Market Update
February 2016
Overview
Cage-free and avian influenza continue to be the hot topics within the egg industry. There were ten additional avian influenza
outbreaks in January. The affected sites were all turkey facilities, but one flock of chickens was depopulated due to the close
proximity to the infected site. Companies are also continuing to make commitments to sourcing a cage-free egg supply. Fifteen
additional companies have made commitments to a cage-free supply over the past 30 days.
Market Pricing
Urner Barry 30 Day Change
$7.00
$6.00
Shell LG
Bkr-L
$4.00
Liquid WE
Liquid White
$3.00
Liquid Yolk
$2.00
Dried WE
Dried Yolk
$1.00
Dried Whites
6
6
/1
16
6
/1
14
Exports and Imports
2/
6
/1
12
2/
2/
16
/1
10
16
8/
2/
2/
16
6/
4/
2/
2/
6
16
2/
2/
6
/1
31
6
/1
29
1/
6
/1
1/
6
/1
27
25
1/
6
/1
23
1/
/1
/1
21
1/
19
1/
1/
6
$0.00
Grain Market
Corn prices have been slowly rising over the past month.
Since early January futures have risen from $3.50/bu to
around $3.70/bu. The release of USDA’s Crop Production
summary for 2015 contributed to the upswing in market
pricing. The USDA is predicting corn stocks for the
2015/2016 marketing year to end at a little over 1.8 billion
bushels. This will be the highest total since 2005/2006.
The soybean market is expected to remain steady for the
foreseeable future. 2016 soybean production is expected to
be slightly higher than 2015 production.1
Supply and Demand
The Egg Industry Center has reported that half of the
layers that were lost during 2015 have been repopulated.
If repopulation continues at this rate, nearly 100% of the
farms that were affected should be fully operational by the
end of 2016.2
Egg Supply & Demand as of 1/28/16
DEMAND
LIQUID EGG
FROZEN EGG
US Dept. of Agricultre
DRIED EGG
YOLK
ALBUMIN
WHOLE
YOLK
ALBUMIN
WHOLE
YOLK
ALBUMIN
WHOLE
SUPPLY
Lower export numbers are helping to bridge the supply gap
that the market is experiencing. Due to the restrictions in
place from the avian influenza outbreak, U.S. egg exports in
2015 were down 15% compared to 2014. The combined
value of table eggs and egg product exports in 2015 was
238.7 million dozen.7
Officials from Mexico’s SENASICA, Mexico’s health, food
safety and inspection agency, are scheduled to visit officials
from the U.S. Animal and Plant Health Inspection Service
(APHIS) at the end of February. The agenda for the meeting
includes the topic of lifting the import ban that is currently
in place in Mexico. APHIS hopes to have the ban lifted on
14 of the 15 states that are currently banned from exporting
to Mexico. Indiana would be the last remaining state with a
ban in place due to the ten HPAI outbreaks in January.8
U.S. egg
imports
are
helping
bridge
the
supply
gap.
As of
U.S. Egg Product Imports as of November 2015
9,000
8,000
7,000
LEQ Tonnes
Price/Pound
$5.00
December egg production in the U.S. totaled 8.05 billion,
down 8% from the year prior. As of January 1, there were
347 million layers in the U.S., which is 5% less than
January 2015.6 The dried egg production for 2015 was
down 30% compared to 2014. Last year resulted in the
lowest dried egg production since 1993.1 Egg imports, fewer
exports, and farms continuing to repopulate are helping
bridge the supply gap.2
Dried Yolk
6,000
5,000
Frozen Yolk
4,000
Dried Whole
3,000
Frozen Whole
2,000
Dried Whites
1,000
Frozen Whites
0
2013
2014
2015
Source of Data: U.S. Department of Commerce, Bureau of Census
November 2015 $37.2 million worth of egg products have
been imported to the U.S.
Rembrandt Foods®
As of January 8, There also has been over 73.7 million
dozen shell eggs imported to be used as breaking stock.
The shell eggs intended for breaking stock has provided
approximately 7.8 million liquid pounds to the market.
These shell eggs have been imported from thirteen different
countries.
The Cage-Free Push
Companies continue to make commitments towards sourcing
a cage-free supply. There have been over 85 companies
to announce a switch to cage-free eggs. Nearly half of
these announcements have come over the past two years.
Approximately 25% of the companies have committed to a
transition by 2025. Rembrandt estimates that in order to
meet the cage-free demand from the companies that have
made commitments thus far it will require 100 million cagefree birds to be in production by 2025. This will require
the market to add an additional 77 million cage-free birds
by 2025. We expect this number to increase as additional
companies make transitions to cage-free supply.
Many egg suppliers are committing to cage-free production.
Experts estimate it will take the industry 5-10 years to be
able to transition the housing to meet the current demand.
Conventional housing is expected to still be a major source
of egg supply in 2025.9 The transition requires such a long
time line due to a variety of factors. There are only five or
six manufacturing companies that make cage-free systems.
A majority of the manufacturing companies are located
in Europe. According to Chad Greggory of the United Egg
Producers, the price of building a cage-free housing system
compared to a conventional system is at least double
the cost. The equipment cost in a conventional setting is
typically $15 per bird, in a cage-free setting the cost is
between $30 and $35 per bird.10
One of the largest cage-free supply commitments has come
from McDonald’s. McDonald’s uses an estimated 2 billion
eggs per year. A survey of U.S. egg producers represented
that one-third of the industry believes that McDonald’s
commitment will result in the end of conventional housing
for food service in the United States.9
Rembrandt Foods® is continuing to work towards sourcing
additional supply to meet customer demands. We are
committed to becoming a leader of cage-free egg supply.
Please work with your sales representative on solutions for
your cage-free needs.
Market Trends
Breakfast continues to be the industry’s fastest growing meal
of the day. Adding uniqueness to menu options such as
ethnic flavors, healthy options and portability are expected
to be the top drivers for breakfast. The top five breakfast
trends for restaurants include breakfast burritos, all-you-caneat brunches, egg white omelets and sandwiches, traditional
ethnic breakfasts, and ethnic-inspired breakfast items.11
An article in the Harvard Business Review stated that the
clean label trend is here to stay. Although the term can
be used very loosely, the article sited that a clean label
means having fewer ingredients which are clear about their
origins and recognizable. This ties closely with all of the
egg replacers that hit the market during last year’s avian
influenza outbreak. While egg replacers may have been
a short term solution, eggs are a clean label product that
provide unmatched functionality.3
According to a report published by Deloitte, traditional
influences such as price, taste, and convenience are less
influential to today’s consumers. This isn’t influenced by
a specific generation, income level, or region but seems to
be consistence across all of the groups. The evolving trends
among consumers include health and wellness, safety, social
impact and experience.4
2016 trends are suggesting that consumers want to
experiment with a variety of ingredients such as sour flavors,
fermented and preserved foods, and traditional fats.5
The content in this market update is meant for marketing and informational purposes only, and is not intended as, nor should be regarded as, advice. The information presented in this article is obtained and compiled
from sources Rembrandt Foods® believes to be reliable. We do not claim responsibility for the accuracy, validity, timeliness, or completeness of the content or data provided. The content of this article is current as of the
date of this update and is subject to change without notice.
1.Egg Sector Update - Cage-Free Fever Still Sweeping the Nation but Attenion Now Focused on Recent AI Flare-Up. (2016). Informa Economics.
2.Egg supply rebounding. (2016). Retrieved February 18, 2016, from http://www.aeb.org/blog/food-manufacturers/post/egg-supply-rebounding
3.Harvard Business Review talks clean label. (2016). Retrieved February 18, 2016, from http://www.aeb.org/blog/food-manufacturers/post/harvard-business-review-talks-clean-label
4.‘The U.S. consumer has changed’ (n.d.). Retrieved February 18, 2016, from http://www.foodbusinessnews.net/articles/news_home/Consumer_Trends/2016/01/The_US_consumer_has_changed.aspx?ID={95B19EC6B6A6-4F44-BCF2-F762D62776AB}
5. How ingredient trends are developing in 2016. (n.d.). Retrieved February 18, 2016, from http://www.fooddive.com/news/how-ingredient-trends-are-developing-in-2016/412837/
6. Chicken and Eggs. (2016). USDA. Retrieved from http://usda.mannlib.cornell.edu/usda/current/ChicEggs/ChicEggs-01-22-2016.pdf
7. Cost of AI on 2015 trade comes home to roost Combined poultry, egg export value drops 26%. (2016). Monday Line. Retrieved February 19, 2016, from http://images.publicaster.com/ImageLibrary/account894/
documents/MondayLineFeb.15-16.pdf
8. Mexico may make AI visit to U.S. this month Should help to end ban on 15 remaining states. (2016). Monday Line. Retrieved February 19, 2016, from http://images.publicaster.com/ImageLibrary/account894/
documents/MondayLineFeb.8-16.pdf
9. O’Keefe, T. (n.d.). Cage-Free Eggs by 2025. Egg Industry, 121(2).
10. Will cage-free become the new norm? (n.d.). Retrieved February 19, 2016, from http://www.foodbusinessnews.net/articles/news_home/Consumer_Trends/2016/01/Will_cage-free_become_the_new.
aspx?ID={7C7BF469-28D1-4BB6-96A5-5872D34A5FAF}
11.Top 5 breakfast trends for restaurants. (n.d.). Retrieved February 19, 2016, from http://nrn.com/food-trends/top-5-breakfast-trends-restaurants#slide-0-field_images-126141
Rembrandt Foods®