February 23, 2017

China Layer Monthly Review: Farming profits halved in January with egg prices plunging


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January layer numbers edged lower 0.14%, declining for the sixth consecutive month since peaking in July 2016.

Increasing 1.80%in January,pullet inventory building continued to rise for a second consecutive month, but at a modest rate as farmers stayed prudent.

More than 66 million layers were culled in January, 2.26% more than the previous month. The rise in culling is partly due to a high proportion of hens growing old simultaneously alongside January's bird flu outbreak, which reduced the fertility of infected layers.

Chinese consumers cut down on egg consumption amid fears caused by human bird flu deaths and the outbreak's widespread nature. Egg sales subsequently plummeted, dragging prices downtremendous.The market picked up after mid-January on pre-Chinese New Year demand, but it did not fully recover from the price deflation suffered earlier in the month. Overall, January's average egg price dived RMB0.53/kg or 8.44%, to RMB5.75/kg.

Layer rearing costs decreased during January by 2.38%, helping to mitigate the losses due to plummeting prices. Even so, profits of layer farms were still down by almost 50%, averaging RMB0.41/kg.


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