News for the Egg Industry Worldwide
September 2006/Volume 111 Number 9
Escalating Fuel Costs Hit Midwest,
but Region Retains Feed Advantage 1
Industry News 4
Promoting U.S. Egg Products Overseas
Amid the Al Crisis 6
El Salvador’s Egg Sector 10
Emerging Egg Technology 13
Marketplace 14
www.wattpoultry.com
Escalating Fuel Costs Hit Midwest,
but Region Retains Feed Advantage
products to distant markets. He says higher
transportation costs are a double whammy
for the Midwest because egg firms such as his
have to pay more to ship eggs to market, and
they have to pay more to get Styrofoam™
and other packaging materials trucked in.
Nationally, the cost of getting fresh eggs
to customers increased 1.6 cents per dozen
from the first quarter of 2004 to the first
quarter of 2006. For the Midwest, the cost
rose 1.85 cents in the same time frame,
notes Gene Gregory, vice president, United
Egg Producers, Atlanta. This may not
seem like a lot, but it comes on top of the
By Edward Clark, Editor “We’ve been able to recover some, but not losses most producers are suffering due to
D100%” of the additional costs, says Travis overproduction, says Gregory.
iesel fuel that costs 60% more than Lubitz, logistics manager for Golden Oval The transportation losses are not
two years ago and 20% more than Eggs,Renville,Minn.Yetwhiletransportation universallydistributedto Midwestproducers.
just a year ago has hit the Midwest costs are up considerably, he says fuel is still “I’m probably not a good one to talk to
egg industry hard. Producers are affected “a minor cost, but increasing. It has made an because it doesn’t affect us — all our eggs
by skyrocketing transportation costs impact on our bottom line, something we’re are sold f.o.b.,” says Richard Hall, general
wherever they are located, of course. But starting to watch more closely.” manager, Southwest Iowa Egg Cooperative,
since both fresh eggs and further processed Wayne Carlson, vice president of logistics Massena. However, he adds, “if we don’t
egg products must be transported great for Sparboe Companies, Litchfield, Minn., get fuel costs under control it will bring our
distances from the Midwest to major says that “all things being equal, higher fuel entire economy to a halt.”
markets, the fuel cost hike is particularly costs mean that Iowa and Minnesota lose Nooneinterviewedforthisreportsaysthat
burdensome on the major egg producing some of their historical advantage,” because high diesel fuel costs will cause Midwest egg
statesof Iowaand Minnesota. producers have to pay more to get egg operations to shut down, but some believe
it could determine where egg production
grows. Asked if high energy costs could
influence where Sparboe’s future production
facilities are located, the company’s Carlson
says, “very definitely. No question about
that.” Sparboe currently has operations in
Minnesota, Iowa, and Colorado. In terms
of importance, he says that energy issues
“are on par with labor and feed issues”
that companies such as his consider before
locating in a state.
