Egg Markets Overview - Agricultural Marketing Service

Egg Markets Overview

A weekly publication of the USDA AMS Livestock and Poultry Program, Agricultural Analytics Division

August 23, 2019

Wholesale prices continued to post daily increase through the week but at a slower pace than last week's gains. Offerings are mostly light while supplies are on the lean side of moderate as product moves to supply ongoing retail promotions. Trading moved at an active pace but has since moderated to close the week Prices for national trading of trucklot quantities of graded, loose, White Large shell eggs gained an additional 24% (from $0.680 to $0.8450 per dozen). The wholesale price on the bellwether New York market for Large shell eggs delivered to retailers rose 14% (from $1.05 to $1.20 per dozen) with a fully steady undertone noted. The Midwest wholesale price for Large, white, shell eggs delivered to retailers surged 58% (from $0.53 to $0.84 per dozen) and the California benchmark for Large shell eggs gained 29% (from $1.11 to $1.43 per dozen), both markets playing catch-up with last week's strong market gains. Both markets are firming at the new levels with some potential for slight gain headed into the new week. Consumer demand for shell eggs continues at a high pitch, driven by seasonal demand for the start of the new school year. Demand currently registers its highest level since February and is supported by a continued pace of retail featuring at very attractive consumer prices. The increase in demand is tracking closely with the 2017 trends but current wholesale prices are 34% higher than in 2017 and current retail prices are 11% lower. Retail purchasing levels into next week indicate a 4% decline reflecting the likelihood for reduced retail promotional activity as the market moves into the Labor Day weekend.

Shell Eggs, Large, White, National Index (f.o.b. dock, cents per dozen)

225

2019

2018

2017

200

175

150

125

100

75

50

25

0

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52

Source: USDA AMS L&P Agricultural Analytics

week

U.S. Table Egg Demand (Shell Egg Demand Index)

30

20

10

2019

2018

2017

Supermarket feature activity for conventional shell eggs continues to chug along as the new school season demand season arrives but retailers are expected to shift focus to the Labor Day holiday now just over a week away. The average ad price is unchanged at $0.87 per dozen. Featuring of specialty shell eggs, at 71% of shell egg featuring, dominates promotional activity this cycle led by cage-free offerings with a noted rise in nutritionallyenhanced types late in the cycle. Offerings of UEP-defined cage-free shell eggs increase sharply and the average ad price declines 12% (from $2.54 to $2.23 per dozen) and account for 33% of all shell egg features. The spread between the average ad price for 12-packs of Large conventional shell eggs and those for their cage-free counterparts, at $1.36 per dozen, narrows by $0.30 (12%).

The overall inventory of shell eggs declined 2% as shell eggs continue to clear into retail channels to support sustained retail promotional activity. The nation-wide inventory of Large eggs was down 3% while stocks of Large eggs in the key Midwest production region declined nearly 5%. The inventory share of Large class shell eggs continues to shrink ? down to just under 43% of all shell egg stocks on inventory at the start of the week, its lowest share level in 2019 to date. The share of stocks of ungraded eggs rose 3% signaling a potential slowdown in carton business following brisk retail business over the past few weeks. Breaking stock inventories decreased 4% as breakers sought to limit their exposure to a strengthening spot market. Total table egg production was unchanged from last week with a slight increase compared to the same week last year, at 5%, about 7.2 million dozen.

0

-10

-20

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52

Source: USDA AMS L&P Agricultural Analytics

week

sale price per dozen shell egg demand

Relationship Between Shell Egg Retail Ad Price and Demand (SEDI)

Advertised prices to consumers by U.S. supermarkets for conventional caged shell eggs

$1.55

Price 19

Demand 19 20 15

10 $1.35

5

0 $1.15

-5

$0.95

-10

-15

$0.75

-20

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52

Source: USDA AMS L&P Agricultural Analytics

week

Source: USDA AMS Agricultural Analytics Division (ams.services/market-research/aad)

Egg Markets Overview

The wholesale price for breaking stock in the Central States posted sharp increases again this week for a 23% gain (from $0.39 to $0.48 per dozen). This is the highest price recorded in 2019 to date and follows past seasonal trends. The undertone into next week is firm as product is expected to become more available as carton business declines as retailers shift to backyard grilling fare for the Labor Day holiday. Offerings of heavier stock are light to moderate with lighter stock plentiful. Supplies are mostly moderate with breakers drawing from stocks and slowing production. Trading is moderate. The volume of eggs processed during the past week declined 3%, representing 32% of weekly table egg production. Production of whole liquid eggs declined 3% while production of liquid whites was down a percent. Production of liquid yolks increased 5% while dried egg production dropped 2%.

Central States Breaking Stock Eggs (cents per dozen)

135

2019

2018

2017

105

75

45

15

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52

Source: USDA AMS L&P Agricultural Analytics

week

Wholesale prices for certified liquid whole eggs are too few to report with a higher undertone noted on fairly good demand, moderate offerings and supplies. Trading is active. The wholesale price for frozen whole egg products increased 7% (from $0.55 to $0.59 per pound) while the price for liquid whites declined 3% (from $0.62 to $0.60 per pound). The undertone is higher for whole egg and whites and steady on the balance. Demand is moderate to good, best for whole egg while supplies and offerings are light to moderate. The pace of trading is slow to moderate. Wholesale prices for most dried eggs are steady with prices for whole dried egg at $2.15 per pound and those for dried albumen at $4.80 per pound. Prices for dried yolk slipped 5% (from $2.10 to $2.00 per pound). The undertone is steady. Demand is moderate to good, best for whole egg, on light to moderate offerings and supplies. The pace of trading is moderate.

The monthly inventory of total dried egg products at the end of July increased 6% from June to a level 57% above that of July 2018. Stocks of whole dried eggs increased 6% during the month, 91% above 2018, while stocks of whites rose 11%, one percent below July 2018. Stocks of dried yolk gained 4%, 75% above 2018 levels, while stocks of blends rose 10% to a level 15% above July 2018 levels.

Weekly Eggs Processed (30-dozen cases)

1.8

2019

2018

2017

million 30-dozen cases

1.7

1.6

1.5

1.4

1.3

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52

week

According to NASS, the July monthly volume of frozen eggs in storage decreased 5% from June, 19% over July 2018. Stocks of whole frozen egg rose one percent for the month to a level 35% above last year and comprised 50% of stocks. Frozen yolk stocks (3% of all stocks) cleared 10% from last month, 15% below 2018. Frozen white volume in storage was down 7% for the month, 2% over the 2018 level. Stocks of unclassed eggs (38% of cold storage stocks) decreased 11% for the month, 11% over July 2018.

Monthly Frozen Egg in Cold Storage (all types)

44

40

36

32

2019 2018 2017

pounds (millions)

Cage-free commitments as of August 1 were unchanged, requiring 63 billion cage-free eggs per year to meet 100% of needs, requiring a cage-free flock of 224 million hens (68% of the U.S. non-organic flock), indicating a shortage of 170 million hens from the current non-organic cage-free flock of nearly 54 million hens.

28

24

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Source: USDA AMS L&P Agricultural Analytics; NASS

Source: USDA AMS Agricultural Analytics Division (ams.services/market-research/aad)

Egg Markets Overview

Key Egg Markets Overview

SHELL EGGS (cents per dozen) National, Large, White (f.o.b. dock prices) New York, Large, White, (price to retailers) Midwest, Large, White (price dlvrd to warehouse) California, Large, benchmark

23-Aug % Change 16-Aug

84.45 120.00

84.00 143.00

24% 67.95 14% 105.00 58% 53.00 29% 111.00

Recent History 9-Aug 2-Aug 26-Jul

32.35 76.00 43.00 100.00

27.47 59.00 43.00 100.00

24.00 59.00 43.00 100.00

19-Jul

21.66 60.00 50.00 102.00

National Retail Shell Egg (dollars per dozen) Conventional, Large, White Cage-Free, Large, Brown/White

0.87

0% 0.87 0.88 0.86 0.87 0.85

2.23

-12% 2.53 2.67 2.52 2.44 2.65

EGG PRODUCTS (f.o.b. dock prices; dollars per pound)

Central States Breaking Stock (delivered prices)

48.00

Whole Frozen Eggs

59.00

Whole Dried Eggs

2.00

23% 39.00 23.00 23.00 23.00 23.00 7% 55.00 55.00 55.00 55.00 55.00 -7% 2.15 2.15 2.15 2.15 2.15

SHELL EGG DEMAND INDICATOR (no units) Source: USDA AMS Agricultural Analytics

13.3

3.9

9.4 -2.0 -4.8 -8.2 -5.3

Key Shell Egg Markets Snapshot - 2019

(Large, White, Conventional Shell Eggs in cents per dozen)

National, Large, White (f.o.b. dock prices) Daily New York Eggs (delivered store door) Midwest Regional (delivered warehouse )1

California Benchmark Central States Breaking Stock (delivered prices) 1 Whole Frozen Egg Products (f.o.b. dock prices) Whole Dried Egg Products (f.o.b. dock prices)

Natl Average Retail Ad Price - Conventional Natl Average Retail Ad Price - Cage-free2

Shell Egg Demand Indicator 1 mostly high; 2 non-organic

23-Aug 84.5

120.0 84.0 143.0 48.0 59.0 2.00 0.87 2.23 13.3

Change 24% 14% 58% 29% 23% 7% -7% 0% -12% 3.9

16-Aug 68.0

105.0 53.0

111.0 90.0 55.0 2.15 0.87 2.53 9.4

2019 High 109.5 29-Jan 137.0 30-Jan 124.0 04-Feb 201.0 02-Jan 48.0 23-Aug 75.0 04-Jan 2.90 04-Jan 1.49 04-Jan 2.99 12-Apr 19.6 30-Jan

2019 Low 21.7 19-Jul 58.0 15-May 42.0 20-May 89.0 20-May 19.0 22-May 53.0 14-Jun 2.00 23-Aug 0.79 31-May 2.11 14-Jun -17.9 03-Apr

Source: USDA AMS Agricultural Analytics Division (ams.services/market-research/aad)

Egg Markets Overview

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