Poultry and egg situation

UNITED STATES DEPART:J.:T OF AGRICULTURE
Bureau of Agricultural Economics
Nashingt on

PES-6 June 9, 1937

THE POULTRY AND EGG SITUATION


Summary

Impcrtant factors in the poultry and eg. situation in May, as

reported by the Bureau of Agricultural Economics, were: (i) tie continued

exceptionally unfavorable feed-egg ratio, (2) definite evidence of smIlier

hatchings this spring, (3) the development of a large carryover stock of

frozen poultry, and (4) the continued increase of storage stocks of egt.s

above those of 1936.

The farm price of chickens appears to have reached its seasonal peak.

The seasonal decline is likely to be greater than average during tne next

3 or 4 months because of the price depressing effect of the large storage

stocks of frozen poultry. In the last 4 months of the y'car, however, small-

er marketing then in 1936, due to a smaller hatch, will tend to lessen the

seasonal decline in prices and possibly to eliminate it during th..t period.

The farm price of eggs is near its low point for the year and by the

end of June is likely to have begun its seasonal advance to December. Because

of the la-rger stocks of eggs in storage than in 1936 the advance from the

Iarch-June average is not likely to be as great as it was then.

In the first half of 1938, however, when storage stocks are used up

and the 1937 crop of pullets will provide the important source of supply,

egg prices are likely to exceed those of 1937.

Feed situation

The feed situation in May, as represented by the Chicago feed-eg;g ratio,

continued c.t the unfavorable level set in April. Declines in both feed prices

=nd in egg prices kept the ratio near 11 throughout the month.




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The feed-egg ratio at Chicago, by weeks, average 1925-34, annual 1935-37

(Dozens of eggs reiuir,.d to buy 100_po-rnds of poultry ration)
: L.-k rmc.nd -.s of 1937
Ye-r :Mr.r. :Apr. :May :Mny :Mao :Ma- ::May :June :July :July
: 6 : 3 : 1 : 8 : 15 : 22 : 29 : 5 : 3 : 31
: Doz. Doz. Doz. Doz. Doz. Duz. Do?. Doz. Dos. Doze
Avervze
1925-34 : 6.20 6.23 6.43 6.43 6.48 3.56 6.82 6.98 6.71 6.56

1935 ...... : 7.30 7.10 6.77 6.58 6.41 6.43 6.43 6.34 6.22 6.35
1933 ......: 5.11 6.48 6.01 5.84 5.69 5.86 5.78 5.60 6.32 7.35
1937 ......: 9.17 9.72 10.80 11.31 10.67 10.92 11.10


As shown by the 1925-34 aver-ge, the feed-egg ratio no mnally rises to
a pea: in June. A decline to -un average (1925-34) ratio of 4 by December
usu-1; follows. A decline to such a level does not now seem likely in 1937
because a less than average season-.l advance in ag:g prices is .niticipa.ted.
The feed situation this summer ;.nd fall, however, will greatly c.fflt the
decline,

HA.tchinaxs

As was pointed out in March, the high feed-egg r-.tio of Octcbcr to
March would be expected to crusc a reduction in the total htch, both farm
and commerci-al, of 7 to 10 percent in 1937 from thr.t of 1936.

Reports from commercial hatcheries in April show-ed an 8.6 percent
decrease in salable chicks hatched as compared with. April 1936. For the
period January through April the decrease is 3.2 percent. Fcr May, pre-
liminz.ry hictchery reports showed a decrease under 1936 of 29 percent.

The number of young chickens in farm flocks, a good measure of the
tot.c h-.tch, w.-.s 6.8 percent less on May 1 than a year before. Of the varies
dates ?t which this information is reported, June 1 probably gives the best
indication of the total hatch; it is latc enough to include most of the
h-.tch and is early enough to include the large numbers of broilers sold in
June.

Poultry m.r.rketings

Receipts of dressed p-oultry at the four markets New York, ChicaGo,
Boston, and Philadelphia were 12 percent greater in May than in April.
This is less the-.n the avrcr.-e (1925-34) seasonal increase of 21 percent from
April to May.
Receipts of dressed poultry at the four narkects, average
1925-34, antiual 1935-37

Y : Total : : : : Total : Total : Total.
cr :Jan.-Maxr: Apr. May June Apr.-JuneJuly-Septct.-Doc.
: Apr.-J.ume: July-S ep t: Oc t. -Dec.
Avor-.-e :2.:il.lbs. Mil.lbs.Mil.lbs.L'il.lbs.Mil.lbs. Mil.lbs. L.il.lbs.
1925-34 : 65.7 15.4 13.6 21.0 55.0 67.8 168.7
1935 ....... : 48.7 13.5 14.4 18.3 46.2 56.0 141.2
1936 ....... : 47.5 14.5 17.9 21.7 54.1 75.3 177.2
1937 .......: 55.3 17.3 19.3


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Receipts are high now relative to other years partly because of a
large out-of-storage movement of poultry. Storage movement and flock
reductions may keep receipts above those of 1936 through the summer. From
September to the end of the year, however, the reduction in hatchings this
year will tend to keep receipts below those of 1936.

Poultry storage

Despite an exceptionally heavy out-of-storage movement from January
to May, stocks of frozen poultry in early June were at a record hi-;h for
that period. Poultry stocks re.-ch a minimum in the summer; tnese large
carryover stocks will have a depressing effect upon poultry prices during
the next 3 or 4 months.

Storage holdings and out-of-storage movement of frozen poultry at
26 markets, average 1925-34, annual 1935-37

: In storage O: ut-of-storage movement
: May 29 : Jan.-May : May 1-May 29
Average :Million pounds Million pounds Million pounds
1925-34 ......... 38.4 57.1 9.1

1935 .............. 35.7 65.1 9.2
1936 ..............: 32.2 49.7 6.1
1937 ...............: 60.3 80.7 14.8

In connection with the out-of-storge movement this year it is of
interest to note that poultry used in canning has run from 25 to 30 percent
above 1936 in the months January through April. No data are available to
show how much of this canning poultry hrs come from storage, however, nor
are data available to show how long it will be held before going into con-
sumption.

Chicken prices

The farm price of chickens fell by 2.6 percent from April 15 to May 15.
Normally am advance of 1.9 percent occurs. The peak ordinarily comes in May
and averages 11.6 percent above the January price. The 1937 M-ay price is
10.4 percent above that of January. It is not clear now whether the April
price was a temporary advance or whether it will be the peak price of the
season. In "aver-ge" years prices decline from May to Decem:ber. In several
respects, however, 1937 is not an "avorrage" yec..r. Record stocks of frozen
poultry and heavy receipts will tend to accentu-'te the seasonal price decline
during the next 3 or 4 months. ,ith consumer incomes now about nver-.ge
(1925-34), any further improvement would tend to lessen the seasonal decline
in the farm price of poultry. The reduction in the hatch also will tend to
lessen the decline. The outlook now, therefore, suggests a greater than
average decline through the summer and a less than average decline, or
possibly nn advance, from September to December. As pointed out last month,
however, it is probable that the totrl decline from May through December
will be less than average.


PES-6




jLb-b


Average price ner pound received f6r chickens by farmers in the
United States, 15th of the month, 1935-37

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

135 : 12.4 13.4 14.2 15.5 15.7 15.6 15.7 16.o
1936 16.5 16.9 16.6 16.9 16.6 16.4 14.o 12.6
1937 : 13.4 13.6 14.4 15.2 14.8

Average seasonal index (average for the year 100)
Average
1921-30 94.9 98.3 100.0 103.9 105.9 105.7 98." 92.2



Index of national income, excluding agriculture, average 1925-34,"
annual 1935-36

(1924-29 100o)
Year Jan. Feb. : ar. Apr. May June Oct. Dec.

Average
1925-34 : 91.0 90.7 90.2 89.7 89.6 89.6 88.6 88.8

1935 ..... 73.5 75.5 74.4 72.3 74.4 73.8 74.3 79.9
1936 .....: 78.1 78.5 81.6 78.7 62.2 83.3 87.3 97.2
1937 .....: 87.8 SS.3 1/89.7 91.1

1/ Revised from last month.

Laying flock size

The number of hens and pullets of laying age in farm flocks averaged 3.7
percent more on May 1, 1937, than a year earlier. The period January 1 to
September 1 is one of steadily diminishing flocks, as there are normally about
25 percent fewer layers on September 1. The decline so far in 1937 has been
13.2 percent while the 1925-34 average is 11.5 percent. With a high feed-egg
ratio this summer, unfavorable to feeding for egg production, it is likely that
the total decline in size of laying flock will be more than average. This,
together with a reduction in the hatch, may bring the number of layers this
fall below the number a year earlier.

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

Year Jan.1 : Fcb.1 Mar.1 Apr.l : May 1 June 1: Oct.1 Dec. 1
:Number Niumber Number Number Number Number Number Number
Average
1925-34 87.5 S7.2 g4.7 82.0 77.4 73.4 70.4 31.9

1935 ......... 7.3 77.6 75.8 72.9 69.1 65.1 65.1 76.6
1936 .......: So.6 79.1 76.7 74.8 70.5 66.5 66.9 78.9
1b37 ....... 84.2 82.5 80.0 77.5 73.1


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PES- 6


Rate of egg production

The rate of .g- production reported on May 1 -"as the nighest on r. cord,
2.3 percent above 1936 and 4.9 percent above the 1925-5)4 average. It is not
likely that the rate of productionn -ill be maintained -fpr lon.? above the
1925-34 average.
Eggs laid per 100 nens anx pullets of layin.j age in farm flocks,
average 1925-34, annual 1935-37


Year :Jan. 1


:Feb. 1 ?.ar. 1


:Number Number lumber Number _.Lmberr Pumrner Number 'Number
Average
1925-34: 16.5 24.2 35.4 52.8 5s.1 49.5 25.0 13.9

1935 ..... 16.9 21.7 37.r R3.9 -5.2 50.3 25.9 16.3
1936 .....: 19.1 24.0 32.5 54.7 R5 51.2 25.1 0L.o
1937 ..... : 22.0 25.7 39.2 52. 57.8

Egg narketings

Receipts of eggs at the four markets in May -erc 6.3 percent below the
May 1925-34 average. The increase over April was 7.14 percent whilc in 1925-34
the average cha.ige was a decrease of 5.5 percent. The future course of re-
ceipts -ill depend to quite an extent union til feed situation this summer and
fall.

Receipts of eggs at four markets, average 1925-34, annual 1935-37

Year Jan.-Mar. : Apr. : ay June Apr.-June

1,000 1,000 1,000 1,000 1,000
: cases casrs cases cas=s cases
Average
1925-34 3,666 2,291 2,210 1,684 6,185

1935 ............ 2,891 1,779 1,S71 1,1429 5,079
1936 ........... : 3,249 1,922 2,003 1,646 5,571
1937 ...........: 3,392 1,928 2,070


agg storage stocks

The into-storage movement of shell eg-s in ?M'ay, as measured at the 26
major storage centers, was 9.6 percent greater than in May 1936. Because
earlier storing had been from 20 to 30 percent greater than in 1936, however,
stocks in storage on May 29,iqr- 24 percent above those of a year earlier. It
was pointed out in April that, on the basis of past relationships with re-
ceipts, an increase was likely of 25 percent over 1936 in peak stocks on August
1. In addition, stocks of frozen eggs were 31 Dercent above those of 1936 on
May 29 at the 26 cities. Since frozen eggs may be held longer than shell eggs
they will not be so great a price depressing factor this fall.


,Arr. 1


lMay 1


:June 1


.Oct. 1


:Dec. 1


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Cold storage holdings of eggs at 26 markets, average 1925-34,
arnual 1935-37


Year


: Week ended as of 1937
: Feb.: Apr.: Apr.: Apr.: Aur.: May : May : May : May : May
: 27 : 3 : 10 : 17 : 24 : 1 : 8 : 15 : 22 : 29


:1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000
:cases cases cases cases cases cases cases cases cases cases
Average
1925-34 : 90 1,068 1,530 2,033 2,587 3,163 3,694 4,206 4,668 5,089

1935 *......: 31 1,199 1,525 1,857 2,216 2,598 2,969 3,397 3,742 4,106
1936 .........: 5 610 897 1,271 1,642 2,043 2,477 2,938 3,377 3,787
1937 .........: 219 953 1,309 1,748 2,245 2,783 3,307 3,809 4,272 4,694


Egy prices

The farm price of eggs dropped sharply from April 15 to May 15, reaching
the lowest price this year.

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 : Oct. : Dec.
S
: Cents Cents Cents Cents Cents Cents Cents Cents
X. Y. price: :
1935.......: 32.9 31.0 24.1 26.6 27.5 26.9 32.8 32.3
1936 .....: 27.9 32.E 23.5 22.8 23.9 25.1 33.5 34.3
1937 .....: 26.5 24.3 26.0 25.0 33.8
U. S. farm price
1935 ....... : 25.0 25.6 18.6 20.0 21.4 21.0 27.9 28.7
1938 ....... : 22.8 23.8 17.5 16.8 18.1 18.9 27.6 30.5
1937 ........: 23.1 20.1 19.9 20.1 17.9
: -Seasonal index of farm prices (average for year = 100)
1921-30 ......: 125.0 102.0 74.4 72.6 73.7 74.2 118.9 151.2


In most years egg prices do not begin to rise sharply until the end of
June. December prices average about double the March-June average.

It is doubtful if the seasonal increase in farm egg prices will be as
great this year as average. Storage stocks will have a distinctly depressing
effect on prices which may not be offset by advancing consumer incomes. There
is little chance that marketing will be light enough to cause an average
seasonal advance.

By the end of the year, however, and in early 1938, the smaller flocks in
prospect will tend to lessen the seasonal winter price decline and to keep prices
'in the spring above those of the corresponding period in 1937. It should be
noted that with the flock size as low as it is now, relative to the 1925-34
*average, an increase in the hatch is needed to replenish the nation's supply
of poultry.






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