USDA: California cage rule seen upping egg prices

by Laura Lloyd
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WASHINGTON — Wholesale prices of Grade A large shell eggs in southern California were $1 per dozen higher than comparable eggs in New York City in early January 2015, a significant widening of the price spread between the two markets and likely a reflection of new chicken cage size regulations in California, said the Economic Research Service of the US Department of Agriculture.

“In the short term, the new regulations seem to have widened the historical difference between the California market and other parts of the United States,” the USDA said in its Jan. 16 Livestock, Dairy, and Poultry Outlook report.

“New cage-size regulations now in effect in California impact not only California producers, but table egg producers in other states that supply the California market,” the USDA noted.

Volatility in wholesale shell egg prices was a dominant market feature during the final two months of 2014, partly a result of market uncertainties created by the California law that went into effect on Jan. 1 as well as strong exports of shell eggs to Mexico in November. The fourth-quarter 2014 spike in prices was “exceptional,” the USDA said.

In the last week of October 2014, wholesale prices for Grade A large eggs in the New York market averaged $1.28 per dozen, then spiked to $2.19 per dozen by November’s end before falling back 42 percent to $1.16 per dozen in the first week of January 2015, the USDA said. Wholesale prices of eggs in southern California, though, surged from about $1.40 per dozen at the end of October to $2.68 per dozen by the middle of December and then declined only 15 percent to around $2.28 per dozen in early January, retaining a $1.12 premium above New York City eggs in the same time period.
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