Strong and volatile egg and egg product prices are expected to continue, while cocoa powder prices should hold about steady in coming months, according to trade sources.
Although egg prices could weaken modestly in the next few weeks, overall values will remain strong because "there is more demand than supply," said Robert Kellert, senior vice-president of Bender Goodman Co., Inc., Jersey City, N.J.
"The laying flock is down substantially and dried egg stocks are about 10 million lbs below normal working levels," Mr. Kellert said. He also expects egg exports to Europe will resume after the Christmas holiday, especially in view of the weak U.S. dollar. Strong exports late last year and earlier this year were supportive to shell egg and breaking stock prices.
In its October World Agricultural Supply and Demand Estimates (WASDE) report, the U.S. Department of Agriculture projected prices for Grade A large eggs in New York to range from $firstname.lastname@example.org a dozen in the fourth quarter, down from $1.19 in the third quarter but well above the fourth quarter of 2006 when the average was 89c. For the year, table egg prices were forecast to average about $1.08, up 50% from the 2006 average and compared with 89@97c forecast for 2008.
While usually priced well above breaking stock eggs used in the manufacture of dried egg products, breaking stock prices typically follow graded egg prices. Some breaking stock is channeled to retail when graded egg prices are high or in tight supply.
Breaking stock eggs currently are nearly three times their year-ago prices and are the highest since March 2004. Shell eggs broken in the first eight months of 2007 totaled 1,333 million dozen, down 2% from the same period of 2006, according to the latest U.S.D.A. data.
Although not at record levels, prices for dried egg products have been historically high much of the summer and fall. Dried egg yolks, for which supplies have been tightest most of the year, were the highest since December 2006. Dried egg blends were at their highest level since December 2003, and dried whole eggs since April 2004. Only dried whites were currently off their highs of the year set in May.
"Liquid egg yolks are still very tight," Mr. Kellert said. He noted seasonal demand for yolks to make eggnog would further tighten supplies.
Cocoa powder prices seen stable
Cash cocoa powder prices, meanwhile, are expected to hold mostly steady in 2008, with volatility limited to cocoa futures prices. Prices for 10% to 12% butterfat powder have been in the 53@57c a lb range since mid-September and compare with 47@55c a year ago.
"We should see a continuation of what we have been seeing in cocoa powder," said Judith Ganes-Chase of J. Ganes Consulting, Katonah, N.Y.
Global cocoa supplies remain adequate and demand is strong, Ms. Ganes-Chase said. Even a large dip in U.S. third-quarter cocoa bean grind was of little concern. Instead, the decrease was an indication that the U.S. is importing more cocoa and finished chocolate products from Europe, rather than importing cocoa beans to grind here, she said.
U.S. cocoa grind in the third quarter plunged 14% from the same period in 2006, according to data from the Chocolate Manufacturers Association. Cocoa butter melted during the quarter declined 24% and chocolate liquor melted fell 34% from year-ago levels.
But European cocoa bean grind in the first three quarters of 2007 was up 5% from the same period in 2006, according to European Cocoa Association data, and has increased every year since 2002. In the third quarter alone, European cocoa bean grind was up 8% from a year earlier.
Global cocoa supplies remain ample despite sporadic talk about disease (black pod) problems in some prime producing areas of West Africa, especially Nigeria, the world’s fourth largest cocoa bean grower. Recent protests from cocoa bean growers in top-producing Ivory Coast briefly slowed cocoa bean deliveries but did little to reduce the overall supply, according to press reports.
This article can also be found in the digital edition of Food Business News, October 30, 2007, starting on Page 34. Click