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VOL. 15 NO. 29
Proposal To Be Presented at State Poultry Meeting Wednesday
Can Egg Industry Stop Bust?
Ray Delano will speak on how
to avoid economic disaster from
1971 egg prices at the Pennsyl
vania Poultry Federation annual
meeting next week, Wednesday,
June 24 at the Hershey Motor
Lodge.
The United Egg Producers rep
resentative was a last minute
insertion into' the program this
week as the deep concern by
leading poultrymen in Pennsyl
vania and across the nation in
regard to the coming egg bust
has deepened and spread.
Delano will speak at 3:15 p.m.
on the subject: “1971 Egg
Prices?” How Egg Producers Can
Avoid Economic Disaster.”
(A Lancaster Farming exclusive
news analysis.)
In a page 1 article in Lancaster
Farming on April 4 after the
post-Easter 12-cent drop to the
37-38 cent range, Delano pre
dicted- that short term prices
should hold at that range. But
Delano also predicted that if the
sharp increase in egg-type chick
hatch set so far in the year was
not stopped, the egg industry
would be in serious trouble later
in the year Since Delano’s com
ments the hatch has continued at
the high levels Delano warned
against.
In a letter to members of the
Pennsylvania Poultry Fedeiation
this week, Donald E. Horn, fed
ei ation president, announced
Delano’s speech as foIIows
“IMPORTANT' LEARN HOW
We Introduce New UEP Egg Market;
Ray Delano Explains How It Functions
Lancaster Farming this week
introduces the new United Egg
Producers market
Launched nationally in May,
the new market was reported
“unrepresentative” due to lack
of adequate data for the North
east, our area, in the initial
weeks.
But in the past couple of weeks
the early problems have been
overcome, according to local egg
authorities, and Lancaster Farm
ing introduces the new market
as a regular service
What is the new UEP egg
market’ How does it differ from
the existing Uinei Bany
market’
The following explanation is
based on comments Puday by
Ray Delano, who will speak
Wednesday at the Pennsylvania
Poultry Fedeiation meeting
The Uiner Bauy puce is the
pi ice one dealei is willing to pay
anothei dealei It is a wholesale
puce
The UEP price is the price
fiom the packei to the pioducei
It is the producer paying price
The UEP price is the net price
to the producer from the buyer
Y O U CAN PARTICIPATE
WITH OTHER MEMBERS OF
THE EGG INDUSTRY IN PRE
VENTING DISASTROUS EGG
PRICES DURING THE COMING
MONTHS. The information you
read in the following paragraphs
can be of vital importance to you
as i member of the egg produc
tion industry. We encourage you
to read this letter in detail and
takerthe initiative to participate
at the described June 24 meeting.
“The egg production industry
has notoriously followed a
‘Boom and Bust’ pattern for the
last decade. The price cycle of
the 1967 period was disastrously
low with some of the farm puces
in Pennsylvania being as low as
$22 as an aveiage price for
flocks that were in production for
eight months By early 1970 the
prices went to the other extreme,
peaking out at $.63 per dozen.
These higher egg prices helped
to balance the losses of 1967.
“According to USDA figures,
egg type chick production is up
18 per cent over 1969. All knowl
edgeable maiketing people feel
that the poultry industry may be
facing the lowest egg prices in
1971 in the history of the indus
try. One expert says that unless
corrective steps are taken to re
duce overproduction, the 1971
prices will make 1967 look as
though the industry was rela
tively prosperous.
“About a year and a half ago
egg producers formed a national
Large Medium Small
Regions June 16 -18 June 16 -18 June 16 -18
Northeast 30 32% 25 26 12 16
Northwest 24 29 19 24 12 12
Central West 23 27 18 22 11 11
Southwest 22 26 17 21 11 11
Midwest 27 29% 23 24 11 12%
Southeast 28 31 24 25% 14 15%
National average 27 30 23 24% 12 14
The UEP notes that these prices are “recommended pay
ing. prices for United Egg Producers members” and that
the regions represent UEP regional members.
for Grade A eggs on a grade inventoiy loss; and piofit to the
yield basis, picked up at the farm packei
nest um
(For story on Urner Barry
plans to explain innovations in
its own market, see page 11.)
To compaie the two puces, to
stait with the UEP price and ai
uve at the Uinei Bauy puce
would lequue addition of the
following costs by the packei
tianspoitation fiom the faim to
the piocessmg plant, use of the
case m tianspoitation, labor,
overhead and other processing
costs, case, material and trans
portation in shipment to market;
Lancaster Farming, Saturday, June 20,1970
organization which is known as
United Egg Producers (UEP)
This organization is confronted
with a real challenge in trying to
develop a ‘price discovery sys
(See page 6 for an analysis
of the present egg market
by a local man.)
tem’ and to keep egg production
in balance with demand. The
UEP Board of Directors had an
emergency meeting on June 9 to
formulate a positive action pro
UEP Adopts Program Monday
In Atlanta To Hit Egg Bust
A sweeping emergency pro
gram designed to help egg pro
ducers achieve voluntary com
pliance with USDA production
guidelines for 1970 was an
nounced by United Egg Pro
ducers in Atlanta on June 15
At a meeting to announce
UEP’s recommendations to allied
industry leaders, a UEP spokes
man pointed to published produc
tion and hen population figures
and said that the industry is
“continuing its headling plunge
toward economic disaster in late
1970 and all of 1971.”
The spokesman stated that
“only drastic and immediate vol
untary action by the egg industiy
The Uinei Bany wholesale
puce is based on a 30-dozen case
of loose giaded eggs which aie
sized but not checked foi quality
The aveiage person would not
accept these eggs without the
added expense of giadmg
The UEP puce allows foi the
packei to do this giadmg
Delano piojects that in the
long lun, the pioducei puce wall
leflect a tiue value and will be
come a “veiy icalistic price set
up ”
A price gathering system has
(Continued on Page 11)
gram that egg produceis can fol
low to avoid disastious egg
puces in 1971
"Mr. Ray Delano, affiliated
with United Egg Producers, has
been invited to appear on the
Federation’s Annual Meeting
Program on June 24 for the pur
pose of explaining this important
plan of action to the egg pro
ducers of Pennsylvania.
“We sincerely urge you to at
tend this meeting and learn how
jou can participate in this plan
- can save the industiy’s small and
i- medium-sized operators from
i- extinction.”
n The action proposed by UEP to
i- the industry follows the recom
i- mendations laid down by the
USDA Guidelines through a four
; step program:
1 1. Cup U. S. Egg Production by
- 8 per cent immediately by killing
- oft old hens. One way of doing
s this would be to kill off all hens
! over 10% months in pi eduction.
; 2. Hatch ZERO pullet chicks in
; August, 1970
3 Hold placements for July, ;
; Septmeber, Octobei, Novembei,
• and December to 1969 levels
r 4 Hold molting nationally at
the same peicentage for the
period July 1 December 31,
1970 that were molted January 1
—June 30, 1970
Without this action, UEP says
a 10,000 bird operation stands
to lose $17,100 for the 18 month
period of July 1,1970 —Decembei
31, 1971 while a 100,000 bird
operation would lose $171,000
If the guideline actions aie
’ taken, UEP says the same opera
tions would show a profit of
$11,400 and $114,000 respetively
But, by avoiding the loss, UEP
says the net gain would actually
be $28,000 and $285,000 respec
tively.
These UEP loss projections are
based on a large market whole
. sale quote of 37.3 cents a dozen,
reduced 13 cents to make an
average farm price and another
2 cents to account for suiplus
conditions for a net yield of 22 3
; cents F.O B farm from July l,
1970 through December 1971
: At the same time, UEP esti
; mates pioduction costs will ave
: icge 28 cents a dozen foi a net
loss of 5 7 cents a dozen
t If the industiy follows the foui
: steps outlined by UEP, UEP
estimates the wholesale laige
; quote in the 18-month peuod will
aveiage 44 8 cents a dozen and
: theie will be no 2 cent loss toi
I surplus conditions, leaving an
- average farm puce of 31 8 cents
At the same 28 cent cost foi
the period, UEP projects a 3 8
> cent a dozen profit under the
guidelines, instead of the 5 7 cent
12.00 Per Year
designed to pi event disastrous
egg puces in 1971. In addition to
hearing about the UEP plan ot
action, you will also have the
opportunity of hearing the other
excellent speakers scheduled on
the program,” Horn concluded.
Other subjects slated for the
day, which begins at 10 a.m., in
clude poultry housing, legislation
and regulations affecting the in
dustry, the future in the 1970 s
anc piesentation of awards.
(Continued on Page 7)
a Cozen loss if the guidelines are
not followed.
The UEP notes that the profit
' figures projected from carrying
out the UEP program nationally
are based on reducing egg pro
duction by five per cent na
tionally.
Unless the industry strives to
meet the guideline goals, UEP*s
Statistical Department predicts
theie will be 3272 million pro
ducing hens by December 1.
1970 This repiesents an increase
oi 13.9 million over the average
hen population for July-Decem
bei 1969 The USDA’s guideline
would yield an increase of only
4 7 million over the 1969 figure.
The difference between the
guideline figure of 318 0 million
hens and UEP’s estimate is 9.2
million
UEP says that the increase
o> er the guideline figure would
icsult in a weekly surplus of
over 100,000 cases of eggs (30
dozen to the case) a surplus
that would have ruinous conse
quences for the entire industry.
At the June 9 emergency meet
ing of UEP’s board in Atlanta,
directors unanimously voted to
lecommend the program to the
industry The board also gave
overwhelming support to a mo
tion to spend up to $lOO,OOO to
promote the program.
Iviemueis of UEP's Executive
Committee in attendance at the
meeting were Don Nicolaysen,
president, Fied Adams, vice
pi esident, Mike Hirth; Maurice
Stein, and R L Rossiter
Regional and local informa
tional meetings are being sched
uled throughout the United
Slates dm mg the balance of Juno
to mtoim egg ptoducers about
the piogiam Condimed meetings
to date aie Atlanta, Roanoke,
Raleigh, Sh’evepoit, Los An
geles Saciemenlo, Seattle, Lan
sing, New York, Maine and New
Hampshue Many other meetings
aie in the planning stages (See
Page 1 story on Pennsylvania
meeting Wednesday.)
A spokesman pointed out that
producers selling off old hens
(Continued on Page 6)