Mintec prices for large eggs, based on the averages of 12 cities, have hit a two-year low in May due to an oversupply issue. As of June 26th, prices are down 40% y-o-y but have risen slightly by 13% from May lows.
Behind the oversupply is a large and productive hen crop. According to the July Chicken and Eggs USDA report in May, the number of laying hens stood at 397,737,000, a 1.5% y-o-y rise. This vast quantity of hens in the US is at a near record-high. At the same time, production rates in May stood at 2,403 eggs per 100 layers, which is a 1.7% y-o-y growth. The result was the production of 9.16 billion eggs during June, a 2% y-o-y rise.
In addition to the vast US hen crop, the mission for companies to source eggs entirely from cage-free hens is also having an impact on prices. In order to meet governmental targets and consumer demands, major companies are aiming to buy eggs from a higher percentage of cage-free hens compared to battery hens. This has sparked barn upgrades across the US in order to give hens more space and meet this new demand. As a result, the increase in cage-free eggs has reduced the market premium over regular eggs and has narrowed prices between the two. This increasing supply of cage-free eggs is exacerbating the general egg glut in the US market, driving prices down.
The lack of export demand for US eggs must also be considered. In the first half of the year, US egg exports were down 12% y-o-y due to trade tensions with major trading partners and a global glut of eggs. However, industry professionals in the US hope that the multi-year egg price lows can stimulate purchases from foreign buyers and prevent egg prices from slipping any lower.