News for the Egg Industry Worldwide
November 2007/Volume 112 Number 11
2008: Lower Prices than ‘07 Likely, but Still a
Good Year for Producers
Industry News
UEP Braces for Animal Welfare Battles
Inspire your customers
Calendar
Marketplace
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www.wattpoultry.com
2008: Lower Prices than ’07 Likely,
but Still a Good Year for Producers
Egg Price/Supply Relationships— 10 years of change, 11 years of prices
Eggs USDA farm prices-UB MW Lg Price Produced Production all eggs U.S.
( cts.doz) Change % (billions) Change % (cts/doz)
1996 90.9 64.7 66.5
1997 83.7 - 7.92 65.5 1.24 57.8
1998 78.6 - 6.09 67.1 2.44 52.1
1999 68.1 - 13.36 70.0 4.32 43.6
2000 71.2 4.55 71.4 2.00 46.9
2001 69.3 - 2.67 72.9 2. 10 42.9
2002 71.0 2.45 73.8 1.23 42.0
2003 92.2 29.86 74.5 0.95
2004 86.7 - 5.97 76.4 2.55 53.4
2005 68.5 -20.99 76.9 0.65
2006 75.4 10.07 77.7 1.04 40.7
2007 117.0 55.17 76.3 -1.80
2008 104.0 - 11. 11 77.7 1.83 est
Source: Don Bell, University of California-Riverside. Note: Both 2007 and 2008 prices listed are estimates.
BNy Edward Clark, Editor
ext year is likely to be another profitable year for egg producers, though
not quite as profitable as 2007. The
big reason why: the all-time record prices of
2007 are likely to spur investment in new facilities and producers will have the incentive
to increase their houses to full capacity.
In his annual outlook completed in late
October, Don Bell, poultry specialist emeritus at the University of California-Riverside, forecasts the average Urner Barry
large Midwest egg price for 2008 to be
$1.04/dozen, 11 cents below his estimated
price for where 2007 will end up: $1.15.
His forecast for 2008 would still be 29 cents
per dozen higher than 2006’s 75 cents per
dozen, and 35 cents higher than 2005 levels.
In other words, 2008 is likely to be another
good year for egg producers.
Bell says that profits in 2007 have been
the highest in recorded history. For example, Midwest profits in September were 50
cents per dozen, or 90 cents per bird, and
in Bell’s view, “you’ll likely never come up
with anything like that again.” He calls profits of those levels “fantasy land, and we’re
about to leave fantasy land.”
In contrast with this year’s 2 percent
reduction in the flock size, Bell looks for
a 1.8 percent increase in the flock size in
2008, and he says that “a downward curve
in price with increasing production is what
everyone expects.” Bell’s forecast calls for
bird numbers the end of 2008 to total 294.1
compared to 287.6 the end of this year. He
adds that more birds, plus a hatch that is up,
equals a lower price. In making price estimates for 2008, Bell used history as a guide,
but excluded 2007 because it was such an
exceptional year. In his view, producers will
likely get houses “as full as they can,” even
though “with fewer birds the industry would
make more money.”
All this said, Bell notes that making estimates for 2008 is very difficult because
2007 has been such an extraordinary year.
He adds that production changes account
for only 25 percent of price changes, so
many factors will end up influencing prices
in 2008.
