Egg Industry’s annual survey of the largest US egg producers yielded estimates of the number of layers housed on December 31, 2011, for 57 companies ranging in size from a half million to 28 million birds. Cal-Maine Foods remained on top in the rankings with 28 million hens, and Rose Acre Farms repeated in the second position with 23.7 million layers. Moark LLC moved up in the rankings to third place with 15.7 million hens and Decoster Egg Farms, the third largest egg company in 2010, drops out of the rankings this year since the company has leased all of its farms to other egg producers.
Sparboe Farms and Rembrandt Enterprises round out the top five holding down the fourth and fifth spots in the survey, respectively. The top five firms had almost 93 million hens in lay on December 31, which represents 37% of the surveys total of 251.4 million hens. In the 2010 survey, the top five firms had 87.5 million layers, 34% of the survey total. The top 10 firms in this year’s survey had 140 million layers, 56% of the survey total.
According to the USDA NASS Chicken and Eggs report for December of 2011, there were 286 million table egg layers housed in the U.S. on December 1, 2011. Egg Industry’s survey focuses on companies with a half million or more layers, and the survey total represents around 88% of the egg layers reported by the USDA.
Participation in this year’s survey by egg producers was up significantly from last year and we thank all who submitted numbers.
Industry expansion
Egg producers were asked to report as they added additional housing for layers or replaced cages in any existing buildings in 2011. Responding egg producers report that in total they added housing for 3.3 million additional layers in 2011. Producers also reported installing new cages for just over 200,000 hens in existing structures last year. Survey respondents report intentions to add housing for 4.5 million additional layers in 2012 and that they will replace cages in houses for 440,000 hens.
Top events of 2011
Last year was perhaps the most eventful year ever for the U.S. layer industry, and four stories stand out in significance for producers. From the record high feed costs to the FDA on-farm inspections there was no shortage of significant events, but the UEP-HSUS welfare agreement was probably the single most significant event of 2011 for egg producers and is the one likely to have the longest lasting impact.
UEP-HSUS welfare agreement
The United Egg Producers and the Human Society of the United States signed a memorandum of understanding in July which outlines standards for housing and care of hens in the U.S. and commits both groups to petition Congress to pass legislation establishing these as national standards. The agreement commits U.S. egg producers to transition out of traditional cages to enriched colony housing for hens over an 18 year period. The UEP and HSUS are currently lobbying members of Congress to make changes to the Egg Products Inspection Act to incorporate the agreement into law.
If passed by Congress, the legislation would supersede state laws including those that have been passed in Arizona, California, Michigan and Ohio. In recognition of ballot Proposition 2 passed by voters in California in 2008, UEP and HSUS will ask Congress to require California egg producers to eliminate conventional cages by 2015, the date Proposition 2 is scheduled to go into effect, and provide all hens with the space and environmental enrichments that the rest of the egg industry will be phasing in over the next 15 to 18 years.
Decoster exits the egg business
Austin “Jack” DeCoster and his son, Peter, exited the egg business and gave up control of their egg operations in Iowa, Maine and Ohio in 2011. The Decoster family had been in the egg business for over 50 years, and Decoster Egg Farms and its affiliated producers ranked as the third largest egg producer in the U.S. as recently as 2010.
The last few years were tumultuous ones for Decoster’s egg businesses as the company’s Iowa operation was involved in the massive 2010 egg recall and some of the company’s other farms were involved in undercover video attacks.
Moark LLC signed a long-term lease agreement for the assets of Decoster’s three Maine egg producers and distributors, commonly referred to as Quality Egg of New England LLC, Dorothy Egg Farm LLC, and Mountain Hollow Farms LLC. Moark will be the sole operator of the feed mill, egg production, processing, and warehousing operations owned by the companies, which are located in Turner, Leeds, and Winthrop, Maine. At the end of the 10-year lease period, Moark will have the option of purchasing the facilities.
Centrum Valley Farms in Alden, Iowa, signed a nine-year lease with an option to purchase six Decoster operations in Iowa, including the egg farms in Wright County.
Ohio Fresh Eggs, Decoster’s Ohio farms, are being leased by a group of individuals associated with some Iowa egg farms. J.T. Dean, who is also a shareholder of Center Fresh Egg Farm in Sioux Center, Iowa, is a member of the new ownership group for the Ohio farms. Dean said that the five facilities which are located in Licking, Hardin and Wyandot counties are leased for nine years with an option to purchase.
The financial terms were not disclosed for the lease agreements for any of Decoster’s facilities.
FDA farm inspections
In 2010 and 2011, the FDA conducted the first across the board on-farm inspections of the over 500 egg farms that have 50,000 or more layers. These inspections were expected to be completed by the end of December 2011 and FDA planned to begin inspection of farms with between 3,000 and 50,000 layers in 2012. The inspectors are checking to see if egg farms are operating in compliance with FDA’s Egg Safety Rule.
Through the end of September of 2011, FDA had conducted 276 inspections, 46 comprehensive and 230 targeted. An additional 31 farms had been inspected by state inspectors. Of the 46 comprehensive inspections, 147 houses were environmentally sampled, and 20 of these were found to be positive for Salmonella enteritidis. But in the 147 houses, a total of 1,976 individual samples were taken, and 49 these samples were positive. So the average positive rate for all 1,976 environmental samples was only 2.5%.
Record high feed and oil costs
Last year will go down as having the highest ever average crude oil and corn prices, around $95 per barrel and $6.50 per bushel, respectively. Last fall’s corn harvest netted the second consecutive year of below trend-line corn yield in the U.S., and this has experts predicting that feed costs might fall somewhat in 2012 from 2011 levels, but they will likely stay at near record high levels.
Feed fats averaged over $0.40 per pound in 2011 and will remain at relatively high prices in 2012. Experts predict that if corn is $6 per bushel, yellow grease should fall below $0.40 per pound in 2012.
