The Chinese egg market is currently facing historic supply pressure, with a record high inventory of 1.368 billion egg-laying chickens nationwide, leading to severe oversupply in the market.
Under the impact of overcapacity, egg prices have continued to decline. In October, the wholesale price of eggs in China decreased by 26.56% compared to the same period last year. In the first week of November, egg prices on the mainland continued to decline by about 4%.
According to a report by Da Xiang News on November 11th, at the Xinfadi Agricultural Products Wholesale Market in Beijing, vendor Weng Xiaoxia stated that since October, egg prices in the market have shown a downward trend mainly due to a seasonal decline in egg consumption after the National Day holiday.
Another vendor in Xinfadi market, Li Zhenheng, mentioned that with the excessively large inventory, it is evident that supply far exceeds demand, making prices this year the lowest in recent years.
Vendors mentioned that due to the large inventory held by egg storage businesses, which are ready to release the eggs anytime, it has constrained current prices, leading to a continued decline in egg prices by about 4% in the first week of November. The situation of oversupply in the egg market has been sustained for the past two years.
According to monitoring by the Ministry of Agriculture and Rural Affairs of the Communist Party of China, the national wholesale price of eggs in October was 7.63 yuan per kilogram, a decrease of 5.22% compared to the previous period and 26.56% year-on-year.
An article by the financial V influencer “Liusu Wanqing” pointed out that the egg market is currently experiencing a rare situation of “comprehensive losses.” Prices in production areas have dropped to 2.87 yuan per half a kilogram, a staggering decrease of over 38% compared to last year. However, the current cost of breeding is about 3.43 yuan per half a kilogram, meaning that egg farmers are losing nearly 0.5 yuan for every half a kilogram sold. This price inversion trend is escalating, causing small and medium-sized farmers to expedite the elimination of old chickens, and even large-scale farms are proactively controlling production capacity.
For many farmers, a year-on-year wholesale price drop of over 26.56% means that their profit margins have been significantly squeezed. Some high-cost, low-efficiency farms will be forced to be eliminated or reduce their inventory.
Zhu Ning, deputy researcher at the Chinese Academy of Agricultural Sciences, stated that the national inventory of laying hens remains stable, making it difficult to reverse the high supply trend in the short term. With egg consumption currently in the off-season, the market supply will continue to remain loose.
The article by “Liusu Wanqing” further stated that data shows a 5.65% decrease in chick sales in July, indicating a significant reduction in the number of new laying hens after November. In October, the offload volume of old hens in major farming areas such as Hebei and Shandong increased by over 15% compared to the previous month. These data indicate a shift in the mindset of farmers, with the supply side contraction being initiated.
The article also mentioned that the core contradiction in the current egg market remains the game between high inventory and weak demand, but the trend of capacity peak and decline is inevitable, and the continuous industry losses are forcing supply contraction.