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Cal-Maine Foods, Inc. Message Board

  • netlosstoo netlosstoo Jan 3, 2013 3:37 AM Flag

    Other stuff ... chickens

    Check out:
    USDA Weekly National Whole Broiler/Fryer Report

    Kind of reminds me of 2003 for the egg industry. Thinking PPC, SAFM and TSN could all have special results in 2013.

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    • Which came first ... the chicken rally or the egg rally .... it was the egg rally

      May reportedly the most profitable month ever for the chicken industry ... GA dock and Urnerbarry are at or near all time highs for whole chicken and some parts, like breast meat.

      ==Kind of reminds me of 2003 for the egg industry. Thinking PPC, SAFM and TSN could all have special results in 2013.==

    • Historically, egg producers have done better when feed prices are on the rise or are a threat to rise. Egg producers take heed and have quickly adjusted to the threat of higher input costs. The result: egg prices have often risen disproportionately more than feed prices.

      The chicken industry has been slower to react to the threat of higher feed prices and have had some huge loss years when feed costs have gone up and no adjustment was made to chicken production.

      This last year has been a bit different. As feed costs have risen, chicken producers have gotten their production in line and they now enjoy record prices. These good prices could remain, even as feed costs are expected to drop with the “new” crop. Egg producers however, have increased egg production even as feed costs have risen. Layers now number greater than 291 m. On top of this, hens have become more and more efficient every year adding about 1% to production in each of the last few years.

      My fear … what happens if corn drops to $5 or even $4 … will egg producers ramp up production even more? What happens if generics drop into a USDA L 80 cent to $1.10 range through the holidays … will this put pressure on CALM’s precious specialty egg margins?

      Hatch numbers are not obnoxiously high and the average age of the flock is very high right now. Dried egg inventories are very low and per capita consumption added 2 eggs in 2012. All of these indicators are very positive.

      Meanwhile, chicken producers are in a state right now where breeders are fairly low and they will not be able to add a great amount of production volume over the next six to nine months.

      Kind of a mixed bag of uncertainty in the short run … but longer term … no worries .. be happy.

      Sentiment: Hold

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