Flock size, price projections

Don Bell of the University of California in association with the Egg Industry Center at the University of Iowa has released a summary of flock size and egg price projections dated August 2. The table below shows the respective values for hen numbers and Urner-Barry Midwest large grade for September 2010 through May 2011. Values are based on an upgraded model which is revised monthly.
The estimates for flock size during the remainder of 2010 denote a higher number of replacement pullets and reduced molting. Values for replacements are based on a five-year rate from 2005-2010, averaging 5.8% of the national flock per month. Depletion over the same period is calculated on a 1.85% per month average and the value for “dead and missing” for 2010 and 2011 was set at 4.32% per month. Yearly average counts for hens producing table eggs were 280.2 million for 2008 and 280.4 million in 2009. The June 2010 average for the number of laying hens was 280.0 million, an increase of 3.0 million birds over the 2009 value of 277.0 million.
In comparing the actual and estimated egg prices from January 2010 onwards, it is noted that there is a close correspondence between the actual monthly average egg price and the forecasts developed during the three preceding months. Projections as much as seven months in advance have tended to overstate prices.
Although the August projection of egg prices denotes an increase in revenue, it is not expected that margins will improve since there is an obvious trend in escalation of feed prices. This is in part associated with an increase in the cost of corn which exceeded $4.00 per bushel at the beginning of August. A number of factors are influencing the price of corn including the USDA revision in the 2010 harvest, fall in the value of the U.S. dollar, a delay in planting due to unseasonably wet weather in Argentina.
The severe drought in the Russian Federation will markedly reduce wheat yield, resulting in the need to import grain. Demand by consumers in China and India will also have an effect on the balance between world supply of grains and oilseeds and demand for these ingredients. Diversion of one-third of the U.S. corn crop to ethanol production may be tolerable in a year of bountiful production and stability in world supply but the impact of the Renewable Fuels Initiative will become more evident in a year in which international demand for grain increases.
Flock Size & Price Projections Chart