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Egg prices remain depressed
Dec 14, 2018

Eggs, once known as "rocket eggs" because of soaring prices, have fallen all the way down this year. Since the Spring Festival, the retail price of eggs has been running at a low level, and many regions have entered the era of "2 yuan". On April 13, the wholesale price of eggs in the new market was 2.24 yuan per kilogram, down more than 20% from the same period last year, the lowest price in the same period in nearly nine years. According to the Ministry of Agriculture's fixed-point monitoring of 500 markets in China, the average price of eggs in 10 major producing provinces, such as Hebei and Liaoning, fell 21.9% at the end of March compared with the same period last year. Since October 2016, the price of eggs in China has fallen for six consecutive months, with a cumulative decline of 32%.

"At present, there is a general loss in laying hen farming." In addition to selling eggs, Yang Yuan, an egg broker in Beijing Xindi Market, has contracted a chicken farm. He felt that the main reason for the continued decline in egg prices was the excessive stock of eggs. "In the past few years, the profit of raising chickens was high and the market was good. Many farmers followed suit and raised their stocks." Along with the egg price innovation low and falling below the cost price, the operating pressure of farmers is also increasing, and the loss is more serious. According to him, the cost per kilogram of eggs is about 2.7 yuan at present, while the ex-factory price of eggs is only 2.3 yuan per kilogram, which is significantly lower than the cost price.

At the same time, the decrease of feed prices such as corn also reduced the cost of raising chickens, thus forming the low price of eggs. To some extent, eggs are transformed products of feed protein. Usually, about 1 kg of eggs can be produced per 2.3 kg of feed. Although feed cost is not the determinant of egg price, it affects the production cost of eggs to a great extent, and the change of feed cost also affects the medium and long-term trend of egg price. Since last year, influenced by the reform of the national grain storage policy, the price of corn, as the main feed material, has fallen sharply, which promotes the production cost of eggs to continue to explore, and provides a certain space for the price of eggs to fall.

Similar to Yang Yuan's, the storehouse of Huiyuan Chicken Farm in Luquan District, Shijiazhuang, Hebei Province is also full of eggs. "The specifications of eggs are 45 kilograms per basket, and the price is hovering around 100 yuan, far below the cost of 110 yuan per basket. Because of the pressure of market competition, inventory is increasing now. Xie Zhenzhong, head of the chicken farm, said that in order to reduce losses, the chicken farm accelerated the elimination of laying hens, and the original more than 600 days to the elimination period of laying hens were eliminated in advance. In two months, the original stock of more than 60,000 laying hens was only 35,000.

Liu Tong, head of the Statistics Department of the new market, said that the sales situation of eggs in the new market showed that due to the recent depressed prices, the consumption of households was driven and the speed of egg sales was accelerated, which was good news for chicken farms. However, as the production of eggs is still sufficient, the price will not rise or fall too much in the later period, "So, the current choice of chicken farms is to keep a close eye on the elimination of laying hens'production capacity, neither overweening nor abandoning it halfway."

"Despite recent losses in laying hen farming, the H7N9 epidemic in some areas has slowed down the outbreak of eliminating chickens and the stock of laying hens is adequate. As the weather gets warmer in spring, the laying hen's productivity rises and the egg production is adequate. According to the analysis of market early warning expert group of Ministry of Agriculture, the current temperature is suitable for eggs storage, and the price of eggs is lower than the cost price, which leads to the phenomenon of low prices and sells at a low price. There is a certain backlog of eggs, and the situation of loose market supply will continue in the future. In the absence of stimulating factors of festival consumption demand, limited support of catering market, and flat consumption of migrant workers and college groups, the motive force of egg price rise is insufficient, and the price of eggs will oscillate at a low level in the short term.

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