Agricultural Policy ARE 233
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Date Created: 09/08/15
COOPERATIVE EXTENSION UNIVERSITY OF CALIFORNIA Number 107 June 22 1990 A N EGG ECONOMICS UPDATE US MARKET TABLE EGG PRICES BY STATE 1987 TO 1989 The price egg producers receive for their eggs is one of the more elusive statistics in the egg industry The reason this is so is because of different data collection techniques the fact that there is a wide range of net prices between producers and the characteristics of sale are not always comparable and defined Nevertheless an attempt is made by the Agricultural Statistics Board of USDA to report a state by state price which is defined as table eggs including eggs sold retail by producers Figure 1 table 1 show prices for the ten largest egg states and the US average for 1987 to 1989 This represents two very poor years 1987 8 1988 and one very good year 1989 F FIGURE 1 1987 TO 1989 TABLE EGG PRICES AT PRODUCER LEVELS BY STATE Price In centsdozen oo 76 YEAR 70 tear teaa C2110 as 60 q 60 I g 46 I g j 2 4o 39 5 E 39 Q 2 E 36 g g E i 5 2 9 i g g IE 2 F 2 F 2 r 2 s 30 CA IN PA OH IA TX FL UN IA ARI 7039 U State USDA 39lncludea eggs acid retell by producer Ranked by egga produced 39AGRICULTURAL PRICES The prices listed obviously represent differing degrees of accuracy Prices between states within the same regions can t vary by the amount shown in the table other wise eggs would flow to the state with the higher prices We would suggest that egg producers review these numbers and compare them with their own If major discrep ancies exist the state officials responsible for collecting the data should be informed Inaccurate statistics can adversely affect an industry when decisions to expand or contract are based upon them Lending institutions are misled about the industry and capital may be provided in unwarranted situations or vice versa In accoraanca with aeeiicaole Federal Ian and university policy the mivenity ot Caiitornla does not discrlulnete in any ot its policiaa procedures or practices on the balls at race religion color national origin sex marital status sexual orientation age veteran status eedlcai condition as defined In Section 12926 at the California Governant Code or handicap Inquiries regarding the University39s equal opportunity policies nay he directed to the Personnel studlaa I Attirlative Action Nenagar Agriculture a Natural Resources 2 lulvenity Avenue Berkeley Calliornle N720 Phone 4 6444210 mlvarsity at California and the United States Department at Agriculture cooperating Table 1 Table egg prices at producer levels by state 198789 All eggs sold including retail by producer State 1987 1988 1989 Est Table Eggs 1989 cents per oozenquotquotquotquot39 Billions California 431 427 632 710 Indiana 487 420 599 539 Pennsylvania 400 400 560 502 Ohio 395 366 498 341 Gerogia 440 409 598 287 Texas 581 569 745 281 Florida 399 359 523 243 Minnesota 400 350 500 216 Iowa 360 348 517 207 Ar Kansas 461 13 537 181 10 state average 435 40 9 57 9 total 35 07 50 state average 465 442 613 total 5822 ranked according to estimated table eggs produced California s data appears to compare favorably with University of California statistics collected in Southern California The two to three cent differences can be accounted for by the inclusion of Northern California data and the fact that they are midmonth estimates rather than daily weighted averages An extremely interesting trend is evident in this three year PeriOd regarding Calif ornia s prices compared to the other states in the top ten If we assume that the Texas figures are probably in error California has gone from 4th in 1987 to 2nd in 1988 to 1st in 1989 This pattern parallels the general reduction in California s flock size during the same period Figure 2 illustrates the annual relationship between the all eggquot quoted egg price which includes hatching eggs and the table or market egg price These tWO Price quotations are becoming more and more influenced by the expanding broiler industry and large numbers of hatching eggs 14 of the total In the early 1980 s the diff erence was less than six cents per dozen today it is in the range of eight cents per dozen FIGURE 2 ALL EGG AND TABLE EGG PRICES US 1983 TO 1989 PRICE IN CENTSDOZEN 760 700 quotquot 39 660 quot 600 660 600 460 400 1666 67 1666 1666 616 646 626 666 644 466 442 613 YEAR ALL EGG6 TABLE E366 ALL seas mus seas USDA 6 AGRICULTURAL PRICES 2 PER CAPITA EGG CONSUMPTION PROJECTION FOR 1990 In 1989 we experienced one of our largest egg consumption drops in history as a result of our greatly reduced flock size overall production was estimated to be down 41 below 1988 and with an estimated increase in human population of 1 the net effect was a ten egg drop in per capita egg consumption figure 3 As noted in figure 3 egg consumption in the shell form has dropped by about twenty eggs between 1987 and 1989 Egg consumption in the product form though has risen by 17 eggs even though the production of egg products was down 28 in 1989 paralleling the drop in production This apparent contradiction was due to changes in product import export relationships Preliminary estimates by the USDA indicate that 1990 per capita consumption should be essentially the same as in 1989 Our current estimates of flock size for 1990 are 2336 million table egg layers compared to 2297 million for 1989 This 17 in crease in flock size along with an estimated 1 increase in productivity because of reduced flock age would increase the number of eggs produced by 31 This num ber of eggs applied to a population 101 of 1989 would result in an increase of per capita egg consumption of approximately 5 eggs This of course assumes no major changes in our import export relationships The other side of the increased per capita consumption per capita production issue is that historically a 31 increase in production is associated with a 15 decrease in egg prices If this occurs we would expect the 613 received in 1989 to be decreased to 521 in 1990 Fortunately egg prices for the first four months of 1990 are ahead of 1989 by 92 per dozen 15 Eggs used for products during the first three months of 1990 are running 10 ahead of last year and March egg breaking was at near record levels for that month Southern California producer egg prices are running 5C per dozen ahead of projections and ll6 ahead of 1989 Egg prices in 1989 though strengthened very early in the year and were above costs beginning in June FIGURE 3 PER CAPITA EGG CONSUMPTION US 1987 TO 1989 EGGS PER CAPITA 2500 2000 1 1500 1000 600 0390 1007 1000 TOTAL 2636 2466 PRODUCTS 432 439 SHELL 5636 2106 2016 YEAR SHELL seas PRODUCTS The total value of production in the US for 1989 was the second highest in history Douar vatue in 1934 was in excess of 41 billion dollars compared to 1989 when value was estimated at 38 billion dollars Interestingly the 1989 laying flock was the smallest on record Figures 4 and 5 illustrate these relationships Once again the benefits of very slight adjustments in the Nation s fleek Size are readny apparent It s unfortunate that individual firms can not recognize their con tribution to the nation s oversupply problem Eaen aets Independently to assure that they have enough eggs when this is done across the nation it leads us back to surplus production and belowcost prices A new million bird complex adds quot t0 the nation s e99 SUPP39Y This wou39d have a pricereducing effect of 2 or approximately one cent per dozen on the average Us egg price The industry can t afford to have new egg productlon complexes without retiring older facilities first FIGURE 4 US LAYER NUMBERS vs VALUE OF PRODUCTION 1980 TO 1989 J 00 LAYERS MILLIONS BILLION 420 LAYER 1quot BILLION 0 400 300 l I W 1900 1901 1902 1903 1964 1966 1900 1907 1900 1909 LAYER8 286 286 266 276 276 277 276 281 276 209 BILLION 0 327 367 346 347 411 326 364 321 307 366 YEAR INCLUDES BREEDERS FIGURE 5 US EGG PRODUCTION vs VALUE OF PRODUCTION 1980 TO 1989 BILLION s o EGGS BILLION 420 Eooo BILLION o A 400 700 39 380 090 quot 360 4 340 680 39 320 670 I l 300 1900 1901 1902 1903 1904 1905 1900 1907 1900 1909 EGGS 607 090 607 002 002 884 091 704 607 671 BILLION 0 327 367 346 347 411 326 364 321 307 306 YEAR INCLUDES HATCHING EQQS Donald Bell Poultry Specialist Cooperative Extension Highlander Hall University of California Riverside CA 92521
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