According to the monitoring of SunSirs, the average price of eggs (brown shells) at the beginning of 2023 was 9.15 RMB/kg, and at the end of 2023, the average price of eggs (brown shells) was 8.62 RMB/kg, a price drop of 5.79%.
The price of eggs for the whole year of 2023 is mainly fluctuating. According to the monthly rise and fall chart of 2023, the largest increase of the year was in July, with a growth rate of 16.67%. The largest decline of the year was in October, with a decline of 15.59%.
Phase 1: From January to May (volatile consolidation), the price of eggs in the market fluctuated between 9.08-9.66 RMB/kg. At the beginning of the year, the inventory of laying hens was relatively low compared to the same period. Coupled with the increasing demand for stocking in supermarkets before the Spring Festival, the price of eggs increased in January. As a result, the market was in a traditional off-season in February, with weak demand in various links, limited recovery in school catering, and weak prices. In March, due to the decline in feed prices and weakened cost support, egg prices entered a downward trend after a slight rebound. In April, egg prices slightly rebounded due to inventory replenishment at various stages, while in May, due to limited market supply capacity, egg prices continued to decline.
Second stage: From June to September (price increase), the rainy season gradually comes to an end, and many regions are experiencing a peak tourism season. Catering consumption is rapidly increasing, and downstream distributors are more enthusiastic about purchasing goods. In addition, corn and soybean meal have both increased, resulting in an increase in the cost of egg chicken farming compared to the previous month, and egg prices continue to rise.
Phase 3: From October to December (consolidation), after the National Day holiday, the weak demand for household consumption and catering continued. In October, prices were weak and fell. In November, domestic sales in consumer production areas improved month on month, and terminal sales accelerated. The willingness to purchase goods in various links increased, and prices rebounded. In December, due to weather conditions, road transportation was restricted and shipments were not smooth. Market terminal consumption continued to be sluggish, and prices fell.
In terms of supply: The theoretical total amount of laying hens in January 2024 is determined by the total sales of chicks from September 2022 to August 2023. Afterwards, the sales volume of chicken fry will increase by one month according to the January sales range. The total sales volume of chicken fry from January to October 2023 will increase by 8.19% year-on-year. Without considering sudden epidemics and normal replenishment and cleaning of chickens by breeding units, it is expected that the inventory of laying hens in the first half of 2024 will remain above 1.2 billion. Due to a slight increase in supplementation in the third and fourth quarters of 2023, but with limited growth, most breeding units will concentrate on eliminating age appropriate laying hens before the holiday. It is expected that the inventory in the second half of the year may decrease compared to the first half. It is expected that egg production will increase year-on-year in 2024, with an expected growth rate of about 6.21%.
In terms of demand: The demand for eggs in the market may be influenced by seasonal changes. After the Spring Festival, demand remained sluggish throughout the year. From March to April, market demand improved, and the operating rate of food factories returned to normal. Downstream market demand gradually recovered; The rainy season in June affects egg storage and quality, leading to a decrease in consumption expectations; From August to September, driven by the Mid Autumn Festival and the opening season of universities, demand is at its peak throughout the year. From October to November, the market lacked positive factors to support it, and demand remained stable at a low level. Demand began to improve in December, with holiday effects supporting the future, and overall demand is in a steady upward phase. Although there is expected growth in demand for eggs in 2024, the improvement is limited, and the contradiction of oversupply of eggs is gradually becoming prominent.
In summary, in the first and second quarters of 2024, there will be supply pressure brought about by the increase in new production, and spot prices will be under pressure, which may promote the elimination of old chickens. However, due to the relatively small number of available old chickens, the impact of the elimination increment on the laying chicken inventory base is limited. The laying chicken inventory will maintain an upward trend, and in the first half of 2024, there will be significant pressure on spot prices. The weak spot situation will lead to a decrease in replenishment and an increase in elimination in the first half of 2024, As a result, the supply pressure in the second half of 2024 has eased, and there is an expectation of improvement in spot prices in the second half of the year. In 2024, feed costs may still remain high, and it is difficult for breeding units to significantly increase their enthusiasm for restocking. The growth rate of egg laying chicken inventory is limited, and the supply of eggs may still remain tight. In addition, market demand will gradually recover, and both supply and demand will have positive support. It is expected that there is still room for improvement in egg prices in 2024.
If you have any questions, please feel free to contact SunSirs with support@sunsirs.com.