July 17, 2007

 

High corn prices may cause egg shortage in the US next summer

 

 

Higher corn prices along with other reasons, may lead to a reduction in egg production that might cause the US to suffer from a egg shortage in the next few years.

 

Despite higher egg prices in recent months, egg demand has not diminished, highlighting the huge demand for eggs.

 

Egg sales in Maine are still holding steady despite a 30-percent price increase since last December, according to three major egg producers in the state.

 

The national consumer price for a dozen large eggs last month averaged US$1.51, according to the American Farm Bureau Association, almost 20 percent higher than at the end of 2006.

 

In Maine, egg producers are cutting back on production and new investments as feed prices rise as more corn is being diverted to make ethanol.

 

Corn costs from June was 26 percent higher than the same month a year ago.

 

Meanwhile, ethanol production, which consumes a quarter of the corn crop, has climbed 30 percent in 2006, according to the US Energy Department.

 

Higher prices are here to stay and the industry is warning of a corn and egg shortage next summer, egg producers said.

 

Normally, egg producers would choose to expand when egg demand is good and market prices are high, but that is not happening currently due to worries over potential bans on laying cages. Laws banning laying cages are currently being debated in several states and there may be huge costs involved for egg producers if they are approved.

 

Egg producers say this double whammy has led to the lowest number of laying hens in the country since 2003, which meant a potential shortage of eggs.

 

Dr. Robert Wisner, an Iowa State University grain market analyst expects a huge corn shortage in August which would worsen in the next two years.

 

Egg demand is plain to see: despite prices rising 30 percent, sales remain steady as people need eggs, industry experts said.