After two years financial losses, the bottom line for shell egg producers in 2007 is likely to be break even or slightly profitable. “We are optimistic about 2007, yet we are conditioned to be cautious,” says Gene Gregory, president and CEO of the United Egg Producers, Atlanta, USA.
Gregory forecasts that the Urner Barry Midwest large monthly quote will average 82 cents per dozen for the year, an increase of 6.6 cents over 2006 actual prices. “If feed costs in 2007 remain at about 8 cents per dozen over 2005 levels, then we will likely need an 80-cent Urner Barry Midwest large quote just to break even,” he says.
Gregory predicts that the industry will have 1 million fewer laying hens in 2007 than during 2006, acknowledging that other estimates call for larger reductions. A major wild card, he says is how the Ohio Department of Agriculture ruling to force the depopulation of Ohio Fresh Eggs is resolved. If the ruling is not overturned or delayed, it could result in approximately 7 million hens removed from the nation’s flock inventory.
Cage manufacturers report that 2006 was a very slow year, with one calling it “the worst in history,” Gregory says. Cage manufacturers estimate that 20 new cage layer houses were either completed during the second half of 2006 or will be the first half of 2007 for a total of about 5.3 million hens. The cage manufacturers also report that 200 layer houses for cage-free production have been or will be completed during the second half of 2006 and the first half of 2007 that will total about 2 million hens. This doesn’t mean that 7 million hens will be added to the nation’s flock inventory, however, because some of this housing may be to replace old depreciated houses or conversion from cage production to cage-free. “When we add all the pluses and minuses, we reach the conclusion that the flock size in 2007 could be very much like it was in 2006.”
