1. Egg prices have continued to rise since late June, increasing nearly 30% in the past two weeks. 2. The rise in egg prices has pushed up profits for egg-laying chicken farming, with a 120.51% increase compared to the previous period. 3. There are signs of accelerated replenishment of chicks downstream, with frontline staff of some chick breeding companies reporting that "customers are currently showing a strong willingness to purchase chicks, and orders are being placed quickly, with chick prices continuing to rise."
On July 12th, Cailian News Agency reported that egg prices have continued to soar since late June, rising nearly 30% in the past two weeks. Cailian News Agency reporters learned from multiple sources that the market is in the early stages of peak season and, influenced by subsequent holidays, egg prices may continue to fluctuate upwards. In addition, the continued rise in egg prices coupled with a decrease in breeding costs has pushed up profits for egg-laying chicken farming, and there are signs of accelerated chick replenishment. An employee at Xiaoming Shares (300967.SZ) told reporters that "currently, customers are showing a strong willingness to purchase chicks, and orders are being placed quickly, with chick prices continuing to rise."
Recently, egg prices have entered a rising mode. "If you purchase over fifty items wholesale, it costs almost 5.1 yuan/jin. In the past half month, the price has risen by nearly 0.8 yuan/jin, and the purchase situation has improved compared to before," said a person in charge of a chicken farm to Cailian News Agency.
According to Mysteel's agricultural data monitoring, the price of eggs was 3.48 yuan/jin on June 19th, and it has risen steadily since then, reaching 4.52 yuan/jin on July 11th, an increase of 29.89%.
(Egg price trend chart Source: Shanghai Steel Union)
Why have egg prices suddenly entered a rising mode? Wang Nana, an egg analyst in the Agricultural Products Division of Shanghai Ganglian E-Commerce Holdings, told Cailian News Agency that "from the supply side, the temperature is rising and the egg-laying rate is beginning to decline. The price of eliminated chickens continues to rise, and the elimination of local production areas is actively increasing. There has been a decrease in the supply of large eggs in the market, and the position of egg prices has been low for the previous period. Cold storage, food companies, and trade links have all had the phenomenon of bottom fishing in storage, leading to a decrease in available circulation in the market. From the demand side, alternative products such as vegetables and pork have both risen in price in the previous period, stimulating egg consumption. After school holidays, the demand for tourism and catering industries increased. At the same time, some southern regions have gradually entered the plum season, and the price increase has been significant. The bullish mentality has stimulated the enthusiasm of terminal replenishment, and the circulation of goods has been markedly accelerated, with multiple factors supporting the rise in prices."
It is noteworthy that with egg prices continuing to rise and breeding costs decreasing this year, current egg-laying chicken farming has turned from a loss to a profit. The aforementioned person in charge of the chicken farm told Cailian News Agency reporters that "recent profits have been decent, and previously we only broke even or lost a little. Feed prices have been declining since last year, and the reduction in breeding costs is also a factor."
According to Mysteel's agricultural product data statistics, as of July 10th, the breeding cost for egg-laying chicken farming was 3.62 yuan/jin, a decrease of 1.09% month-on-month and 13.81% year-on-year. Breeding profits were 0.86 yuan/jin, an increase of 120.51% month-on-month and 577.78% year-on-year.
The rise in breeding profits has led to a certain acceleration in chick replenishment, with an employee of Xiaoming Shares telling Cailian News Agency that "the impact of rising egg prices generally has a certain lag, but it is already beginning to appear now, and it may become more pronounced later. Currently, customers are showing a strong willingness to purchase chicks, and orders are being placed quickly, with chick prices continuing to rise."
However, as a leading domestic egg-laying chicken farming enterprise, Xiaoming Shares recently released its June sales report, which showed a slight decrease in sales volume and average selling price. Cailian News Agency reporters called the company's securities department as investors, and staff said that "our sales are usually pre-sales, or order-based. In June, we may have received orders for July or August. The sales report for June may reflect orders from April or May. With chick prices rising now, it will take another month or two for the sales report to reflect this, and there is generally a lag."
Looking ahead, can egg prices continue to remain strong? Wang Nana said, "currently, the market is in the early stages of peak season, and later there is support from the start of the school season, Mid-Autumn Festival, and National Day. The market has full confidence in the future, and the risk of a sharp decline in the short term is low. The price trend is still strong, or it will show a trend of fluctuating upward."