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Answer found to age-old question: 'Which comes first, chicken or egg?'

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One of history's thorniest questions - which comes first, chicken or egg – has found an answer.

In pricing terms, at least.

The egg is certainly proving the leader in terms of rising values in the US, where prices have "spiked" the US Department of Agriculture said.

Values in the benchmark New York table egg market are expected to average $1.64-1.67 per dozen for the September-to-December period overall, a rise of 16% year on year.

However, that disguises a particularly strong recent performance.

"At the beginning of November, wholesale prices for Grade A large eggs in the New York market were in the high-$1.20s per dozen," the USDA said.

"But over the next for weeks prices peaked at $2.18 per dozen."

'Those birds were huge'

By contrast, values of chicken meat are losing some buoyancy, thanks to a rise in output reflecting higher bird weights, encouraged by lower grain values, and with the impact of rising bird numbers feedings through.

Indeed, US broiler output in the first week of December soared 12.6% year on year.

"Broiler slaughter was up 8.2% from year‐ago levels. And those birds were huge — 4% bigger than one year ago," Paragon Economics and Steiner Consulting said, also noting a counter-seasonal trend.

"The week's 734.7m pounds of output is the highest of the year at a time that usually marks the seasonal low point."

The USDA said that with "higher year-over-year production expected in fourth-quarter 2014 and into 2015, broiler prices are expected to continue under some downward pressure".

Price mystery

The outperformance of table egg prices is proving more difficult to explain, with the USDA saying it is "uncertain" of the reason behind the increase, which comes at a time of raised output.

US table egg production, at 5.9bn dozen, was 3% higher in the first 10 months of this year than in the same period of 2013.

And, with the laying flock bigger, up 2% year on year at 303m hens in October, egg production is "expected to remain higher than the previous year through the remainder of 2014 and into 2015".

Breakages, exports

"Some possible factors are greater numbers of eggs being broken and a strong increase in exports of table eggs," the USDA said, estimating breakages at 399m dozen eggs in September and October, up 8% year on year.

While the USDA gave no explanation for the breakages, they could reflect a younger flock, or differences in feed.

Exports, meanwhile, soared 25% year on year to 25.1m dozen in October,

"If increases in eggs broken and table egg exports continued in November, they may have combined to put upward pressure on table egg prices."

California rules

However, the rise in egg prices comes as no surprise to many observers, who have forecast improved chicken welfare rules in California having knock-on effects.

With California importing about one-third of its eggs, the rules mean egg companies in exporting states, such as Iowa, the top producing state, will have to comply too.

Cal-Maine Foods, the world's biggest table egg company, which in September warned that California's legislation "could have a significant impact on egg production throughout the country" may give a further insight when it reports results next week.

By Agrimoney.com

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