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Egg prices up as corn feeds ethanol boom

by 5m Editor
17 July 2007, at 10:11am

US - As the price of eggs in the supermarket continues to rise this summer — 26 percent to 30 percent in Maine since last December — Maine’s three major egg producers say sales are holding steady. But all admitted they are worried about the future.

"Eggs were the highest they ever were for the month of June," Bill Bell, consultant for Radlo Foods, which produces eggs in Turner and Leeds, said Friday.

The national consumer price for a dozen large eggs last month averaged $1.51, according to the American Farm Bureau Association, 33 cents or approximately 20 percent higher than at the end of 2006.

In Maine, egg producers are cutting back on production, opting not to make new investments and watching as 15 to 18 cents of every dozen goes into feed, a situation producers are blaming on the diversion of corn into ethanol production.

"Wow! I didn’t know it was quite that dramatic," Chris Grimbilas said this week after comparing corn costs for June 2007 with those a year ago and finding a 26 percent increase.

Grimbilas is office manager for Quality Egg of New England LLC of Turner, which produces 650,000 dozen eggs per week with 3½ million hens.

Grimbilas said Quality Egg imports 10 railroad cars a day of bulk ingredients, including corn, and mills them at its own feed mill in Leeds.

Several reasons account for the egg price rise, but Bell lays most of the blame on the diversion of corn to ethanol fuel markets. Ethanol, a fuel made from corn, has seen a 30 percent hike in production from January 2006 to January 2007, according to the U.S. Energy Department.

"The high price of eggs is definitely a reflection of the high price of corn," Bell said. "Twenty-seven percent of the corn crop is going into ethanol production."

Source: Bangordailynews.com

5m Editor