By MATTHEW D. ERNST
AMES, Iowa — The Egg Industry Center (EIC) reported a 3 percent decrease in the cost of producing a dozen eggs in the Midwest between March and April; however, April egg producer profit margins were squeezed, as the Midwest producer egg price declined by 29.5 percent from March.
The center’s May 6 report estimates average layer feed cost in the Midwest at $291.02 per ton. Despite corn and soybean meal price declines, the April 2013 feed price for layers was still the tenth-highest monthly feed cost per ton since January 2000. The total cost of production per dozen eggs for April in the Midwest region was estimated at 75.05 cents per dozen. Meanwhile, the average producer price per dozen for large white eggs in the Midwest declined from 90.3 to 63.8 cents per dozen. The average price for eggs delivered to the store door fell from 136.0 cents in March to 108.0 cents in April.
April prices were about 10 cents per dozen less than expected, due in part to higher April layer numbers, translating to more supply. The April price decrease is probably also explained by an unexpectedly higher egg price peak during the traditionally higher-demand Easter season. “I think the higher price this Easter may have been driven in part by the big Easter advertising campaign for eggs that the American Egg Board put on this year,” said Maro Ibarburu, EIC business analyst.
Midwestern states remain the country’s egg production leaders. The EIC report noted that, for March, the top three egg-producing states are Iowa (51.8 million laying hens), Ohio (27.9 million) and Indiana (26.0 million). These three states account for 36 percent of the country’s laying flock. Pennsylvania (23.9 million) and California (19.1 million) are the fourth and fifth-largest egg producing states.
The report’s authors, Ibarburu and Don Bell, University of California emeritus poultry specialist, said cost estimates assume standard fixed costs, such as facility expenses. Those costs, the report noted, can vary among regions. Fixed production costs may also vary among individual operations within the same region.