs, the 10.8¢ per dozen improvement in egg prices has far exceeded the 3¢ per dozen increase in feed costs.