Egg product prices off highs but well above year-ago levels

by Ron Sterk
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KANSAS CITY — While still well above year-ago levels in most cases, egg and egg product prices have dropped sharply from highs set in late March and early April and are expected to trend lower through the third quarter of 2008.

"Prices are giving some ground but not collapsing," said Robert Kellert, senior vice-president of Bender Goodman Co., Inc., Jersey City, N.J.

Breaking stock egg prices were quoted in Food Business News at 65@67c a dozen for nest runs last week, down 44% from the late March high of 116@120c but 14% above the year-ago price of 57@61c. The drop in check eggs was even more dramatic with prices last week at 52@54c a dozen, down 94% from the high of 101@102c but still 18% above last year’s value of 44@45c.

Table or retail egg prices averaged $1.59 a dozen for large in New York in the first quarter of 2008, up 51% from the same period last year, the U.S. Department of Agriculture said in its latest Livestock, Dairy and Poultry Outlook.

"With the Easter holiday in late March this year (rather than in April), egg prices are expected to decline seasonally in the second quarter," the U.S.D.A. said. New York retail eggs were forecast by the U.S.D.A. to average from $1.27@1.33 a dozen in the second quarter and drop further in the third quarter to average $1.06@1.14. Fourth-quarter 2008 prices were expected to be seasonally firm at 4@6c a dozen.

Egg prices typically peak around Easter with breaking stock prices following retail prices higher as some breaking stock is moved to the retail market. Breaking stock also typically follows retail prices lower after Easter demand subsides, as was the case this year.

Egg production was probably peaking, Mr. Kellert said, adding that prolonged cool spring weather and still slim profit margins have benefited laying operations. Soaring feed prices and lower egg prices have pushed producers to near breakeven levels. The "best" producers still were making money, he said, although "there doesn’t seem to be much new production." He expected weakness in egg prices through the June-July quarter.

Talk of egg exports was evident in the market last week, although it was not confirmed if a sale had yet been made. Trade sources said the weak U.S. dollar and recent lower egg prices made exports likely. In the past exports have tended to reduce egg supply enough to reverse a downtrend in domestic prices.

Dried, liquid and frozen egg product prices have followed egg prices lower since early April.

The largest declines have been in whole eggs with dried whole quoted by Food Business News at $4@4.20 a lb last week, down 16% from the April high of $4.75@4.85. Frozen whole egg was quoted at 93@95c a lb, down 25% from $1.24@1.30 and liquid whole was at 72@73c a lb last week, down 37% from $1.13½@1.17 a month ago.

Yolk products have seen the smallest decline since early spring highs and also were the most above year-ago prices. Dried yolk was quoted at $3.30@3.45 a lb last week, down 6% from $3.50@3.60 in early April but 100% above the year-ago price of $1.65@1.80. Frozen sugared yolk last week was $1.49@1.51 a lb, nearly equal to the April high and 77% above the year-ago price of 84@89c. Liquid yolk last week was $1.34@1.35 a lb, off just about 1% from $1.36@1.39 in April but 97% above 68@70c last year.

Price changes for egg whites fell between whole egg and yolk prices. Dried whites were $6.25@6.45 a lb last week, down 9% from $6.85@7 as the April high but up 24% from $5.05@5.40 a year ago. Frozen whites were 85@88c a lb last week, down 13% from the high of 98@104c but 16% above 73@78c last year. Liquid whites were 62@65c a lb last week, down 27% from 85@90c as the high but still 5% above 68@70c last year.

"Whites look weak," Mr. Kellert said, noting some food processors were "tired of paying $7 a lb" for whites and questioned why they used them at all.

Egg processors have been working with low inventories because of volatile prices and many have only two to three weeks’ supply and are unwilling to offer product more than 60 days forward, trade sources said. Demand in general was seen as fair to good for egg products last week.

This article can also be found in the digital edition of Food Business News, May 13, 2008, starting on Page 22. Click here to search that archive.

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