Poultry and egg situation

A'-- ?5. I -I

UII TED STATES DEPARTMZIET OF AGRICULTURE
bur,:au of Agricultural Economics
Washington


PE--4 April 8, 1937
- - .--- - - - -
T H E F 0U L TR Y AND EG G SITUAT ION



Summary


Two of the important developments in the poultry and egg situation in

.rch.. as reported by the Bureau of Agricultural Economics, were (1) the

somewhat gre-,ter-than-average seasonal rise in the farm price of chickens,

and (2) the less-than-average seasonal decline-in the farm price of eggs.

The rise in chicken prices in the face of heavy receipts and large

storage stocks may be attributed largely to a stronger consumer demand than

has .existed in recent years. If this improved demand continues into the

fall, its effect, together with that of a smaller supply resulting from the

prospective light hatch, will be to lessen the extent of the usual seasonal

price decline.

The less-than-average reduction in egg prices also may be attributed

largely to a stronger demand, particularly from storage operators. Eggs are

going into storage at a rate about 21 percent greater than last year and

at higher prices. Though temporary declines may occur during the spring

they are not likely to carry prices below those of 1936. The prospective

lighter hatch points toward fewer.egg marketings this fall and winter than a

year before. While the effect of this upon fall egg prices will be approxi-

mately offset by the probable increase in storage stocks, winter prices will

respond more to the hatch than to the storage holdings. In the spring of

1938 eggs from this crop of pullets will be a major source of supply.








PES-4 -2-

Feed situation

Though still very unfavorable tr the poultryman, the feed situation in
March, judged by the feed-egg ratio, was ic-t as bad as in February.


The fred-egg ratio at Chicago, by weeks, average 1925-34, annual 1935-37
(Dozens of eggs required to buy 100 pounds of poultry ration,

Week ended Feb. :Feb. Feb.. Feb.. Mar. Mar. Mar. .Mar. .Apr. *May .June
as of 1937 : 6 13 : 20 27 6 13 20 27 3 1 :

-Dozen Dozen Dozen Dozen Dozen Dozen Dozen Dozen Dozen ,ozen Dozen
Average
1925-34 .....:.. 5.38 5.29 5.70 6.04 6.20 6.16 6.14 6.13 6.23 6.43 6.98

1935 .......: 5.66 5.12 5.47 6.05 7.3 7.'2 7.25 7.19 7.10 6.77 6.34
1936 .........: 4.70 4.03 3.84 4.80 5.11 6.2. 6.39 6.37 6.43 6.01 5.60
1937 .........: 9.16 9.40 9.26 9.13 9.17 .93 8.75 9.07 9.72


In most years the feed-egg ratio rises to a maximum in June; note the
course of the 1925-34 average. In 1935, however, after the 1934 drought, the
ratio was greatest in March, declining later in the spring and suiimer. This
spring, with a more serious feed situation than in 1935, no material decline
below the March average is likely, but, on the other hand, any rise which may
occur will probably not greatly exceed the feed-egg ratio of early April.


Hat chins_

As was indicated last month, the feed situation is likely to be the
dominant factor in causing a smaller hatch in 1937 than in 1936. The reduction
in the total hatch, both farm and commercial, will probably be from 7 to 10
percent. While no estimates are available on changes in farm hatchings, reports
from commercial hatcheries showed a decrease of 6 percent from 1736 in the
number of salable chicks hatched in February. The cumulative reduction for the
season, including both January and February, is 12.5 percent.

Poultry marketing

The seasonal low in the receipts of dressed poultry usually in April -
appears to have come in February this year. Receipts at the four markets in
March were up 22 percent from February. The average change, 1925-34, is a
decrease of 16 percent. This situation reflects both a large out-of-storage
movement and a continued heavy culling of flocks. The effect of the storage
movement on receipts will continue until mid-summer. Because of this it seems
likely that receipts will rise seasonally and be above the 1925-34 average until
marketing of the newcrop of birds is well begun. Receipts in the last part of
1937 will probably be less than in 1936 because of the prospective reduction in
the hatch.








-3-


Receipts of dressed poultry at the four markets,January-June,
average 1925-34, annual 1935-37


Year


: Jan. :


Feb. : Mar.


:Million Million
:pounds pounds


Av e age
1925-34 ...: 28.5


1935 ....... :
1936........ :
1937........ :


21.0
19.6
21.3


20.2


15.1
13.7
15.3


: Apr. : May : June : Jan.-June


Million Million Million Million millionion
pounds pounds pounds pounds pounds


17.0 15.4


'12.6
14.2
18.7


13.5
14.5


18.6

14.4
17.9


21.0

18.3
21.7


120.7

94.9
101.6


Poultry storage

In years when the summer carry-over stock is large it tends to depress
fall poultry prices by weakening the demand to store poultry and by adding
to the fall supply. If the present record stocks of frozen poultry in
storage are to be brought down to the 35-million average of other years
(1925-34) by July 1, the seasonal out-of-storage movement in the first 6 months
of this year would have to be 106 million pounds at the 26 major storing
centers. The movement in the 3 months from January through March 1937 has
been 42 percent of this total, somewhat less than the 1925-34 average propor-
tion. The 1925-34 average out-of-storage movement in March was 27 percent of
the 6 months' out-of-storage movement; the 1937 movement was 24 percent.


Out-of-storage movement of frozen poultry at 26 markets, average
1925-34, annual 1935-37


S : : Jan.- Mar. : Week ending as of 1937
Year Jan.- : Jan.- :as percentage:
:Mar. : June : of 6 months : Apr. Apr. : Apr. : Apr.
S :1 total 3 : 10 17 24
:Million Million Million Million Million Million
:pounds pounds Percent pound s pounds pounds pounds


Average
1925-34.-.: 27.4


1935....... :
1936 .......:


44..9

55.2
53-4


37.0
26.7


4.4
3.9


4.2

4.9
4.1


Movement needed to clear 106:
8.0 7.7 8.2


1936....... : 44.6


PES-4


A






PES-4 -4-

Chicken prices

The seasonal rise in the farm price of chickens usually reaches a peak
in May about 12 percent above the January price corresponding to a price of
15 cents per pound this May. Normally 5.4 nrercent of this advance occurs ly
March 15. In 1937 the March price of 14.4 cents per pound represents an ad-
vance of 5.9 p-rce-nt from January.

Average price per pound received for chickens by farmers in the United
States, 15th of the month, 1935-37


Year Jan. : Feb. : Mar. : Apr. May :. June: Oct. Dec.

: Cent-s Cents Cents Cents Cents Cents Ccnc. Cents

1935 .......: 12.4 13.4 14.2 15.5 15.7 15.6- 15.7 16.0
1936 .......: 16.5 16.9 16.6 16.9 16.6 16.4 14.0 12.6
1937 .......: 13.4 13.6 14.4

S ,_____ .-.v-r- _, s- -:oral indr-x (.erag. for th --ear I 1-00)
Average
1921-30 ..: 94.9 7t.3 100.0 103.9 105.9 105.7 3. 5 92.?



In view of the lar--. storage movement, reflectin- heavy .-consLumption,
there can be little doubt of a stronger demand for -poultry than existed in
1935 or 1936. 7nhile this may tend. to create a greater-than-average seasonal
advance in prices, its more important effect is likely to be a less-than-average
seasonal decline after May. The lighter hatch in prospe-ct also will tend to
support prices, both by rendering less burdensome any storage surplus which
may develop and by resulting in lower-than-average s-up!'lies in the fall.


Index of national income, -.cludirn agriculture, average
192',5-34, annual 1935-35

(1924-29 = 100)

Year : Jan. Feb. : Mar. : Apr. : L.y : June Oct. : Dec.


Av- r az.--
1925-34 ..

1935 ....... .
1936 ....... :
1937 ....... :


91.0

73.5
78.6
87. S


0.7 I0.2 9'.7 S9.6 39.6 SS.6 S3.8


75.5
73.5


74.4 72.3 74.4 73.8
81.6 73.7 -2.2 S3.3


1/ Revised from last month.


74.3
87. -


79.9
97.2








PES-4


Laying flock size

The number of hens and pullets of laying age in farm flocks averaged
4.2 percent more on March 1, 1937, than a year earlier. With the flock 5.1
percent smaller than at the January 1 peak the seasonal decline in numbers is
well under way at 'a greater-than-average rate. The 1925-34 average decline
for this period is 3.2 percent. The seasonal decline usually ends by Sep-
terrber with numbers about 25 percent less than on January 1.

Average number of laying hens in farm flocks, average 1925-34
annual 1935-37


Year : Jan. 1: Feb. 1: Mar. 1;: Anr. 1: May 1 : June 1: Oct.1 : Dec. 1

Number Number Number Number Number Number. Number Number
Average
1925-34 ..: 87.5 87.2 84.7 82.1 77.4 73.4 70.4 81.9

1935 ....... : 78.3 77.6 75.8 72.9 69.1 65.1 65.1 76.6
1936 ....... : 80.6 79.1 76.7 74.8 70.5 66.5 66.9 78.9
1937 ....... : 84.2 82.5 79.9


Rate of egg production

The rate of egg production reported on March 1 was 20 percent above
the relatively low rate a year before. It was but 2 percent above the 1925-34
.average for March 1. It is likely that the high feed-egg ratio will keep the
rate of production in the spring months near the corresTonding 1925-34 average.

Eggs laid per 100 hens and pullets of laying age in farm flocks,
average 1925-34, annual 1935-37


Year :Jan. 1 :Feb. 1 :Mar. 1 : Apr. 1: May 1 :June 1 : Oct. 1 : Dec. 1

:Number Number Number Number Number Number Number Number


Average
1925-34...: 16.5 24.2


1935 .......
1936 .......
1937 .......


16.9
19.1
22.0


21.7
24.0
25.7


38.4 52.8 55.1 49.5 25.0


37.3
32.6
39.2


53.9 55.2 50.3 25.9
54.7 56.5 51.2 25.1


13.9

16.3
16.0


- 5 -




- 6-


Eg marketing

Recei-ots of eggs at the four markets in ;'.arch were 13 percent below the
March 1925-34 average. The course of receipts durin.- the spring :will probably
reflect the below-average size of flock and the pros-e.ctive average rate of
lay that is, they will tend to move below the 1925-34 average but above 1936.
T:-is has been true for the first quarter of 1937.

Receipts of eggs at four -me.r:'ts, average 19q.5-34, annual 1935-37


Year : Jan. Feb. M: ar. Jan. I.far. : Ar. June

: 1,000 1,000 1,000 1,000 1,000
C: c-se cases cases cases cases
Average
1?2.-34 .....: 8423 1,060 1,764 3,666 6,185

1935 ............ 684" 792 1,415 2,391 5,079
1936 ...........: 820 734 1,695 3,249 5,571
1937 ..........: 1,012 849 1,531 3,392


Eg storage stocks

The usual seasonal increase in store-c stocks of eggs bean in early
March. Though there was some storing in Janur,- i-nd Febr'-.ary there wVr.s a
greater out-of-storage movement, so that holdin--s f case eggs at 26 major
storing centers did not increase until the week ending l!perch 6. Since February
27 the net into-storage movement has exceeded that of 1936 by about 21 percent.
It has been 25 percent less than the 1 2'-34 average, however.

Cold storage holdings of eogs at 26 market's, aver-ge
1925-34, annual 19E2-37


Week ending
as of 137


Feb. :
'27;


2gr.
A :


MIar. Mar.


Mar.;:Apr. : Apr.: Apr.: Apr.
27 : 1O0 : 17 : 24


: 1ay
: 1


: 1,000 1,000 1,000 .1,000 1,C00 1,000 1,"'700 1,000 1,00C 1,000
: csefs cases cases cases cases cases cases cases cases cases
Avera e e
1 25-34.. : 90 153 278 46- 709 1,068 1,57.0 2,033 2,537 3,163

1935 ....... : 31 114 285 534 822 1,199 1,525 1,857 2,216 2,598
1936 ....... : 5 11 56 143 340 610 897 1,271 1,642 2,0943
1937 ....... : 219 244 344 462 636 953


?ec-nusc of the bearing that storage stocks have on the f.ll and winter
price of eos large stocks tending to depress prices by more than do sriall
stocks in that ",eriod it is of interest to consider what the August 1 stock
of eggs is likely to be. Variation in this peak storage quantity is largely due
to a c,:rreponrdi ng variation in spring sun'rlies and in the stor'-.e margin on
the previous year's stor-ge operations. Figu.re 2 shows the relationship
between stocks and receipts at the four markets. If receipts in the -eriod
March to June come to 7.5 million cases about half way between the 1925-34
average and the 19.36 figure then the United States storage stocks of case
eggs on August 1 is indicated at about 8.8 million cases.







PES-4


It is to be noted that this relationship is not followed very closely
in any one year. Many of the differences, however, correspond to variations
in the margin for the previous storage season. As a general rule for each
cent over four cents in the margin there has been an additional hundred
thousand cases more than the stocks indicated in figure 2. Since the margin
for 1936 was about 6 cents, stocks are likely to be about 200,000 cases greater
than supplies alone indicate, or about 9 million cases -- 23 percent greater
than in 1936.

As shown in figure 1, the amount of frozen eggs in storage on August 1
has not varied widely since 1930 from an average of 3.2 million equivalent
cases. If this much is stored again in 1937 the total stock, both shell and
frozen, is indicated at about 12.2 million cases, or close to the 1925-34
average.

E- prices

The farm price of eggs on March 15 was only 1 percent less than on
February 15, though the average seasonal decline is 27 percent. The course of
spring prices is, therefore, starting out at a level 14 percent higher than
in 1936.

Average price of eggs per dozen, mixed colors, special packed
at New York, and the United States farm price, 1935-37


Year and price: Jan. : Feb. : Mar. : Apr. May June O -e't. Dec.
Cents Cents Cents Cents Cents Cents Cents Cents
N.Y. price:
1935 32.9 31.0 24.1 26.6 27.5 26.9 32.8 32.3
1936 27.9 32.6 23.5 22.8 23.9 25.1 33.5 34.3
1937 : 26.5 24.3 26.0
U.S.farm
price
1935 25.0 25.6 18.6 20.0 21.4 21.0 27.9 28.7
1936 : 22.8 23.8 17.5 16.8 18.1 18.9 27.6 30.5
1937 : 23.1 20.1 19.9


Seasonal index of farm prices (average for year 100)
125.0 102.0 74.4 72.6 73.7 74.2 118.9 151.2


1921-30


Wile some declines may occur in the next three months they are likely
to be of a temporary nature and would probably not bring prices below those
of 1936. It is more likely that advances will take place, largely because of
a strengthened storage demand.

The extent of the reduction in hatch will be an important influence on
egg prices next winter and in the spring of 1938. Laying flocks are now below
average for this time of year. Such a reduction in the hatch as now seems
likely may, therefore, result in relatively high prices in early 1938 when
e -_ from this crop of pullets will be an important source of supply.




UNIVERSITY OF FLORIDA

III ll I IIIlllII llll II Il11 IIIII
3 1262 08903 9423


Cold-Storage Stocks of Eggs on August 1,

1916 to Date


CASES
(MILLIONS)


U.S. DEPARTMENT OF AGRICULTURE


NEG 6 3d2 I BunALAu OF AGRICULTURAL ECONOMICS


FIGURE I.- COLD STORAGE HOLDINGS OF EGGS, PARTICULARLY SHELL ECCS, HAVE SEEN DE-
CLINING SINCE 1930. THIS DOWNWARD TREND MAY BE PARTLY THE RESULT OF INCREASED COM-
MERCIAL EGG PRODUCTION IN THE FALL AND WINTER, BUT IT REFLECTS MAINLY DECLINING TOTAL
PRODUCTION.


STORAGE STOCKS OF SHELL EGGS ON AUGUST 1. UNITED STATES,
AND RECEIPTS OF EGGS AT FOUR MARKETS* MARCH-JUNE
STOCKS
(CASES)
(MILLIONS) 30


*e28

10 -- -- *
33
31
34. 1924
29


8


36
7
/ *NEW YORK. CHICACO. BOSTON.
32 I AND PHILADELPHIA
I II
5.5 6.0 6 5 7.0 7.5 8.0 8.5 9.0
RECEIPTS AT FOUR MARKETS. MARCH-JUNE (CASES. MILLIONS)


1 S CEPARTMENTOFAGRICULIURE


NEG 32290 BUREAU OF AGRICULTURAL ECONOMICS


FIGURE 2.- IN A GENERAL BAY HEAVY RECEIPTS HAVE RESULTED IN LARGE STORAGE STOCKS BY
AUGUST I. RECEIPTS DURING MARCH-JUNE 1937 ARE NOT LIKELY TO GREATLY EXCEED 7.5 MILLION
CASES.