China Experiencing Slump in Egg Prices

01/20/2020

According to Dow Jones, egg futures on the Dalian Commodity Exchange have fallen by half to 31 cents per dozen.  Egg futures in China are highly volatile, moving by as much as 80 percent in a year.

Analysts attribute the drop in price to a level below the cost of production to a marked increase in availability. It is claimed that farmers have replaced hogs with laying hens.  This explanation appears unlikely given the inability of hatcheries to supply a sharp increase in commercial day-old pullet chicks, a lack of equipment to produce eggs and the biological cycle required to materially raise production. These factors would mitigate against Chinese farmers switching from raising hogs to producing a significant number of eggs sufficient to tank the market. A more likely explanation is that breakers responsible for a high proportion of production ceased operation in the week preceding the Lunar New Year beginning January 25th displacing eggs to the shell market.

Industry observers note that egg prices follow pork.  Although hog prices increased by as much as 150 percent during the last quarter of 2019, the last few weeks of December saw a decline, possibly attributed to imports and release of available frozen pork inventory. 

China is the world’s largest producer of shell eggs estimated to attain 47 billion dozen in 2018 valued at $230 billion or an average price approaching $0.50 on a nest-run basis.

Wide range in production systems to produce eggs in China


































































































































































































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