Don Bell of the University of California, in association with the Egg Industry Center at the University of Iowa, has released an August 2 summary of flock size and egg price projections.

The estimates for flock size during the remainder of 2010 denote a higher number of replacement pullets and reduced molting. Values for replacements are based on a five-year rate from 2005–2010, averaging 5.80% of the national flock per month. Depletion over the same period is calculated on a 1.85% per month average and the value for “dead and missing” for 2010 and 2011 was set at 4.32% per month. Yearly average counts for hens producing table eggs were 280.2 million for 2008 and 280.4 million in 2009. The June 2010 average for the number of laying hens was 280.0 million, an increase of 3.0 million birds over the 2009 value of 277.0 million.

In comparing the actual and estimated egg prices from January 2010 onwards, there appears to be a close correspondence between the actual monthly average egg price and the forecasts developed during the three preceding months. Projections as much as seven months in advance have tended to overstate prices.

Although the August projection of egg prices denotes an increase in revenue, it is not expected that margins will improve since there is an obvious trend in escalation of feed prices. This is in part associated with an increase in the cost of corn, which exceeded $4.00 per bushel at the beginning of August. A number of factors are influencing the price of corn including the United States Department of Agriculture revision in the 2010 harvest, the fall in the value of the U.S. dollar and a delay in planting due to unseasonably wet weather in Argentina.

The table below shows the respective values for hen numbers and Urner-Barry Midwest large grade for September 2010 through May 2011. Values are based on an upgraded model which is revised monthly.

Flock Size & Price Projections 

Month

Flock Size

Million

 

UB Midwest

c/dozen

September

283.9

 99.2

October

288.2

 97.2

November

289.7

120.4

December

291.9

119.4

January 2011

291.8

111.3

February

292.1

101.2

March

292.4

110.3

April

292.3

 94.1

May

291.5

 83.0

Source: Don Bell, University of California