Poultry and egg situation

r
.4, / -


UNITED STATES DEPARTMENT OF AGRICULTURE
BUREAU OF AGRICULTURAL ECONOMICS
WASHINGTON


AUGUST 2, 1938


-----------------------------------------------------
THE P 0 ULTR Y AND EG G S I T U A T I O N





U. S. COLD-STORAGE STOCKS OF EGGS ON AUGUST 1, 1916-38
CASES
I MILLIONS I
14 i Frozen eggs
Eggs in shell


U S DEPARTME






PERCENT
OF TOTA
STOCKS


NT OF AGRICULIURE


'20 '22 24 26 28 30 32 34 36 38
* Es.rIMATED FR LM 5 Or'4CE hr'lN,. S OS .'L'L I
r. ; i.,.;: B.uEAJ or AC-,'.uLtusf L.CC.iOMiNC


FROZEN EGGS AS PERCENTAGE OF U. S. TOTAL
STORAGE STOCKS ON AUGUST 1, 1916-38
^-------t --- --- ---
I" ~ ',"" "


30



20



10 _




1916 "18 20 22 24 26 "28 30 32 '34 36 38
a ESTiMATED FROM STORAGE hOLOINdGS OF JULY I


PE8-20


U S DEPARTMENT or AGIlCULIUP[


AEC 32516 luagEU -' AC :LLTURAL ECONOMICS








HE POULTRY AND EGG SITU
(AVERAGE OF CORRESPONDING PERI
I I PERCENT

CHICAGO FEED-EGG RATIO
^ I .


TI

PERCENT



200



150



100



50
130



120



110



100



90





100



90



80



70


U 1 DEPAIMiENT OF AGRICULTURE Mae. *4ag *UOEiAU OF AGRICULTURAL ECONOMICS


FIGURE I


ATION AT A GLANCE
ODS. 1925-34. 100)
r I-I

NONAGRICULTURAL INCOME












1938
I 1I I I 1 1
^^I





179 W8







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Summary

As seen by the Bureau of Agricultural Econcmics, the outlook for poultry

and egg prices until early 1939, on the basis of present data, is (1) for a

more than seasonal decline in chicken prices and (2) for a more than seasonal

advance in egg prices.

Because the increase in the hatch, as of July 1, had placed 13 percent

more chicks and young chickens on farms, supplies of poultry during the last

half of this year are likely to be greater than those in the last half of 1937.

The demand for poultry for storage, however, may be weaker than usual because

of the unprofitable poultry storage season just closing. Also, the demand for

poultry for consumption is likely to be weaker than in the last 6 months of

1937 because of the lower average level of consumer income.

The principal sources of egg supplies for the large cities during the

second half of the year are storage stocks. This y-ar supplies are likely to

be much below those of last year. It is expected that this shorter supply,

together with some increase in consumer incomes from present levels, will raise

egg prices in early 1939 above those prevailing early this year, and that these

factors together with a strong speculative demand will tend to maintain prices

at least at the 1938 levels in the early spring.

Feed situation

The feed situation continued favorable to the poultryman during July.
The feed-egg ratio at Chicago has remained about 20 percent below average -
that is, 100 pounds of poultry feed (at Chicago prices) could be bought with
only 80 percent as many Eggs as is required on the average. Rising egg prices
are likely to keep the feed-egg ratio favorable throughout the remainder of
1938 and for several months, perhaps, in 1939.


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The feed-egg ratio at Chicagc, specified weeks, as percentage of
1925-34 average
: Week ending as of 1938
Year : Jan. :Mar. :Apr. : May :Jurne :July :July :July :July :July : Oct.: Dec.
: 1 : 26 : 30 : 28 : 25 : 2 : 9 : 16 : 23 : 30 : 29 : 3
P: et. Pet. Fct. Fat. pct. Pot. Fet. Pet. Pct. Pot. Pct. Pct.

1937 : 167.8 148.0 168.0 162.8 148.8 151.7 146.0 157.4 148.3 134.7 125.5 131.6
1938 : 117.6 107.0 91.0 79.3 83.5 82.0 78.3 78.6 61.7

Young chickens on hand

The number of young chickens on hand per farm flock on July 1 is important
in two ways. This number largely affects the size of next year's laying flock and
hence egg production and egg prices; alsc affected is the supply, and price, of
poultry for marketing in the fall. The number cf young chickens per farm flock ao
July 1 this year was reported to be 13 percent larger than a year earlier.

Average number of chicks and young chickens per farm flock July 1

Year Number : Year Number Year Number

1927 ... 147.1 i 1931 ...! 129.3 i 1935 ...i 130.3
1928 ...: 133.1 :: 1932 ...: 137.5 :: 1936 ... 144.4
1929 ...: 144.7 :: 1933 ...: 141.5 :: 1937 ...: 117.4
1930 ...: 144.0 :: 1934 ...: 127.0 :: 1938 ..: 132.6

Poultry marketing

Receipts of dressed poultry at New York in July (to July 23) were 12 per-
cent above those of a ye-r earlier and 18 percent above the 1925-34 average. Be-
cause of a 13-percent increase in the hatch this year, it is likely that receipts
in the next 9 months will exceed those for the same period a year earlier.

Receipts of dressed poultry at New York, average 1925-34, annual 1937-38
: Week ending as of 1938
Year : Jan. : Mar. : Apr. : May : June : July : July : July : July
: 29 : 26 : 30 : 28 : 25 : 2 : 9 : 16 : 23
: 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000
: pounds pounds pounds pounds pounds pounds pounds pounds pounds
Average
1925-34 ..: 3,324 2,070 2,245 2,651 3,157 3,305 2,884 3,043 3,156
1937 .......: 3,720 2,349 3,419 2,342 3,375 3,739 3,041 2,981 3,238
1938 .......: 2,639 1,707 2,221 3,619 3,560 3,990 3,233 4,025 3,350

Poultry storage

Storage stocks of frozen poultry are now near their low point for the year.
By September the net into-storage movement will be well under way. While exact


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data are not available the course of chicken prices indicates a heavy loss to
poultry storage operators in the 1937-38 season. As shown in the next table
- --chicken prices were n.aterially higher during the into-storage period last fall
than they have been ..ince January.

Chicken prices

The farm price of chickens usually reaches a seasonal peak in April or
May and then declines until the end of the year. As may be noted in the chart
on page 2 the price relative to the 10-year (1925-34) average has declined
steadily since October. It was then 5 percent above average; in July it was
16 percent below average. Further declines, relative to average, are likely.

Farm price of chickens per pound
: Jan. : Mar. : Apr. : May : June : July : Sept.: Oct. : Dec.
Year : 15 : 15 : 15 : 15 : 15 15 15 : 15 15
: Cents Cents Cents Cents Cents Cents Cents Cents Cents
Average
1925-34..: 16.8 17.5 18.2 18.3 18.0 17.8 17.3 16.8 15.8

1936 ......: 16.5 16.6 16.9 16.6 16.4 16.1 14.9 14.0 12.6
1937 ......: 13.4 14.4 15.2 14.8 14.8 15.3 17.4 17.6 16.4
1938 ......: 16.7 15.9 16.2 16.1 15.7 15.0


Three factors will contribute to this tendency for a more-than-seasonal
decline in chicken prices. First, marketing in the last half of 1938 will
probably exceed those of a year before; second, storage losses in the past
season may weaken the demand for poultry for storage; and third, lower con-
sumer incomes will weaken the demand for poultry for immediate consumption,
because even though incomes rise some in the remaining months of 1938, they
probably will average below the second half of 1937.

Nonagricultural income, monthly averages 1925-34, monthly 1936-38
(Seasonally corrected indexes, 1924-29 = 100)

Year Jan. Mar.: Apr.: May June July Aug. ;Sept. Oct. Dec.
Average
1925-34..: 91.0 90.4 89.9 89.7 89.8 89.6 89.6 89.4 89.4 88.8

1936 ......: 81.5 82.5 83.1 84.1 85.1 86.8 87.4 87.9 89.8 100.9
1937 ......: 92.9 95.3 96.3 96.9 96.9 97.7 98.2 96.8 96.3 98.3
1938 ......: 89.9 87.9 87.1 85.4 84.9

Laying flock size

The size of the laying flock usually declines by about 25 percent from
January 1 to September 1. The decline to July 1 this year has been 20.8 per-
cent, about the same as the 1925-34 average decline for this period.

An analysis of the relationship of the change in the number of ycung
chickens on hand July 1 to the changes in the number of laying birds the fol-
lowing January 1 indicates the likelihood of a 5 to 10 percent increase in the


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size of the laying flock on January 1, 1939, over that of a year earlier. This
indication also includes an allowance for a more favorable feeding situation in
1938 than in 1937.

Average number of laying hens in farm flocks

Year *Jan. l.Apr. 1 May 1 *June 1.July l.Aug. 1.Sept.1.Nov. lDec. I
:Number Number Number Number Fumber. Number Number Number Number
Average
1925-34 ...: 87.5 82.0 77.4 73.4 69.6 66.8 66.1 75.7 81.9

1937 ........: 84,2 77.5 73.1 68.5 63.6 62.1 59.9 69.3 74.4
1938 ........: 77.6 73.8 68.6 65.0 61.5

Egg production

The July 1 rate of egg production per 100 hens and pullets of laying age
continued at a high level, 10 percent above the 10-year average for that date.
Production of eggs per farm flock an indication of total United States pro-
duction was 3 percent below thu 1925-34 average and was 1 percent above that
for July 1 last year. Production of eggs per flock is likely to increase rela-
tive to the seasonal average in November or December when the size of flock
begins to reflect the increased hatch.

Eggs laid per 100 hens and pullets of laying age in farm flocks

Year :Jan. 1 ,Feb. 1 :Apr. 1 : May 1 : June 1: July 1, Sept,l Dec. 1
:Number Number Number Number Number Number Number Number
Average
1925-34..: 16.5 24.2 52.8 55.1 49.5 42.2 32,4 13.9

1937 ......: 22.0 25.7 52.8 57.8 52.5 44.4 36,1 18.6
1938 ......: 22.7 32.2 57.9 59.1 52.9 46.5

Egg marketing

Receipts of eggs at New York are declining from their seasonal peak
reached during May. For the 4 weeks ending July 23 receipts were 11 percent
below those for the corresponding period last year and 16 percent below the
10-year average. During the next few months receipts are expected to continue
below those of a year earlier, and not until the end of 1938 are they likely
to exceed those of a year earlier.


Year


Average
1925-3


Receipts of eggs at New York, average 1925-34, annual 1937-38
: Week ending as of 1938
: Jan. : Mar. : Apr. : May : June : July : July : July
: 29 : 26 : 30 : 28 : 25 : 2 : 9 : 16
:1,000 1,000 1,000 1,000 1,000 1,000 1,000 :1,000
:cases cases cases cases cases cases cases cases
4..: 112.2 200.4 -25.1 217.9 168.3 160.0 146..3 141.


1937 ......: 152.0
1938 *.....: 129.2


190.7 213.8
151.8 170.5


193.4 148.5 151.5 144.2 127.5
176.7 143.4 136.8 113.8 113.7


: July
: 23
1,000
cases
127.1


117.0
116.8


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Egg storage

The size of the storage stock of eggs on August 1 is an important in-
fluence on fall and early winter egg prices. The storage stock this year is
quite low, both when compared with the 1925-34 average and when compared with
1937.
United States cold storage holdings of eggs July 1, average
1925-34, annual 1937-38 and percent of average
1937-38
r: : Percentage of
Year. Holdings : 1925-34 av.
: 1,000 cases Percent
Shell eggs
Av. 1925-34 .......: 9,261 100.0
1937 ........: 8,548 92.3
1938 ........: 6,251 67.5
Frozen eggs
Av. 1925-34 ........: 2,503 100.0
1937 e.......: 4,709 188.1
1938 ........: 3,956 158.1
Total
Av. 1925-34 .......: 11,764 100.0
1937 ........: 13,257 112.7
1938 ........: 10,207 86.8

Egg prices
Farm prices of eggs per dozen

Year : Jan. : Apr. : May : June : July : Aug. : Sept.: Oct. : Dec.
: 15 : 15 : 15 : 15 : 15 : 15 : 15 : 15 : 15
:Cents Cents Cents Cents Cents Cents Cents Cents Cents
Average
1925-34 ....: 31.0 18.7 18.7 18.6 20.0 22,0 25.7 30.0 35.7

1936 .........: 22.8 16.8 18.1 18.9 20.0 22.4 24.5 27.6 30.5
1937 .........: 23.1 20.1 17.9 17.6 19.4 20.4 22.9 25.2 26.0
1938 ..........s 21.6 16.9 17.6 18.2 19.9 ..... ...

A study of the relationship of the changes in storage stocks and in
consumer incomes to changes in farm egg prices during the fall months indi-
cates a probable advance of 5 to 10 percent in fall prices over those of 1937.
It is expected that prices in early 1939 will also be above those of early
this year. A possible increase in consumer incomes and a strong speculative
demand will tend t'o maintain prices in the early spring at least at 1938
levels


PES-20


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IVEQ2SITV OF FLORA


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