D2o—Lancaster Farming, Saturday, July 10,1982 UNIVERSITY PARK - Are export markets a positive or a negative market for eggs? Can an export market be maintained when egg prices are profitable to egg producers? Are future exports destined to be only a surplus removal program? Answering these questions, Penn State Poultry Marketing Specialist A. Kermit Birth said “exporting eggs could add to the instability of egg prices and have a negative effect even if egg exports are not subsidized by governments.” "In looking at the future of ex port markets, one must distinguish between long-term steady exports at prices profitable to producers and ‘fill-in’ exports. The latter would be exports shipped when egg OWNER Ivan Smoker & Sons Ivan Kibbe Jr Maynard Sherman Jack Thomas Sr John C Traub William H Currier Jay N Heisey OWNER NAME OR NO. William Currier See Boots Ivan Kibbe Freedom George Barker Boots H Charles M Cornell Mickey H Kevin Risser Missy H Titus Risser Patty H FARMERS AgCREDIT 9 East Mam Street. Lititz. PA 717-626 4721 Exports have negative effects on egg prices prices tor export from the United States are lower than prices for similar quality eggs available elsewhere. “Long-term profitable export markets may be difficult to find, build, and maintain. Production of eggs in selected countries throughout the world is expected to increase two percent in 1982.” U.S. exports will continue to compete against government subsidized exports from other countries, as well as increased production at home and abroad, noted Birth. He pointed out that egg exports in 1981 equalled 234 million dozen or about four percent of the total year's production. This represented an increase of 64 percent over the previous year’s Report NO. MEEO COWS RH RH R&GH Mixed R&GH RH RH 98 8 89 2 51.8 43 0 40 1 59 9 73 9 DAYS LBS. IN MILK MILK MEED 284 22,584 259 19.541 7 11 3-6 305 16.347 305 21.680 82 305 19.184 305 18,550 305 19,911 SOAYS IN MILK 86 3 90.9 84.6 88 7 86 0 85 4 88 I MILK 21,369 18,797 19,645 18.844 19,028 18,342 18.373 % l«s. FAT 3 5 796 3 8 752 4 7 763 3 5 763 4 8 918 4 3 792 3 9 779 ALEXANDRIA MAX ISENBERG 814-669-4027 BALLY LONGACRE ELECTRIC 215-845-2261 BEDFORD BENCE FARM EQUIPMENT 814-623-8601 BELLEVILLE MACLAY i SON 717-935-2101 export figures. Japan led the import market, receiving 31 percent of the U.S. egg exports. Despite these increases in export sales. Birth observed, “payments lu ... .-1.1;, were not high enough to prevent business losses.” The Penn State marketing specialist blamed “fill-in” exports and delayed production ad justments for the pricing problem. “During the past year, filling of export orders not only reduced the egg supply at a given time, but the accompanying publicity in trade papers tended to strengthen prices beyond the amount consumers would pay for the remaining supply of eggs. "Prices weakened more than expected shortly after the export order was assembled at dockside. This type of action delayed supply adjustments needed to make the egg production business profitable to the majority of producers in the egg industry.” Birth asked and answered the question of what would happen if export markets were lost. "It doesn’t matter whether the loss is due to increased production in the countries which are importing eggs or m other exporting coun tries. If prices in the United States are about equal to the average cost of production when export markets are lost, production will have to be cut back if the producers are to receive profitable prices.” He emphasized the "demand tor eggs is inelastic,” pointing out a one percent change in supply causes a much larger change in price in the opposite direction. Birth asked producers to con sider the economic impact on producer and industry income if the surplus is removed by exports over the short term or if producers reduce their output by an amount equal to the export market. An export order of eggs at a Patz builds feed handling systems you can depend on after after GEORGE HEATH 472 Woodcrest Dr. Mechanicsburg. PA 17055 717-737-0002 Contact your nearest Patz dealer CAMP HILL LEBANON QUARRYVILLE LLOYD SULTZBAUGH MARVIN J. HORST UNICORN FARM 717-737-4554 DAIRY EQUIPMENT SERVICE 717-272-0871 JAMES E. LANDIS 717-786-4158 CHAMBERSBURG MILTON CUMBERLAND FARM LANDIS FARMSTEAD & DAIRY INC. AUTOMATION 717-263-1965 717-437-2375 HAMBURG SHARTLESVILLE FARM SERVICE 215488-1025 specific tune can also complicate the decision-making proces of egg breakers. Birth stressed. It adds a new dimension in deciding whether to purchase eggs to be frozen and dried for future delivery or to delay purchase until later, all of which will impact on the price the eggs. In summation, Birth said, “The (Continued trom'Page D 18) no one can be sure now what the situation wiii be at that time and some flexibility is needed to make an equitable decision. It is pointed our that this was one of the failings of the program in the past because it didn’t allow the support price to fall below 80 percent of Parity when market conditions indicated that it should. The counter argument, of course, is that it puts too much decision making on the Secretary who may be subject to political or budgetary pressures that would influence the support price as it has even with Congress in the past. NMPF Proposal The Dairy Stabilization Program proposed by the National Milk Producers Federation is about 180 degrees away from the ad ministration’s request. It provides for a two price system* that would keep the present support price for 90 percent of the milk production and pay for the other ten percent at prices that would make it com petitive in world markets. It would provide year end refunds for producers who lowered production during the year. For those who didn’t, the average price would be about a dollar lower. Government purchases would be limited to five billion pounds of milk equivalent compared to last year’s 13 billion pounds. The year In-bunk Chain Feeder lead *r Conveyor DISTRICT MANAGER PIPERSVILLE MOYER FARM SERVICE 215-766-8675 Milk Check Another difference in the NMPF • plan is to establish a National Dairy Board of milk producers to direct the program including the sale of surplus dairy products to foreign countries. This takes the responsibility from the Secretary of Agriculture and gives more control to the producers par ticularly in foreign sales. A separate proposal from the Dairy Stabilization Program but part of the NMPF plan is a con tribution by all producers of five cents a hundred to finance a national effort to promote the sale of milk and dairy products. Other proposals in the legislative hopper will be reviewed in the future to provide a cross section of all the schemes under con sideration but producers will need to work at keeping abreast of the changing scene if they want to be part of the decision making. That's because Patz spends a great deal of time in design and field testing, to make sure that our equipment will stand up to your requirements. Whether you need a large or small feed handling system, a silo unloader, a conveyor, or feeder... Tapered Pan Feeder TERRE HILL TERRE HILL SILO CO. INC. 215-445-6736 export market for eggs Is not likely to improve the profitability of the egg industry. It could have a disastrous impact on the industry if there is too great a dependence on fill-in export orders. "The higher the percentage of egg production exported, the greater the risk of a negative in fluence on the egg industry.” remainder of the surplus milk would be paid for out of the lower prices on the ten percent of the milk from producers who didn’t cutback. The reason for the 90 percent, 10 percent split is because govern- Qatent purchases last year were equal to ten percent of the milk produced. If you can cut produc tion by ten percent all the milk can be sold commercially and reduce government purchases to what is needed for other federal programs. year year Year after year, you can depend on Patz MARYLAND DEALERS HAGERSTOWN. MD TRI-STATE FARM AUTOMATION 301-790-3698 INEDYVILLE. MD FINDER SERVICE CO. 301-348-5263 LINEBORO, MD WERTZ GARAGE. INC. 301-374-2672 NEW WINDSOR, MD ROOF FERTILIZER & CHEMICAL 301-775-7678 STREET, MD P4S EQUIPMENT. INC. 301-452-8521
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