AMES, Iowa — Higher prices should help producers capture more profits in the coming months, as consumers show some willingness to pay more per dozen eggs. And egg production in the Midwest and South is likely to expand as the California laying flock shows some consolidation.

“The November 2014 egg price paid to producers was 35.64 cents per dozen, or 38.5 percent, higher than the previous month,” said Maro Ibarburu, business analyst at the Egg Industry Center at Iowa State University.

The national average price across all egg sizes was $1.25. In the Midwest, the average price for eggs delivered to the store door rose 23 cents per dozen white large eggs in November.

Increasing farm egg prices from October to November is not unusual, as stores move egg inventories to meet holiday demand. Producer prices increased by 26 cents per dozen from October to November last year.

Grocers rarely pass that full price increase along to consumers; in recent years, average retail egg prices stayed about the same from October to November, then increased slightly in December as holiday demand boosted willingness to pay per dozen eggs.

But other factors besides consumer demand are likely behind the unusually high price jump in November. Exports and eggs broken – egg breakers supply eggs out of the shell for use in foodservice and other applications – rose in October.

“If increases in eggs broken and table egg exports continued in November, they may have combined to put upward pressure on table egg prices,” said Kenneth Mathews and Mildred Haley, USDA authors of December’s Livestock, Dairy and Poultry Outlook. By the end of October 2014, the United States had already exported more eggs than in all 2013.

Higher prices are good news for producers, who increased egg production in every month of 2014 through November. The prices combined with lower feed costs – especially corn and soybean meal – to boost the Egg Industry Center’s estimated producer profit from 30 to 60 cents per dozen.

California changes

Egg production is expected to continue increasing in future months, as the U.S. laying flock continues to expand. If consumption holds steady, including exports and egg processing, egg prices would be expected to stabilize or decline.

But a change in California law could create demand for eggs produced outside the state. On Jan. 1, 2015, eggs sold in California will have to be produced in “enriched colony” houses, which allow more space per hen than many laying houses in production. The California laying flock has declined as the law looms.

The impact of the California flock decline on prices is uncertain. ISU agricultural economist Dermot Hayes, co-author of an egg economic study forthcoming in the journal Poultry Science, said last month the California law could push egg prices up as much as 20 percent.

But other studies have demonstrated consumers may not be more willing to pay more for eggs with certain production characteristics. And producers in California and elsewhere could expand in response to higher prices.

In September, California was the fifth-largest egg-producing state, but laying hens in Texas (15.08 million) surpassed the Golden State’s 15.03 million in October. That compares to October 2013, when California had 17.43 million laying hens and Texas had 14.63 million.

The USDA’s Chickens and Eggs report points to fewer large flocks in California contributing to the decrease. The number of table egg layers in flocks of 30,000 or more in California was 15.2 million this October, a 12.6 percent decrease from 2013. The number of hens in large flocks in Texas stayed about the same.

Meanwhile, large flocks in the top four egg-producing states increased. Iowa, the largest producer, saw layers in flocks of 30,000 birds and above increase about 1.5 million. Indiana large flocks reported a 600,000-bird increase, while Ohio saw about 1.6 million. Pennsylvania saw large flocks increase by 120,000 hens.

Iowa had a total of 58.2 million laying hens in October, according to the USDA. There were 30 million in Ohio, 26.4 million in Indiana and 24.2 million in Pennsylvania.