Egg Price Market Analysis: Why Did Egg Prices Rise First and Then Fall Within a Week?

These past few days, because most areas in the north were overly worried about the impact of rain and snow weather, it became difficult to transport egg supplies out of the production areas. The Beijing market led the rise in egg prices, with parts of Shandong and Liaoning following suit. But after these past few days of market absorption and improved weather, the egg market seems about to enter a downward channel again……

One rise and one fall, what kind of story is this egg market telling? Will egg prices continue to remain firm in the future, or will they cool off and pull back?

These past few days, a cold wave bringing lower temperatures and snow has swept in. At the Sanba Road convenience market in Decheng District, Dezhou City, Shandong, an egg vendor told reporters that egg prices have now risen by about 0.5 yuan compared with a while ago, reaching 3.5 yuan per jin.

Egg vendor: It's three yuan four (per jin) now. Basically, prices are rising now, egg prices are going up.

The weather has been rough these past couple of days. These past couple of days, once it got cold, the chickens laid fewer eggs, so prices will have to rise.

Data shows that starting November 20, egg prices nationwide rose steadily with some increases. The areas with price increases were mainly concentrated in Beijing, Shandong, parts of Liaoning and other places. Zhuochuang Information market analyst Zhang Luyan said this round of egg price increases was caused by severe weather such as lower temperatures and snow.

Zhang Luyan: Because there was relatively large-scale lower temperatures and snow on the 20th and 21st, downstream players at all stages worried that this weather would cause difficulties for egg transportation, so many stocked up on supply sources in advance. Market circulation saw a temporary improvement, egg supply became slightly tight, and egg prices in most production areas rose by 0.05 yuan/jin.

However, according to reporters' understanding, as the weather improved and supply sources in production areas could be transported out smoothly, egg prices once again entered a downward channel. Looking at the past month, egg prices in production areas nationwide have generally shown a downward trend. According to data from the Yimutian platform, on November 19, the national average egg price was 3.42 yuan/jin, down 0.18 yuan per jin compared with the same period last month, and down 0.71 yuan per jin compared with the highest point of egg prices this year in early September. This shows that the most important factor affecting the overall trend of the egg market is still supply and demand. Yimutian market analyst Du Juan said that factors such as weather and feed have a small scope of impact and will not last too long.

Du Juan: Since the beginning of winter, large-scale snow in northern areas has affected egg transportation, but egg prices in production areas have not been greatly affected by weather, so prices have been affected by supply and demand and have declined steadily. Egg prices in sales areas, however, have been affected by weather, so under the influence of nationwide rain and snow weather in mid-November, prices showed a brief rise and then continued to fall back. However, judging from the overall national egg supply situation, laying hen inventories in Northeast China, the Inner Mongolia region, North China and Central China production areas are sufficient. In the coming period, egg prices overall will show a trend of steady with slight declines. Egg prices in sales areas may jump during periods of extreme weather, but they will also gradually fall back after the weather recovers.

Compared with the stability of grain prices and the sharp rises and falls of small-volume vegetables such as scallions, ginger and garlic, egg prices have actually remained generally stable in recent years. Combining the patterns of egg prices in recent years, reporters found that egg prices show two small peaks each year. The first is from the end of the previous year to after the Spring Festival of the following year; the second is around the Mid-Autumn Festival. These two price increases are mainly affected by holiday factors. Therefore, Yimutian analyst Du Juan predicts that egg prices will still show an upward trend.

Du Juan: At the end of this year, if there is no severe impact from an epidemic, it is expected that egg prices will still show a small peak at the end of the year, but the increase may be lower than the same period in previous years.

Judging from the current national egg supply capacity, supply is relatively sufficient, and for farmers, competitive pressure is also relatively high. Judging from current prices, farmers' profit levels remain at low profitability, so Du Juan advises farmers not to hold back sales.

Du Juan: If farmers have culled laying hens in their flocks, it is recommended to sell them at the appropriate time. When the weather is cold, pay attention to keeping laying hens warm and protecting them from the cold. Remember not to store eggs and gamble on price increases, which would delay the best period for selling eggs.

Zhuochuang Information also reminds everyone that in the first half of 2016, replenished chicks had all started laying and entered the peak laying period. Back-up supply sources are steadily increasing. The number of older hens of suitable age waiting to be culled in the market is not large, supply of old hen eggs is relatively low, and supply of peak-period eggs is sufficient. Farmers are advised to sell along with the market trend and absolutely avoid storing goods to gamble on price increases.