Food Business News - August 30, 2011 - (Page 24)

Market Insight egg prices, egg products still rising Continued from Page 1 reducing supplies available to processors. The average price of large Grade A eggs increased about 40c a dozen, or 50%, from late May lows to $1.19½@1.30½ the week ended Aug. 19, with about 75% of the increase coming in August, according to U.S. Department of Agriculture data. Mr. Kellert noted the spread between graded large and extralarge eggs had widened to almost 20c a dozen, the most he could remember in the past 35 years, but currently had narrowed to around 11c, indicating better supplies of larger eggs. Prices for nest run eggs broken by processors surged more than 40% from summer lows of 54@58c a dozen in late May and early June to 78@82c at the end of August. Some processors paid premiums of 2@3c a dozen above quoted levels to secure enough supply to keep operations running and fill orders. Egg prices in late August were more than 60% above values of a year ago, when prices were 50@53c a dozen in late May, fell to 38@41c in late June, then rose to 48@51c in late August before falling to four-year lows of 30@33c in late September of 2010. Breaking stock prices edged up a few more cents a dozen early last week but began to ease late in the week. Processors indicated they could get supply at quoted prices rather than paying premiums as was the case a week earlier. Trade sources indicated chickens were eating more solid food, which should improve the size and number of eggs laid. “Size is coming back up,” Mr. Kellert said. Even though processors raised prices for egg products almost up 16% and whites were up only about 3%. Liquid egg products, which are the first to react to higher egg prices, saw whole and yolks up more than 20% but whites were up only 4% since mid-July. Yolks especially were in tight supply. Traders expect egg product prices to increase a bit more in early September, reflecting the lag to higher egg prices. Trade sources said processor inventories are tight or largely committed. Inventories were reluctant to raise prices enough or in advance of anticipated higher egg prices. One processor noted that while buyers tend to resist rising prices, they also want lower egg prices reflected quickly in product prices. Rising egg product prices had a mixed effect on sales. In some cases, users increased orders in an attempt to beat the next price increase, processors said. But other buyers ordered only for immediate needs to keep highpriced inventory at a minimum. The result was mostly slow to moderate trading activity the past few weeks. Regular customers were most likely to get supplies at the best prices, one processor said, while new customers sometimes were turned away. Many large users already were booked through the end of the year, which meant processor supplies often were committed. Typically, egg and egg product prices decline about this time of year as production increases. This year, trade sources expect some correction, but possibly not as much as usual because growers facing high feed costs are expected to keep production in check. In addition, Hurricane Irene was expected to have a shortterm impact as consumers swept eggs and other basic food products off store shelves along the East coast. People tend to make hard boiled eggs ahead of major storms so they have eggs in case of power failures. FBN Price increases since mid-summer Grade A large eggs Nest run eggs Dried whole eggs Frozen white eggs Liquid yolks 50% 40% 12% 3% 20% RON STERK weekly to cover soaring egg costs, most of those increases failed to keep pace with the 40% increase in nest run egg prices since mid-July through late August. Since mid-July, dried whole egg values increased about 12%, dried blends and yolks about 10% and dried whites less than 5%. Frozen whole egg prices were up about 13% during the same time, frozen yolks were limited in part because they could barely get enough eggs to process in late July and early August, and because they did not want to be holding high-priced inventory when egg values eventually drop. Processors passed on price increases to some degree, but in some cases saw tighter or even negative profit margins, especially for dried products, as they were 24 FOODBUSINESS NEWS ® August 30, 2011

Table of Contents for the Digital Edition of Food Business News - August 30, 2011

Food Business News - August 30, 2011
Web Contents
Editorial - Food itself plays major role in demand for food
Private equity group acquires Minnesota-based candy company
F.D.A. seeks more comments on phytosterols
MegaMex acquires Fresherized Foods
Nestle updates nutrition labeling system
OpenGate Capital to acquire Dean Foods facility
Walgreens launches Nice! store brand
Hormel Foods earnings up 15% in quarter
With charges, Heinz income down 6% in quarter
Consumers dissatisfi ed with frozen meal portions
Kraft cutting coffee prices 6%
California Pizza hires G.J. Hart as president, c.e.o.
Accountability at the heart of new food safety law
General Mills, Batter Blaster win G.M.A. innovation awards
Rowland acquisition boosts Smucker earnings
Coca-Cola, partners to invest $4 billion in China
July milk production up 0.8%
Washington - ' Fit for Life' bill targets childhood obesity
Soaring egg prices, egg products still rising
Health and Wellness - From digestive health to weight management
Ingredient Innovations - Tropical assistance
New Product Trends - Natural, low-calorie refreshment
New Food Products
INGREDIENT MARKET TRENDS - Statistics Canada forecasts record canola crop
Ingredient Markets
Supplier Innovations and News
Ad Index
Food Business in the News
Feature - Hormel Foods earnings up 15% in quarter
Feature - Natural, low-calorie refreshment
Feature - Soaring egg prices peaking, egg products still rising

Food Business News - August 30, 2011