Egg Weekly: The Lunar New Year is over! Egg prices have fallen below 3 again!
Domestic Egg Market Analysis
1.1 Egg Market Price Analysis
This week, the egg market experienced a sharp drop due to a significant decrease in demand after the holiday, before showing signs of stabilization towards the end of the week. As of Thursday, the average price of red eggs was 2.89 yuan/jin, and the average price of pink eggs was 3.01 yuan/jin, a price difference of 0.12 yuan/jin, a decrease of 0.995 yuan/jin compared to last Thursday. Affected by the post-Spring Festival off-season, insufficient operation of food factories and weakened demand from group catering led to a loose market supply and demand, putting downward pressure on egg prices. Although the number of laying hens has slightly decreased from its high level due to reduced restocking in the previous period, the overall supply remains sufficient. However, with the start of the school season approaching this weekend, the purchasing demand from canteens and group catering began to provide short-term support to the market, and traders also began restocking after the holiday, resulting in a slight improvement in market sales. As a result, the decline in egg prices slowed and gradually stabilized towards the end of the week.
Egg production area market: On Thursday, the average price of eggs in major producing areas was 2.91 yuan/jin, a decrease of 0.44 yuan/jin compared to last Thursday. Egg prices in major producing areas declined this week.
Egg sales area market: On Thursday, the average price of eggs in major sales areas was 2.97 yuan/jin, a decrease of 0.35 yuan/jin compared to last Thursday. Egg prices in major sales areas declined this week.
1.2 Egg Market Price Trend Chart
1.3 Comparison of domestic egg market prices this week
Analysis of Laying Hen Inventory and Slaughter
2.1 Inventory Analysis
This week, the overall egg inventory showed a slight decrease from its high level, but supply pressure remained significant. The market generally expects the inventory to continue to decline slightly in February, but the current inventory level is still at the second highest level in nearly ten years, potentially suppressing egg prices. From a market dynamic perspective, previously acceptable farming profits led to low culling activity among farmers. The number of culled hens in the week of February 12th decreased compared to the previous week, reflecting a slowdown in capacity reduction. At the same time, farmers are optimistic about the post-Lunar New Year market, resulting in high restocking activity and a hot chick market. This situation of "reduced culling and active restocking" weakened the expectation of a decline in inventory, leading to a limited actual decrease in egg supply despite a theoretical decrease in inventory, and the overall market supply remains ample.
2.2 Analysis of Slaughter Volume
This week, the egg market saw a trend of high at the beginning and low at the end of the week, with overall slaughter volume reaching a peak at the start of the week before rapidly declining. The number of culled chickens in the market had already begun to decrease significantly in the week before the Spring Festival. Due to relatively good profits for farmers before the holiday, the enthusiasm for culling was generally low. With the Spring Festival approaching, slaughterhouses gradually entered holiday mode, significantly reducing their purchasing plans, leading to a stagnation in actual market transactions. Entering late February, as the resumption of work by slaughterhouses after the holiday progressed slowly, the number of culled chickens remained at a relatively low level, and the overall slaughter pace was relatively slow. In summary, this week's slaughter volume showed a characteristic of contraction before the holiday and low levels afterward. The slowdown in the culling pace somewhat suppressed the capacity reduction process, and its regulatory effect on the market supply side was relatively limited.
Egg Demand Analysis
This week, the egg market experienced a typical "V"-shaped recovery, following a sharp post-holiday decline. Immediately after the Spring Festival holiday, the market was at its traditional off-season low, resulting in sluggish sales and a temporary vacuum in demand. However, towards the weekend, two key positive factors supported demand: firstly, universities across the country were about to reopen, leading to increased demand from canteens stocking up; secondly, the sharp drop in egg prices stimulated bargain hunting. As a result, sales improved in the latter part of the week, effectively easing inventory pressure at all stages. Demand shifted from extreme weakness to a moderate recovery, becoming the core driving force supporting the stabilization of egg prices.
Egg Market Forecast
From the supply side, a slight decrease in egg inventory and low culling levels indicate a gradual reduction in production capacity. This suggests that the overall egg supply will remain ample for the foreseeable future, limiting the potential for a price rebound.
From the demand side, with the resumption of classes and production after the Lantern Festival, restocking demand will provide short-term support to the market, and egg prices are expected to stabilize and see a slight recovery. However, the seasonal off-season for consumption has not fundamentally changed, and the terminal market's ability to absorb high-priced supplies is limited, with some inventory pressure still present.
In summary, the egg market is expected to see a slight adjustment next week, with different performance for red and pink eggs. The adjustment range is expected to be around 0.15 yuan/jin, with the average price in major producing areas at 2.85-3.00 yuan/jin.
