Crystal ball has 2008 looking like another profitable year

The very bright factor coming out of 2007 and carrying into 2008 is that the industry, both shell eggs and egg products, enjoyed record-breaking prices throughout the year. The good news was that egg producers and processors made money, despite high feed costs. It was evident at meetings and conferences held throughout 2007.

The key reason for a profitable 2007: Despite the fact that the U.S. population grew by some 3 million, the number of layers decreased by 4 million. Fewer hens make for a better price at the marketplace. In addition, egg producers maintained lower flock sizes to better accommodate the summer season, which historically has slower egg sales.

Egg producers also continued to maintain their schedules for the increase of cage space for their hens in compliance with the United Egg Producers (UEP) Certified Animal Welfare program. This meant fewer hens housed, which brought the national inventory down. Other pertinent factors that contributed to the year-long price advantage were exports of both shell and egg products, and decreased egg drying inventories. And with more corn going into ethanol and the resulting higher feed costs, producers were reluctant to increase their flock size.

2007 Factors Continue in 2008

Many of the factors that created the prosperity in 2007 should continue into 2008. Producers are continuing the UEP program for cage space increases, ethanol production seems to be continuing and the export markets should continue to be a possibility. Predictions, however, are for a slightly larger layer flock inventory to take place in 2008. Current numbers from Don Bell, poultry specialist (Emeritus) at the University of California-Riverside and UEP indicate the number of birds producing eggs will increase about 3 percent to 5 percent.

Strategists are monitoring all of the factors that contribute to these predictions on a monthly basis, but as of right now, the outlook is good for a favorable price for the year. Activities by the animal welfare groups throughout the country also can cause a wait and see attitude with producers relative to their expansion plans.

In most cases, the ever-present and growing initiatives by animal welfare activists dominated 2007 producer meetings throughout the country. With the elimination of all animal agriculture their ultimate goal, these well-heeled, strong-voiced groups are slowly chipping away at animal food production industries by asking them to change methods that have been in existence for many years, providing the most efficient and nutrition-rich food supply in history. New methods create additional cost and have added nothing to animal welfare. Cost of food has suffered, affecting the part of the population that needs the efficiency the most.

Through the UEP's Scientific Committee, that has been working for years on layer hen cage guidelines, another set of guidelines is now available for the non-cage producer. The new guidelines have been incorporated into the UEP Certified program. Many of the egg farmers that previously concentrated on cage facilities have built or renovated barns to accommodate non-cage birds.

Attempt to Educate Those Being Pressured

As part of the growing concerns regarding the activist efforts, the UEP organized a conference in Denver to help educate the people that are being pressured. Grocery and foodservice people from all over the country attended the two-day event and learned first-hand that producing eggs in cages, under the UEP Guidelines, is a safe, sanitary and humane production method. The initial part of the meeting was a visit to a nearby egg production facility providing a hands-on view of the process. Some of the foodservice people attending were from major universities where activists are attempting to convince them to purchase non-cage eggs for their school programs. A concern is that the cost of food preparation at the schools will go up considerably. UEP intends to hold additional conferences of this type to educate consumers that the activists are wrong.

Another major initiative being made by animal rights activists is taking place in California. If successful, it could impact the entire industry for some time to come. The Humane Society of the United States is trying to obtain enough signatures in the state to place a referendum on the ballot in 2008. The referendum is mainly aimed at the egg industry and would ban cages in California. If this would pass, the industry in the state would be virtually shut down and California would be forced to bring in eggs from other states or even other countries. Along with help from UEP and the American Egg Board (AEB), California egg producers are joining together to combat this new concern.

Colorado is also facing the prospect of legislation to end cage layers. The UEP conference in Denver included some legislators and other state government people who could influence this endeavor. The year 2008 will prove to be interesting from an animal rights activist perspective. The entire industry will be called upon to help fight these industry-altering efforts.

No Cage-Free Inclusion in Farm Bill

National legislators have been working on a new Farm Bill. The egg industry has been active in advising and suggesting through its Washington Office. It looks now like a Farm Bill will not be voted on until the first part of 2008. Through lobbying efforts by the industry, it appears there will not be any cage-free inclusions in the bill. Activists did their best to include their causes into the bill. The industry has been advised to continue working hard with legislators in both the animal rights and environmental areas and to emphasize that scientific studies along with audit procedures have proven to be the answer to the best way to handle animal food production.

The AEB, with Joanne Ivy as its president, continues to bring the message to the public about the value of eating eggs. Through its many programs that feature egg use, both shell and products, consumers from moms with kids at home to chefs and food manufacturers, are continually reminded of the benefits of this natural food. AEB has developed a new strategic plan that was introduced at the November meeting. The plan includes all of the programs that AEB is working with and ways to increase their impact on the consuming public. The basic mission of the plan is to increase the demand of eggs and egg products in the domestic marketplace.

AEB also funds and now operates the Egg Nutrition Center (ENC) and Egg Safety Center (ESC) in Washington, D.C. The ESC has developed strategies to assist the public in case of disease outbreaks in the industry as well as many guidelines for the safe handling and transportation of eggs. The ENC continues its research projects to discover and educate various segments of consumers about the nutritional value of eggs. Basically, the ENC continues offensive, rather than defensive, efforts in showing the extraordinary benefits of eating eggs.

In 2007, there was a consistent growth in export sales of both shell eggs and egg products. The weak dollar helped in this area and exporters expect the trend to extend into 2008. According to Jim Sumner of the USA Poultry and Egg Council, exports in 2008 should exceed $137 million for both categories. The International Egg Commission meeting will be held in China in 2008, which should be a boost to the U.S. egg industry. AEB also has a very active advertising program for both shell and egg products. In addition, a public relations effort is consistently working on new and different ways to promote eggs.

Organic Egg Sales Growth May Be Slowing

Specialty egg production and marketing is still at about the 5 percent level of total eggs produced. Reports say that the growth of organic type eggs may slow somewhat due to the availability of organic grain. This shortage has driven the price of organic eggs very high and could create an increased demand for natural floor egg production. This information comes from Gil Dedrick, President of the Broiler and Egg Association of Minnesota. There are many factors out there that may change the numbers of specialty eggs produced. The egg industry will produce what consumers demand and this statement was prevalent at the UEP Conference of Grocery and Foodservice people. Should a foodservice facility opt for the more expensive eggs from non-cage hens, the industry will provide them.

In 2007, we announced the retirement of Lou Raffel, president of AEB and Al Pope, president of UEP. With one year under their belts, AEB President Joanne Ivy and UEP's President Gene Gregory have proven to be excellent replacements.

The challenges and opportunities are many for 2008. AEB and UEP with their talented staffs are addressing them with logical and scientific approaches. These two very different organizations often work together and pool their resources to accomplish what often times, seem impossible.