EGG INDUSTRY REPORT FOR JANUARY 2012

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DISCLAIMER: INFORMATION IN THIS REPORT DOES NOT REFLECT ACTUAL DATA. THE PROJECTIONS PRESENTED IN THE REPORT ARE BASED UPON SPECIFIC PRODUCTION STANDARDS AND INDICATE HISTORIC AND FORECASTED TRENDS ONLY.

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EXECUTIVE SUMMARY: EGG INDUSTRY

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1.         DAY-OLD PULLET PRODUCTION

2 158 000 Day-old pullets were hatched in January 2012. The average placement of 490 500 day-old pullets per week was 11 800 less (-2.4%) than the January 2011 placement.

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2.         PROJECTED LAYING FLOCK

The projected laying flock of 24 839 700 hens for January 2012 was 1 191 000 higher (+5.0%) than the January 2011 laying flock.

An average national laying flock of 25 148 000 hens is forecasted for May 2012. Compared to May 2011 this represents an increase of 1 220 000 hens (+5.1%) in the laying flock.

For the first five months of 2012 an average national laying flock of 25 008 000 hens is forecasted. This will be 1 245 000 more (+5.3%) than the corresponding average laying flock for 2011.

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3.         FORECASTED EGG PRODUCTION

The weekly average egg production forecasted for May 2012 is 387 000 cases per week. This will be 19 100 cases more (+5.2%) than the weekly production for May 2011.

An average production of 384 800 cases per week is forecasted for the first five months of 2012. This will be 19 300 cases more (+5.3%) than the production during the first five months of 2011.

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EGG INDUSTRY : KEY RESULTS - January 2012
(Projections are based on day-old pullets placed per week to January 2012)
	Hatch	Calendar	Day-old Pullets		Laying	Eggs Produced
	days	Days	placed		hens	(Cases)
Month on Month	/Month	/Month	/Month	/Week	Average	/Month	/Week
January 2012	22	31	2,158,013	490,458	24,839,706	1,691,618	381,978
December 2011	22	31	2,171,975	493,631	24,663,790	1,679,780	379,305
Change			-13,961	-3,173	175,916	11,838	2,673
% Change			-0.64%	-0.64%	0.71%	0.70%	0.70%
Year on Year	/Month	/Month	/Month	/Week	Average	/Month	/Week
January 2012	22	31	2,158,013	490,458	24,839,706	1,691,618	381,978
January 2011	21	31	2,109,606	502,287	23,648,621	1,610,979	363,769
Change			48,407	-11,830	1,191,085	80,639	18,209
% Change			2.29%	-2.36%	5.04%	5.01%	5.01%
Year to date	/Period	/Period	/Period	/Week	Average	/Period	/Week
Full year forecast	/Period	/Period	/Period	/Week	Average	/Period	/Week
Jan>Dec 2011	260	365	25,665,248	493,562	24,159,695	19,389,896	371,861
Jan>Dec 2010	261	365	24,517,064	469,676	23,091,376	18,525,603	355,286
Change			1,148,185	23,887	1,068,319	864,294	16,575
% Change			4.68%	5.09%	4.63%	4.67%	4.67%
NOTE:
Month or Period: Refers to a calendar month or period
Week: Refers to an average 7 day week of which all 7 days fall within the specified month or period
ASSUMPTIONS
1: All surviving day-old pullets placed will be transferred to the laying flock at 18 weeks of age.
2: Depopulation age: Feb. 2006 to April 2009 - 69 weeks, April to Aug. 2009 - 70 weeks, Aug. to
Nov. 2009 - 71 weeks and Nov. 2009 to date - 72 weeks
3: No deviation from the accepted production standards and procedures, due to disease, changes in
production planning, etc. is expected.

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PLEASE NOTE:

The scales on the graphs have been adjusted in order to view trends clearly.

• The source base of stats on day-old pullets placed has been extended to all suppliers but one (monthly stats are derived). 
• The standards approved in 2005 were introduced in January 2005 and are still applicable. 
• Based on the weekly depopulation ages reported to SAPA, quarterly average ages of depopulation were calculated and introduced into the model as follows:
• from Jan 2005 to Jun 2007 = 70 weeks
• from Jul 2007 to  Apr 2009 = 69 weeks
• from Apr 2009 to Aug 2009 = 70 weeks and
• from Aug 2009 to Nov 2009  = 71 weeks
• from Nov 2009 = 72 weeks

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TABLE 1:  EGG PRODUCTION STANDARDS:
The projected national laying flock and potential cases of eggs produced per week are based on the following standards:      

	2005 Production Standards
Fully implemented:	January 2006
Survival rate during the rearing phase	96%
Mortality per week during the laying cycle	0.13%
Laying cycle (see note above)	18 to 69/72 weeks of age
Average hen-day production	79%

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DAY-OLD PULLETS PLACED PER MONTH
The number of day-old pullets produced per month is presented in Graph 1. Variations between consecutive months may be attributed to varying numbers of hatching days per month.
Graph 1:

2 158 013 Day-old pullets were hatched in January 2012. This is 48 407 more (+2.3%) than the number hatched in January 2011.

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The average number of day-old pullets placed per week per month is presented in Graph 2. 
Graph 2:

On average 490 458 day-old pullets were placed per week during January 2012. This is 11 830 less (-2.4%) than in January 2011.

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18-WEEK OLD PULLETS TRANSFERRED TO THE LAYING FLOCK.
In Graph 3, the projected number of 18-week old layer replacement pullets housed per month, is indicated.
Graph 3:

During the five months to May 2012 an average of 475 250 layer replacement pullets will be placed per week. This will be 11 000 more (+2.4%) than the corresponding placement to May 2011.

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PROJECTED NATIONAL LAYING FLOCK AND EGG PRODUCTION

Graph 4 depicts the projected national laying flock on the left-hand scale and egg production, in 30 dozen cases per week, on the right-hand scale. 

Graph 4:
 A laying flock of 25.148 million hens is projected for May 2012. This will be 1 220 100 hens more (+5.1%) than in May 2011.

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AVERAGE LAYERS PER ANNUM
The average number of layers in production per annum is presented in Graph 5.
Graph 5:

The average number of 26.008 million layers for the first five months of 2012 will be 1.254 million more (+5.3%) than in the first five months of 2011.

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CASES OF EGGS PRODUCED PER WEEK PER MONTH
The cases of eggs produced per week per month are indicated in Graph 6.
Graph 6:

Production of 386 983 cases per week is forecasted for May 2012. This will be 19 123 cases more (+5.2%) per week than in May 2011.

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CHANGE IN EXPECTED CASES PER WEEK vs. PREVIOUS MONTH

Graph 7 presents the movement in expected average cases produced per week (indicated in Graph 6), compared to the previous month. 
Graph7:

From January 2011 to May 2012 an average monthly growth of approximately 1500 cases per week has been maintained.

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AVERAGE CASES OF EGGS PRODUCED PER WEEK PER ANNUM
The annual average cases of eggs produced per week is presented in Graph 8
Graph 8:

The production of 384 800 cases per week for the first five months of 2012 will be 19 283 cases more (+5.3%) than the production during the first five months of 2011.

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% CHANGE IN THE VOLUME AND PRICE OF EGGS vs. THE PREVIOUS YEAR (Egg price after Discounts, Rebates and Advertising)

Graph 9 displays the relationship between the egg supply and producer price of eggs.
The year on year % change in egg production and the % change in the egg price are shown.
Graph 9:

In this graph the X-axis represents zero change in actual volume and price compared to the previous year. Throughout 2009 negative growth in production volumes was recorded while egg prices increased by as much as 22%. The PPI decreased slightly during 2009 and this resulted in a PPI deflated egg price increase of up to 26% as indicated in the graph. Since January 2010 positive growth in egg production was projected and the producer price for eggs decreased relative to the overall PPI.

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MARKETABLE EGGS PER GRADE
Egg grade-out is based on the following assumptions:

• up to April 2009 it was assumed that a laying flock consisted of 80% silver type and 20% brown layers,
• from May 2009 the actual number of silver and brown type day-old pullets produced per week are used,
• under-grade eggs (Small + Dirties + Cracks) amount to 7% of all eggs produced, and
• egg weight limits per grade as per grade-out regulations are applied.

Graph 10 presents the estimated number of cases of eggs per grade per week.
Graph 10:

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% OF MARKETABLE EGGS PER GRADE
Graph 11 presents egg production as a % of marketable First Grade eggs.
Graph 11:

LAYING HENS DEPOPULATED

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TOTAL DEPOPULATION PER MONTH:
The monthly number of layers due for depopulation at 72 weeks of age is indicated in Graph 12.
Graph 12:

PLEASE NOTE: For the purposes of this model March, May and July 2012 were calculated as 5-week months. The other months have four weeks.

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5 WEEKLY MOVING AVERAGE OF LAYERS TO BE DEPOPULATED:

In order to accommodate possible variations in depopulation age, a five weekly moving average of layers to be depopulated was calculated and is presented in Graph 13.
Graph 13:

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LAYERS PLUS BROILER BREEDERS DEPOPULATED
The total number of commercial layers and broiler breeders due to be depopulated is shown in Graph 14.   
Graph 14:

FEED USAGE OF THE NATIONAL LAYING FLOCK
The total expected tons of feed consumed by the national laying flock (left-hand scale) and the average gram of feed intake per hen per day (right-hand scale) are presented in Graph 15.
Graph 15:

The fluctuation in daily feed intake is caused by projected seasonal temperature variations in open type housing. The average feed intake during 2011 was 113.9 gram per hen-day.

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APPENDIX A – SAPA: WEEKLY DATE SCHEDULE

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