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26—Lancaster Farming, Saturda;
Low Egg Prices
By~4. Kermil Birth
Marketing Specialist,
Penn State
Is the egg industry starting to
build up to another surplus
situation before having an op
portunity to recuperate losses
from the unfavorable situation of
the immediate past? Reduced
slaughter of hens under federal
inspection and increased hatch of
chicks for laying flock
replacements in September
suggest a potential increase in
the number of layers in the
future.
Attempting to predict prices
and trends in the industry has
been a challenge. When reduc
tions in the number of chicks
hatched and pullets grown in
dicate price strength, producers
tend to reduce sales of hens.
Thus, more older hens stay in the
nation’s laying flock.
In 1972, through the week en
ding May 3 about 5.3 million more
layers were slaughtered under
federal inspection than a year
earlier, as compared to about 3.7
percent fewer between May 10
and October 4. Thus, by October 4
only about 1.5 million more
layers had been slaughtered than
a year earlier. Hens killed to
eradicate exotic Newcastle
disease are not included in USDA
slaughter information. However,
the numbers do influence the
data since these hens would have
been slaughtered. The additional
slaughter to date would not have
been as much as the numbers
actually killed, because of nor
mal mortality and age of the
layers.
Perhaps another reason
slaughter under federal in
spection has been declining
relative to a year earlier is
holding of hens to offset the loss
of layers killed due to exotic.
Newcastle disease on the west
coast.
Chicks hatched for laying flock
replacements in September were
about 3 percent above a year
earlier, but the total hatch
through September this year was
down 10 percent. Layers on farms
were 4 percent less than a year
earlier. The reduced number of
layers was offset in part by a 2
percent increase in the rate of
lay.
The proportion of forced molt
layers in the nation’s laying flock
has held about steady for four
months—July through October—
and ranged between 13.1 and 13.4
percent.
In November and December
r 1 Mile North of Terrt Hill on Route 897
r. November 25. 1972
fewer pullet chicks should be
available for housing as layers.
Thus, if slaughter in the next
month stays about the same as a
year earlier, there should be fc
further reduction in the nation’s
laying flock. In May about 15
percent fewer chicks were hat
ched for laying flock
replacements than a year earlier,
as compared to 12 percent fewer
in June and 6 percent in July.
Rate of lay continued to
average above a year earlier. But
it is questionable whether the
rate of lay will continue at this
higher level. Fewer pullets added
to the nation’s laying flock and
more forced molt layers tend to
reduce the rate of lay and are
price-improving situations.
Adding weakness to egg prices
are reduced military purchases
and increased supplies of frozen
and dried eggs. However, the
market for liquid eggs—not
frozen or dried—continues to
expand. Weather, consumer
purchases, and eggs used for
hatching of chicks for both laying
in '73?
and meat could each add strength
to egg prices.
The tendency to expand
production when prices improve
continues. Perhaps the question
in the minds of most persons in
the industry is “Will prices im
prove sufficiently to recoup most
of the losses incurred during the
low price period of late 1970, 71,
and 72 before trending down
ward?” This depends on the
industry. With today’s rather
highly concentrated industry and
increased number of hens per
production unit, the influence of a
small number of producers can
have a more significant impact
on changes in production and
prices than it did a decade or two
ago.
One cannot overlook the often
repeated statement, “It only
takes a small change, 3-4 percent,
in quantity of eggs available to
consumers to change from a
profitable to unprofitable
situation for a good portion of the
industry.” Production in Sep-
,'.V,
tember was about 2.5 percent
below a year earlier.
The increased forced molting
of hens has helped offset part of
the decrease in number of pullets
grown. Prices are averaging
above a year earlier. Egg prices
should continue to strengthen.
The situation next year depends
on whether the industry con
tinues to adjust production to
market needs at profitable
prices.
If the increase in hatch of
chicks for laying flock
replacements continues, as oc
curred in September and as in
dicated for October, without an
offsetting increase in sale of;
hens, prices could weaken by
February or .March relative to
the same period of 1972. Yes, the
industry is finding it difficult to
make the adjustments needed to
get out of a low price situation.
MANURE PUS
24-36 ft., 48 ft. & 60 ft.'
Diameter 12 ft. DeepJ
circular precast concrete!
with Gunite coated in I
terior,
ZIMMERMAN
INDUSTRIES, INC.
R.D No. 1 Ephrata, Pa. 17522
733-6156