U.S. processors break more eggs as prices fall

After the rapid decline in U.S. pricing for breaking stock eggs after 2015’s avian flu disaster, pricing shot up again in Q4 2017 and remained elevated through Q1 and Q2 2018. In the summer of 2017, the Netherlands reported finding the insecticide fipronil in eggs, requiring the recall and destruction of millions of eggs. With egg production out of the Netherlands temporarily dropping 30 percent, the EU turned to U.S. eggs and egg products to fill the supply gap, which elevated U.S. pricing. Further compounding Europe’s supply challenge, eggs from Ukraine were banned because of an outbreak of avian flu. This also helped keep egg pricing high.

In March, U.S. pricing saw an especially sharp spike, averaging nearly $1.15 per dozen, as harsh winter conditions reduced egg yield. Another factor in this year’s stronger pricing: processors have more competition from the retail sector. AC Nielsen reports that retail egg sales for June-May 2017/18 increased over 1 percent from the previous 52 weeks, while products with egg as an ingredient saw a sales volume increase of just 0.2 percent. (For reference, the U.S. population growth rate was about 0.7 percent.)

Prices for breaking stock moderated a bit this summer, returning to the mid-50-cent range on average, and processed volume has been good. USDA is forecasting a slight slowdown in egg production for the rest of the year.

Egg breaking stock: Average price vs. volume processed

Source: USDA
Posted by: Information Services
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