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AUGUST 2008 volume 113 number 8

Major increase in hen numbers anticipated by December 1 Bell reflects on future trends, high feed prices, animal welfare 4 Industry News 6 Information, news and dialogue 7 Morning Fresh Farms: a study in excellence 8 Study shows fungus achieves biological control of flies 1 2 What’s behind the feed cost escalation? 14 Calendar 16

Major increase in hen numbers anticipated by December

PROJECTION OF U.S. FLOCK SIZE
PROJECTION OF EGG PRICES

292

290

288

Millions of hens

286

284

282

280

278

276

274

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

2008 2009

160

140

Cents/dozen

120

100

Aug

Jul

Nov

Dec

Feb

Jan

Oct

Sep

2008

May

Apr

Mar

2009

Italic months-rounded.
Source: Don Bell, University of California, Riverside
Number of hens is expected to reach 291.1 million by
December.

Source: Don Bell, University of California, Riverside

Moderate rise in egg prices anticipated for November and
December followed by a rapid decline.

By Dr. Simon M. Shane, Editor

U.S. egg production costs increased 15 percent--from 63.9 cents per dozen in January 2008 to 73.22 cents per dozen in June--mainly due to escalation in feed cost. Those costs are part of the latest cost summary, flock size, and egg price estimates issued by University of California-Riverside Poultry Professor Emeritus Don Bell.

At the end of June, corn was quoted at $7/bushel compared to $3.50/bushel in January. Corresponding values for 48 percent soybean meal were $438/ ton and $265/ton. It is estimated that for every $1/bushel increase in corn, feed cost increases by 6 cents per dozen due to the concurrent escalation in other ingredients and the impact of pullet depreciation. The full impact of

the increases in corn and soybean meal were not reflected in first quarter due to the moderating effect of carry-over stock from 2007 and possible hedging by larger producers.

In reviewing the contribution margin, U.S. producers generated 58 cents per dozen for the first quarter of 2008 but this declined sharply to 14 cents per dozen in the past quarter. The 33

percent decline from $1.24 per dozen for the first quarter to 88.6 cents per dozen in the second quarter combined with the increases in feed cost reduced profi tability.