Friday, October 16, 2015

Year-ending US egg prices may return to normal levels

The number of table egg-laying hens in the U.S. might not fully recover from the losses stemming from the highly pathogenic avian influenza outbreak in the Upper Midwest this spring until 2017, but don’t expect the current run of high wholesale egg prices to last that long.
Brian Moscogiuri, market reporter, U.S. and European egg markets, Urner Barry, said that the run-up of U.S. egg prices to record high levels that resulted from the loss of more than 40 million layers and pullets in the U.S. may be over by the end of 2015. He told the audience at the United Egg Producers annual convention in New Orleans that the reason egg prices may return to more normal levels is because of some recovery of layer numbers and lost exports.
The current high wholesale prices for eggs should not last long, but where they will end up toward the end of 2015 remains to be seen.
The U.S. exported around 5 percent of its total egg production in 2014. Because of export bans and high prices, the eggs and egg products that would have been exported in a normal year aren’t being exported, and this represents about 15 million hens worth of production.
Monthly U.S. layer numbers were running around 270 million head, 35 million head below last year’s levels, throughout the summer of 2015. The Egg Industry Center’s U.S. Flock Trends and Projections Report released on October 8, 2015, predicts that the U.S. layer flock will recover to 288.5 million head by the end of 2015.
Essentially, Moscogiuri said that if the U.S. layer flock gets to 290 million by year’s end, U.S. egg prices should come back to more normal levels, because the roughly 20-million-bird increase from the summer flock numbers and the lost exports of 15 million birds worth of production will bring the available domestic supply back to 2014 levels.
He pointed out that there has been substitution for eggs and egg products going on in the market because of high prices. It is not known how much substitution will continue after prices for eggs and egg products return to more normal levels. Another complicating factor in any price prediction is the fact that, in spite of relatively high egg prices prior to the avian influenza outbreak, U.S. per capita egg consumption had increased to its highest level in 30 years.
It is possible that McDonald’s U.S. all-day breakfast roll out October 6, 2015, will give demand for eggs another boost and help to maintain high egg prices, at least for a little while longer. Current U.S. imports of eggs are helping to mitigate U.S. production losses caused by avian influenza, but these imports have only replaced about one-fifth of the lost production. Look for the overseas imports of eggs into the U.S. to end when the spread between U.S. and EU prices falls to close to $0.50 per dozen. The spread reached as high as $1.50 per dozen this summer, Moscogiuri reported.

No comments:

Post a Comment