Poultry and egg situation

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UNITED STATES DEPARTMENT OF AGRICULTURE
BUREAU OF AGRICULTURAL ECONOMICS
WASHINGTON


JunE I, 1939


THE PO ULTR Y AND EGG 8 I T UA TI O N
m--------------------- m --------mmm --- mm-------------



U. S. STORAGE STOCKS OF SHELL AND FROZEN EGGS
( PERCENT OF PRECEDING YEAR )
PERCENT 1- J 1"1I-II


U.S DEPARTMENT OF AGRICULTURE


NUMBER OF CHICKS


OESTIMAfTED FROM STORAGE HOLDINGS OF 1 CITIES
MEG 41361 BUREAU OF AGRICULTURAL ECONOMICS


AND YOUNG CHICKENS PER FARM FLOCK IN THE U.S.
( PERCENT OF PRECEDING YEAR)


MUE SI43 BUREAU OFr AMICULIJRAL. ECOhOMICS


/


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U.LDEPAIMENiT OFr AGIIICULTURE











THE POULTRY AND EGG SITUATION AT A GLANCE


EGGS
IDOZENSI


7



6



5



4



3
CASES
THOUSANDS



200




150




100


CENTS
PER
DOZEN

35


JAN. MAR. MAY JULY JAN. APR. JULY OCT.
tAVERACE FOR Ig28.aflINSTEAD Of FOR 1925-54. AS FORMERLY SHOWN FOR PURPOSES OF COMPARISON
*INDEX NUMBERS. ADJUSTED FOR SEASONAL VARIATION


U.S DEPARTMENT OF AGRICULTURE


NESE 5401 BUREAU OPAGRICULTURAL ECONOMICS


FIGURE I





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THE POULTRY AND EGG SITUATION



Summary


Outstanding developments in the poultry and egg situation are the con-

tinued large receipts of eggs and the decline in wholesale egg prices, reports

the Bureau of Agricultural Economics. The lower egg prices are reflected in

the steadily rising feed-egg ratio. During the past month the ratio has been
I
much less favorable for egg producers than in the preceding month or last year,

and slightly less favorable than the 1928-37 average for May. The purchase of

eggs by the Federal Surplus Commodities Corporation for relief distribution,

which began on May 23, will help to support egg prices.

Receipts of eggs at the 4 markets reached a peak in the week ending May

20, and during the first 4 weeks of May were 18 percent above last year. The

into-storage movement of both shell and frozen eggs has been well above last

year during the past month. Storage holdings of shell and frozen eggs at 26

markets on May 27 were about equal to last year, but because of the accelerated

into-storage movement total storage holdings on August 1 may be considerably

larger than in 1938.

Prices received by farmers for eggs declined 0.3 cents from April 15 to

May 15. In 1938 average prices for the country as a whole increased about 2

cents between these two dates, and during 1928-37 they averaged about the same

from April 15 to June 15. Farm prices of eggs on May 15 were over 2 cents be-

low both that of last year and the 1928-37 average for this date.

Receipts of dressed poultry at New York during the first 4 weeks of May

were 17 percent larger than last year, and United States storage stocks of fro-

zen poultry on May 1 were 18 percent larger than in 1938. Poultry marketing







during the remainder of 1939 are expected to continue larger than in 1938 be-

cause of the larger number of hens and young chicks now on farms and the pos-

sibility that the increased hatchings of chicks and poults which has taken

place to date will continue during the remainder of the season.

The farm price of chickens declined a half cent from April 15 to May 15.

This was considerably rore than the usual seasonal decline and more than the

decline which occurred last year. The mid-May price was about 2 cents below'a

year earlier and below the 1928-37 average for May 1i.

Attention: Note the discussion on page 10
of this report regarding a possible change
from a feed-egg to an egg-feed ratio.

Feed situation

The feed-egg ratio'(based on Chicago prices) has risen steadily during
the past 2 months. This is in marked contrast to the sharp decline in the ra-
tio which occurred last year after April 16. During the 3 weeks ending April
15 of this year the ratio averaged 4 percent below the corresponding weeks of
1958, but during the first 3 weeks of May the ratio was 22 percent above last
year and 3 percent above the 1928-37 average. In terms of eggs, it required
about 1- dozen more to purchase 100 pounds of poultry ration at Chicago during
the week ending May 20 than in the corresponding week last year.

Feed-egg ratio at Chicago
(Dozens of eggs required to buy 100 pounds of poultry ration)

S: Week erdine as of 1939
Year : Feb.:Apr.:Apr. :May :M'ay :May :May :June:June:June:Aug.:Nov.
: 25 : 22 : 29 : 6 : 13 : 20 : 27 : 3 : 10 : 19 : 26 : 25
: QDo, Do", Doz. Doz. Doz. Doz. Doz. Doz. Doz. Doz. Doz. Doz.
Average
1928-37 ..: 6.01 6.89 6.86 6.83 6.75 6.86 7.04 7.12 6.94 6.82 6.26 4.04

1938 .....: 6.92 6.10 5.85 5.73 5.78 5.61 5.41 5.44 5.57 5.73 4.57 3.48
1939 .....: 6.21 6.69 6.65 6.84 6.99 7.14

Hatchings

The number of chickens from this year's hatchings in farm flocks on May
1 was about 5 percent larger than on that date in 1938 and 14 percent above
the 1928-37 average. The cover chart shows the extent to which the change from
the preceding year in numbers of chicks and young chickens on May 1 is an indi-
cation of their change on June 1. In only 3 years of the series has the direc-
tion of the change (whether an increase or a decrease) been incorrectly indi-
cated. In many years, however, the May 1 change has been greater than the
June 1 change.


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Average number of chicks and young chickens
on hand per farm flock


Year May 1 l June 1
: Number Number
: of chickens of chickens

1927 ....: 104.2 143.8
1928 ....: 88.7 130.2
1929 ....: 87.9 158.3
1930 ....: 107.7 145.7
1931 ....: 84.8 127.3
1932 ....: 85.6 130.6
1933 ....: 89.6 138.7
1934 ....: 76.6 124.4
1935 ....: 84.2 123.6
1936 ....: 88.4 138.0
1937 ....: 82.4 117.8
1938 ....: 94.5 131.7
1939 ....: 99.6


Reports from commercial hatcheries showed an increase of 18 percent in
the number of chicks hatched in April as compared with a year earlier. With
the season two-thirds over, it appears that total commercial hatchings this
year will be considerably larger than those of last year and will probably ex-
ceed the previous high record output of 1936.

Poultry marketing

Receipts of dressed poultry at New York have been increasing seasonally
and during the first 4 weeks of May were 17 percent larger than in the corres-
ponding weeks of 1938 and 37 percent above the 1928-37 average. Because of
the greater number of hens on farms and the larger hatchings of chicks and
poults so far this year, receipts during the remainder of 1939 probably will
continue larger than in the same months of 1938.

Receipts of dressed poultry at New York

Week ending as of 1939
Year : r. : Ap. : May : MWy : May : May : June : June : July
_: : ;9 : 6 : 13 : 20 : 27 : 3 : 10 : 29
:" ,, *- 1,000 1,C00 1,000 1,'W00 13.cO J ,''.C 1,000
:r lI(A. pounds pounds pounds pounds pounds poainds po' 'nds pounds
Average
1928-37 ...: 2,502 2,372 2,687 2,720 2,710 2,745 2,835 3,009 2,954


1938 ......: 1,991 2,221
1939 ......: 2,418 2,510


2,826 2,977 5,087 3,819 3,072 3,781 3,986
3,306 3,809 3,805 3,995


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Poultry storage

Storage stocks of frozen poultry in the United States on May 1 were 18
percent above stocks a year earlier but 26 percent below the record high stocks
on May 1, 1937. The out-of-storage movement has been declining rapidly, and
it appears that the midsummer carry-over of frozen poultry will be considerably
larger than last year.


Storage stocks of frozen poultry at 26 markets

Week ending as of 1939
: Storage : Out-of-storage movement : Storage
Year stocks : : : : stocks
: Apr. 29 : May 6 May 13 May 20 May 27 : May 27
: 1,000 1,000 1,000 1,000 1,000 1,000
: pounds pounds pounds pounds pounds pounds
Average
1928-37 .........: 47,885 2,814 2,514 2,165 2,113 38,279

1937 ............: 71,537 2,887 2,136 3,567 2,654 60,293
1938 ............: 43,700 1,942 1,445 1,622 1,756 36,935
1939 ............: 53,604 3,204 1,731 863 234 47,572


Chicken prices

The farm price of chickens declined a half-cent between April 15 and
May 15. This was considerably more than the usual seasonal decline and a
greater decline than that which occurred last year. The price on May 15 was
more than 2 cents per pound below both last year and the 1928-37 average for
May 15. The effects on prices of the larger supplies of poultry on farms and
in storage this spring compared with last probably will be partly offset by a
higher level of consumers' income and demand.


Price per pound received by farmers for chickens


Year


: Feb.
: 15


: Mar.
: 15


: Apr.
: 15


: May
: 15


: June
: 15


: July
: 15


: Aug.
: 15


: Oct.
: 15


: Dec.
: 15


:Cents Cents Cents Cents Cents Cents Cents Cents Cents
Average
1928-37 .....: 15.4 15.7 16.4 16.3 16.1 15.8 15.7 15.4 14.4

1937 .....: 13.6 14.4 15.2 14.8 14.8 15.3 16.8 17.6 16.4
1938 .....: 16.0 15.9 16.2 16.1 15.7 15.0 14.2 13.6 13.6
1939 .....: 14.2 14.3 14.4 13.9


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Domestic demand

The outlook continues to point to relatively stable domestic business
conditions and demand for farm products in 1939. Some improvement may occur
during the summer but no marked changes are in prospect. The index of non-
agricultural income declined about 1 percent from March to April but con-
tinued above the 1938 level.


Index numbers of nonagricultural income
(1924-29 = 100, adjusted for seasonal variation)

Year Jan. Feb. Mar. : Apr. :.May June July :Sept. Nov.


Average
1928-37..: 86.9 87.0 86.7 86.3 86.5 86.4 86.6 86.4 86.1

1937 .....: 92.6 93.7 94.8 95.7 96.8 96,8 97.9 96.9 94.6
1938 .....: 91.2 90.0 89.5 89.6 87.5 87.3 87.6 90.1 91.9
1939 .....: 92.4 92,2 92.2 90.9



Laying flock size

The seasonal decline in numbers of hens and pullets in farm flocks
during April was about equal to the 1928-37 average but was slightly less
than last year. The number of layers per farm flock on May 1 was about 5
percent above a year ago but about 4 percent below the 10-year average for
May I.

Average number of laying hens per farm flock on the first day
of the month


Year : Feb. Mar. Apr. : May : June : July : Aug. Nov.
:Number Number Number Number Number Number Number Number
Average :
1928-37..: 85.1 82.3 79.7 75.1 70.9 66.8 64.2 73.8

1937 .....: 82.5 80.0 77.5 73.1 68.5 63.6 62.1 69.3
1938 .....: 78.3 75.8 73.8 68.6 65.0 61.6 59.3 72.5
1939 ..... : 82.0 79.8 76.8 72.2


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Egg production

The average number of eggs laid per 100 hens continues high. Although
the rate of lay on May 1 this year was not quite equal to the rate in either
of the past 2 years, it exceeded the May 1 figure for any other of the 15
years of record and was almost 4 percent above the 1928-37 May 1 average.

Total egg production per farm flock on May 1 was 5 percent above that
of last year and about equal to the 10-year average for that date*


Eggs laid per 100 hens and pullets of laying age in farm flocks
on the first day of the month

Year Feb. Mar. I Apr. May s June July Aug. Nov.
-Number Number Number Number Number Number- Number Number

Average .-
1928-37..: 25.0 37.7 53.0 55.5 50.1 42.8 37.1 18.1

1937 .....s 25.7 39.2 52.8 57.8 52.5 44.4 40.4 21.1
1938 ..... 32.2 42.2 57.9 58.1 52.9 46.5 41.2 22.3
1939 .....s 31.9 41.4 56.3 57.6



Egg marketing

Receipts of eggs at New York during the first 4 weeks of May were 7
percent above receipts a year ago but 12 percent below the 1928-37 average
for the period. Receipts at New York reached a peak in the week ending April
29 and receipts at the four markets combined reached a peak in the week end-
ing May 20. In 1938 the peak in egg receipts at both New York and the four
markets combined was reached in the week ending April 9.


Receipts of eggs at New Yo*k

a Week ending as of 1939
Year s Apr. : Apr. : May : May i May : May : June : June z July
: 22 g 29 : 6 : 13 : 20 : 27. : 3 a 10 : 29
: 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
Average
1928-37...: 215.1 217.2 216.7 220.9 224.9 213.7 197.3 197.0 121.3

1938 .....,: 152.0 170.5 183.8 176.4 186.1 176.7 176.3 178.8 108.5
1939 ...... 187.3 203.0 196.2 197.7 198.1 181.8
S


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Egg storage

Cold storage holdings of shell eggs in the United States on May 1 were
4 percent larger than a year earlier but holdings of frozen eggs were 23 per-
cent smaller. Th., into-storage movement at 26 cities during the past month,
however, has been will ab.,vec last year for both shell and frozen eggs. As a
result, storage holdings of shell eggs at these markets on May 27 were 8 per-
cent above last year and of frozen eggs only 9 percent larger than a year
earlier.

One of the charts on thj cover page shows the relationship which has
existed in past years b.- c-en thj change from the preceding year in storage
stocks of shell and frc z?-n eggs on June 1 ar-d on August 1. On the basis of
this relationship and tnc estimated storage stocks on June 1 of this year, it
appears that storage holdings on August 1 may be from 5 to 10 percent larger
than last year on August 1.

Storage stocks of eggs at 26 markets

: -Week ending as of 1939
Year : Storage : Into-storage movement : Storage
: stocks : Ma : : : May27 stocks
: Apr. 29 : y 6 y 13 : 27 May 27
: 1,000 1,000 1,000 1,000 1,000 1,000
Shell : cases cases cases cases cases cases
Average
1928-37 ..: 2,590 514 486 476 436 4,502

1938 ..: 2,133 395 371 305 291 3,495
1939 ..: 2,103 429 434 425 369 39760
Frozen
1938 ..: 1,811 41 56 73 31 2,012
1939 ..: 1,356 91 132 128 127 1,834

Egg prices

The farm price of eggs declined 0.3 cents from April 15 to May 15.
Last year the price increased 1.7 cents while on the average prices show little
change between these two dates. Prices on May 15 were over 2 cents below prices
on that date last year or the 1928-37 average for May 15.

Price per dozen received by farmers for eggs

Year : Feb. : Mar.: Apr.: May : June : July : Aug. : Oct. : Dec.
: 15 15 15 15 15 : 15 :15 : 15 : 15 : 15
:Cents Cents Cents Cents Cents Cents Cents Cents Cents
Average a
1928-37 .: 21.6 18.0 17.4 17.5 17.4 18.7 20.6 27.0 30.3

1937 ......: 20.1 19.9 20.1 17.9 17.6 19.4 20.4 25.2 26,0
1938 ......: 16.4 16.2 15.9 17.6 18.2 19.9 21.0 27.1 27.9
1939 ......: 16.7 16.0 15.5 15.2


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THE FEED-EGG vs. EGG-FEED RATIO

Since 1925 the Bureau of Agricultural Economics has published a
feed-egg ratio showing the dozens of eggs required to buy 100 pounds of
poultry ration at Chicago. This ratio has been published in the Poultry
and Egg Situation since'its inception. An important reason for choosing
this type of ratio was that several other institutions were already
publishing feed-egg ratios in 1925. A feed-egg ratio and a feed-chicken
ratio, based on farm prices, are also published in the monthly production
report of the Crop Reporting Board.

Similar measures are computed and published for other commodities.
These, however, are commonly expressed as commodity-feed rather than feed-
commodity ratios. Notable examples are the hog-corn ratio and the butterfat-
feed ratio In order to obtain greater uniformity among commodities and
to prevent confusion, it has been suggested that the ratio for eggs should
be expressed as an egg-feed ratio rather than in the present formal

For the week ending May 20 the Chicago feed-egg ratio was 7*14,
compared with 6.05 two months ago. The steady rise in the ratio that
has taken place during the past 2 months indicates a less favorable situation
for poultrymen. The egg-feed ratio for the week ending May 20 would be
14.0 compared with 16.5 two months ago. The steady decline in this ratio
during the past 2 months gives the same indication of a less favorable
situation for poultrymen.

Advantages claimed for the egg-feed ratio include:

1. In general outlook meetings or reports, confusion is avoided
if the same type of ratio is used for all commodities.

2. The egg-feed ratio is more easily understood. When the egg-
feed ratio is high, profits are high and when the egg-feed ratio is rising,
egg production is becoming more profitable. An opposite relationship
exists between the feed-egg ratio and profits.

3. The egg-feed ratio places emphasis on the commodity. For any
individual feed ratio, farmers and dealers are primarily interested in
the particular commodity and therefore the commodity should be named first*

Disadvantages of an egg-feed ratio are as follows:

1. Farmers and the trade must adjust to the new basis.

2. Historical series of feed-egg ratios must be revised.

3, Other egg ratios are being published on a feed-egg basis* This
might be overcome by changing all egg ratios to an egg-feed basis.







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There is no objective basis for determining whether or not the ad-
vantages outweigh the disadvantages enumerated above, since it is largely
a matter of personal preference. For this reason, the Bureau would like
to know what those who use the information think about this question. Do
you favor, or are you opposed to the proposed change? We would appreciate
pro or con statemtnrs fiom poultrymen, dealers, poultry extension special-
ists, editors of poultry magazines, other marketing specialists, trade as-
sociations, etc.

CommFnts should be addressed to R. J. Foote, Division of Statistical
and Historical Research, Bureau of Agricultural Economics, Washington, D.C.




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