2017 Egg Price Trend Forecast and Market Analysis

It is understood that after egg prices entered a downturn in June this year, compared with previous years, the boost from Mid-Autumn Festival stockpiling also came a bit later and was somewhat weaker, and laying hen farming has recently mostly fallen into losses.

From a time perspective, June is in fact the low point for spot egg prices every year. In June, temperatures are relatively high, the storage period for eggs is short, and it is also the off-season for consumption. But the low egg prices in June this year were especially “damaging” to the farming industry. Compared with the previous two years, when farming profits were relatively good, the profits of laying hen farming enterprises have remained relatively thin this year, and farmers have a weaker ability to withstand risk.

In addition, since the second quarter of this year, laying hen farming costs, especially feed costs, have gradually risen.

In June, the prices of the main feed ingredients, soybean meal and corn, were both at high levels, while egg prices fell to the bottom, and farming profits were caught in a “pincer movement” from both sides. It is understood that from January to July this year, laying hen farming lost an average of 2.9 yuan per bird, with the largest loss occurring in June.

On the demand side, in the short term, purchasing willingness has weakened somewhat. At present, most food factories purchase according to need and still have no willingness to hold inventory.

Last week, the national egg-to-feed price ratio was 2.62, a week-on-week increase of 7.82%. Based on current prices and costs, it is estimated that laying hen farming will lose 0.49 yuan per bird in the future. Li Xia believes that after this week, school canteens will stock up in advance, egg demand may increase slightly, and prices are expected to rise slightly while remaining stable.

In the long term, looking at the situation of replenishing flocks, commercial chick stocks had no off-season in 2016 and already showed substantial year-on-year growth. If there is no large-scale epidemic in the future, the number of laying hens coming into production will be quite considerable, and the supply of small eggs in 2017 will not be very tight.

Egg prices are very likely to fall significantly after National Day and enter a period of fluctuation from November to December, and they will also trend lower overall in the first half of 2017.

At present, a large number of small domestic farmers still have relatively weak risk resistance, lack a deep understanding of the market, and tend to follow trends rather seriously, while also lacking experience in farming technology and risk management. The future trend of egg prices is worrying, and farmers' profits will be difficult to guarantee.

Most industries often operate in a model where scale drives liquidity, and liquidity in turn promotes scale, and the farming industry is no exception.