February 3, 2003 No. 26
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- 2002
The table below lists our estimated farm egg
production costs and farm income for 2002.
This represents the first such report for the entire U.S. egg industry
by the author. Feed costs are based upon
regional published prices for corn and soybean meal. A common feed formula and overhead costs 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. For the U.S. average, 6 regions
were averaged. These data are meant for
comparison purposes only.
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. Others are eggs produced for breaking purposes as opposed to
cartoned eggs. For this report, egg income at the farm level is based upon the
four region average for Class 1, nest
run egg prices for the year 2002 as published by Urner Barry*.
Table 1: U.S. Estimated Cost of Producing Table
Eggs/Income at the Farm Level - 2002
(cents/dozen)
|
Costs |
2001 |
2002 |
|
Feed (3.45 lbs/dozen) |
21.3 |
22.6 |
|
Pullets (cost/34 dozen) |
6.7 |
6.8 |
|
Labor |
3.0 |
3.0 |
|
Building and Equip. deprec. |
2.9 |
2.9 |
|
Interest |
1.8 |
1.8 |
|
Misc. |
5.0 |
5.0 |
|
Total |
40.7 |
42.0 |
|
Income |
38.9 |
40.0 |
|
Net |
-1.8 |
-2.0 |
* Courtesy of Urner Barry Publications Inc., Toms
River, NJ
USDA NASS “Agricultural Prices” reports higher prices than those used in Table 1 for
2001 and 2002. Their estimates for “all
eggs” (market, table, not hatching) for 2001 was 42.9¢/doz. and,
42.0¢/doz.. These are 4¢ and 2¢ per
dozen higher than the UB nest run quotations
for 2001 and 2002 respectively.
If their prices are accurate, income minus costs for the two years would
be more like a “break even” situation.
Our estimates for California were minus 4+ ¢/doz. in 2001 and minus 5+
¢/doz. in 2002.
Assuming that nest run eggs on a monthly basis
represent the entire production, 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. (2002)
|
Month |
Cost of Production |
Estimated Income |
Net Returns |
|
J |
41.1 |
43.8 |
+2.7 |
|
F |
41.3 |
34.3 |
-7.0 |
|
M |
41.1 |
50.3 |
+9.2 |
|
A |
40.5 |
29.1 |
-11.4 |
|
M |
40.7 |
29.9 |
-10.8 |
|
J |
41.0 |
40.0 |
-1.0 |
|
J |
42.2 |
37.3 |
-4.9 |
|
A |
43.1 |
40.0 |
-3.1 |
|
S |
44.1 |
36.9 |
-7.2 |
|
O |
43.2 |
38.6 |
-4.6 |
|
N |
43.1 |
55.3 |
+12.2 |
|
D |
42.9 |
47.9 |
+5.0 |
In summary, both 2001 and 2002 were considered to be
loss years for the average U.S. producer of table eggs. Egg prices, and therefore net returns, varied
from a low of less than 30 cents per dozen in April/May to a high of more than
50 cents per dozen in March and November.
Net income varied from more than 10 cents per dozen losses to more than
10 cents per dozen profits.
We estimate that 2002 was the fourth year in a row
where costs exceeded income for the average egg producer (at the farm
level).