The latest summary of costs reflecting August 2009, distributed by Don Bell of the University of California, Riverside confirms a restoration to profitability following the down months of May through July, given an average U.S. production cost of 56.7 cents/dozen and a USDA price of 57.9 cents/dozen (Urner-Barry Midwest price of 99.9 cents/dozen) profit attained 1.2 cents/dozen or 2.2 cents/dozen respectively.

Chart 1: Monthly profits U.S. vs. Midwest 2009 

The beneficial effect of stable to declining feed cost ($205/ton July; $201/ton August) was largely responsible for the improvement coupled with a higher realization for the month. During the preceding three months loss averaged 16.9 cents/dozen with USDA cost of 43.9 cents and a 60.8 cents/dozen production cost. It is noted that effective January 2009, production costs incorporate a value of 14.7 cents/dozen for labor, depreciation and interest.

Chart 2: U.S. vs. Midwest 2009 -- Producer Egg Prices 

Projections of national flock size show a seasonal peak value of 281.3 million hens on December 1. During the January to June 2009 period, flock size averaged 282.3 million hens. For the corresponding period in 2010, Don Bell projects a 1.1% decrease to an average of 278.3 million hens.

The August to December 2009 UBMW quote is forecast to be 105.2 cents/dozen with a range of 99.9 cents/dozen in August rising to 117.3 cents in November and December. Of this year, the forward projection for the first half of 2010 provides an average of 101.5 cents/dozen with a range of 90.1 cents/dozen in May from a high price of 109.7 cents/dozen in January.

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Since breakeven, UBMW will be in the range of 100 to 103 cents/dozen, losses are anticipated for most producers of generic eggs during the second quarter of 2010.