Competitive Position of the Midwestern Egg Industry

Excerpts from the report: Many egg producers in the Midwest have become increasingly concerned in recent years about the prices they receive for their eggs, particularly during the late spring and early winter when production is greatest. The growing dissatisfaction with producer price levels is an expression of some rather far-reaching troubles being experienced by the Midwestern egg industry. These difficulties are attributable to both external and internal forces. Externally, the egg industry is characterized by a rate of growth which is slower than that of the population. The per capita consumption of eggs has been declining, even though egg prices have declined in relation to prices of most other food products. The effects of the new competition, primarily from the South, which the Midwest has experienced in the last decade, have been intensified by the slow rate of growth of aggregate production of eggs. Cost-reducing innovations, particularly those related to scale of operations and changes in industry structure, have been adopted much more readily in other areas than in the Midwest. This report outlines the basic characteristics of the U.S. egg industry and discusses some of the regional changes which have occurred over time. Using this as a background, the current situation of the Midwestern egg industry and its future prospects are evaluated in detail. Included in the report are summaries of previous research studies and recent comments from industry meetings, the trade press, and economists working on the egg industry. Results of special and new analyses made by the Economic Research Service are also shown.