Relatively strong retail demand in May possibly causing producers to expand production of shell eggs for retail.

Krissa Welshans, Livestock Editor

July 17, 2020

2 Min Read
White eggs lined up in neat rows

The latest U.S. Department of Agriculture’s “Livestock, Dairy, and Poultry Outlook” reported that the table egg layer flock continued to contract in May, reaching an average of 321.6 million layers, or 4.5% lower than 2019. USDA economists Kim Ha and Grace Grossen noted that the reduction can largely be attributed to the sharp decrease in foodservice demand for processed eggs, which led egg processing companies to reduce their flocks.

Meanwhile, however, retail demand remained relatively elevated in May, which USDA said suggests that shell-egg companies producing for the retail sector were unlikely to have made significant reductions to their laying flocks.

The June 1 layer inventory also points to another likely month-over-month decrease in the layer flock, USDA added.

The table egg lay rate also decreased substantially for the second consecutive month, falling to 78.8 eggs per 100 layers per day in May—a year-over-year decline of 2%. Ha and Grossen said the decline in the lay rate was driven by an increase in the share of layers being molted.

“Layers undergoing molting are included in the total layer inventory but produce fewer if any eggs during this time, pulling down the average number of eggs per layer.”

Since retail demand was still relatively strong in May, USDA said producers were likely seeking to expand production of shell eggs for retail.

“As it takes at least five months to add new hens to the laying flock before they can produce eggs, shell-egg producers were likely molting more birds to retain them for additional laying cycles in order to increase production.”

Given the level of market uncertainty stemming from COVID-19, the economists said it is also possible that producers were molting more birds—with the option of retaining or culling molted birds as market conditions necessitated—in the event that demand increased suddenly.

“However, it is expected that as the share of birds being molted decreases, lay rates will likely recover.”

The decrease in the table egg layer flock and the lay rate resulted in a 6.4% year-over-year decline in May table egg production, which is estimated at 655 million dozen. Based on expectations that the table egg layer inventory and lay rate will remain relatively low in June, USDA revised the Q2 table egg production forecast down to 1,940 million dozen.

In the second half of the year, USDA expects that the layer flock will gradually expand consistent with seasonal patterns as demand increases heading into the holiday season but will likely remain below year-earlier levels.

A smaller expected layer flock was the basis for decreasing the second-half production forecast to 3.995 billion dozen. In sum, USDA’s 2020 table egg production is forecast at 7.983 billion dozen, a decrease of 3% relative to 2019. The 2021 production forecast was decreased to 8.135 billion dozen, an increase of 2% relative to 2020 forecast production.

About the Author(s)

Krissa Welshans

Livestock Editor

Krissa Welshans grew up on a crop farm and cow-calf operation in Marlette, Michigan. Welshans earned a bachelor’s degree in animal science from Michigan State University and master’s degree in public policy from New England College. She and her husband Brock run a show cattle operation in Henrietta, Texas, where they reside with their son, Wynn.

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