www.WATTpoultry.com MAY ²⁰⁰⁸ volume 1 13 number 5

Executives Optimistic on Prices 1

Industry News 5

Electronic Media Key to AEB Communications 6

How DDGS and Glycerin Apply to Layer Diets 8

Midwest Poultry Convention Showcases New Products 10

To Protect Freedom, Egg Farmers Must Build Trust 12

Calendar 14

Marketplace 14

FARM PRICES RECEIVED BY FARMERS,

_{ALL EGGS, $/DOZ.}Executives Optimistic on Prices

But sky-high grain prices cloud profit picture.

Year 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005` 2006 2007 2008

1st Quarter
.646
.625
.661
.551
.891
.540
.651
.575
.482
.688
.779
.748
.558
.650
.640
.607
.777
.750
.702
.690
.608
.670
.658
.671
.965
.547
.593
.841
1.327*

By Edward Clark, Editor

In normal times, the strong egg prices likely to occur in the second half of 2008 should equate to strong profits. But these are not normal times, due to the double whammy of skyrocketing feed and energy costs.

“I’m hoping that I don’t give back in the second half the profits I’ve made in the first half,” says Ron Truex, president of Creighton Bros., Atwood, Ind. “We have to be prepared for marginal profits or loss-es in the second half of this year.” In 2007, in contrast, the bulk of profits for the year were made in the second half of the year.

In late April, “our egg prices went down 50 cents per dozen, but our costs went up 20 to 25 cents,” he says. Truex adds that with such grain price volatility, for almost the first time in decades of being in the business, he “doesn’t have a single clue” how to go about forecasting the profit picture for the second half of 2008.

Truex thinks that “if prices fall below $1.30, I’m not sure we’ll be profitable.” He notes that egg prices held one week after Easter and then crashed all of a sudden.

“I don’t know how things changed that fast,” he states.

Corn Could Be $5 or $7

What clouds the profit picture, Truex says, is uncertainty over where grain, particularly corn, prices are headed. He recently attended a meeting in which an agricultural economist made equally convincing arguments on why corn prices will be either $5/bu. or $7/bu. later this year. One factor making him nervous on corn is that in his part of Indiana, no planting had been done by April 21 due to wet conditions. “Corn is not getting in the ground,” while last year, which was a dry spring, planting had been completed by May 6.

“Everything we used to use to plan is gone,” he adds. Adding to his profit concern is the fact that trucking costs are increasing so dramatically. One reason why egg profitability was not negative like pork last year, Truex says, is that egg producers lost so much money in 2005 and 2006, thus there was a cutback in production last year.

As has been the story for months now, Truex is not yet seeing much of an in-

The above chart compares egg prices for
the first quarter in years listed and shows
that prices in 2008 were the highest go-
ing all the way back to 1980.
Source: USDA. *estimate