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News and analysis on the global poultry
and animal feed industries.
on June 11, 2010

Egg production, price forecast up

Revised projection model used

The Egg Industry Center at Iowa State University has issued its mid-June flock projections based on revised models. By refining the procedures developed over the years by Don Bell at the University of California, Riverside, a fairly close approximation of future prices can now be obtained. This takes into account pullet placement, size of the national flock and historical relationships between seasonal price and flock level.

The first of the month estimates of the size of the U.S. table egg population predicts an increase from 279.2 million in June to 291.8 in December 2010. Thereafter population rises in 2011 from 291.8 million hens in January to a total of 300.5 million hens in December of that year.

The U-B Large grade Midwest quote is projected to increase from 96 cents per dozen in June 2010 to peak at 120 cents per dozen in December of this year. Thereafter prices will follow the traditional first quarter pattern with a drop to 94.7 cents.

Maro Ibarburu has developed a new format for projected prices, involving a monthly egg price coefficient which relates monthly cost to an eight-year pattern. Evaluation of results for 2010 shows a fairly close approximation for two months ahead, but estimates made before April for subsequent months were optimistic, and did not take into account the severe drop after Easter. May projections covering the remainder of 2010 and for the first quarter of 2011 appear conservative and are in all probability realistic for commodity eggs.

The challenge facing the Egg Industry Center will be to reconcile hen population with demand. To date, projections of price have been based on production and have assumed consumption values as forecast by USDA using their econometric models. Reconciling demand with supply will provide a more accurate indication of future price and can be used by the industry to implement placement and depletion programs which can avoid large swings in profitability.

Year

Month

2010

June

2010

July

2010

Aug.

2010

Sept.

2010

Oct.

2010

Nov.

2010

Dec.

2011

Jan.

2011

Feb.

2011

March

2011

April

Projection  of Hen Population (Millions)

279.2 

278.8 

279.8 

282.8 

287.2 

289.2 

291.8 

291.8 

292.0 

292.0 

292.0 

Projection of U-B L Mid West (c/doz)

90.6 

92.7 

96.7 

99.8 

97.8 

121.2 

120.2 

 112.0 

101.8 

111.0 

94.7 

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