October 1, 2003
Intensive Farming the only Way ahead for the Development of China's Egg Industry
An eFeedLink Exclusive Report
At the second Meat Industry Conference organised by the Meat Association of China, the future development of the egg industry became the focus of the members of the industry. Industry executives pointed out that due to the imperfect quality assurance system established by the administering authority for the egg industry over the years, starting from production to becoming food on the table, the industry is dominated by large numbers of farmers operating on a small scale and in a disorganised fashion.
This created difficulties in controlling the spread of disease among the fowls, and the resultant problems such as epidemic and residual medicine have directly affected the quality of eggs produced by China, bringing huge losses to the industry. Therefore, if China were to strengthen and grow its egg industry, it would have to move in the direction of intensive farming.
Dearth of Leading Egg-Producing Companies
China has been the world's largest egg producer in the world since 1985. In 2002, it produced 24.62 million tons of eggs, constituting 45.8% of the world's total production. China has become the world's most important producer and consumer of eggs. However, one by one, major state-owned egg farms have been beset with troubles in the last few years. After the cyclical downturn of the egg market in 1992, 1995 and 1997, a number of major egg farms closed down. There are now only a handful of egg farms with over 200,000 chickens. The largest egg farm in Beijing only has 50,000 chickens. Currently, more than 70% of eggs produced in China are by individual farmers, less than 30% are produced by intensive farming. Few egg companies have been rated by the government as leading examples of the industrialization of the agriculture industry in China.
Industry executives felt that as the level of industrialisation of the egg industry in China is low and there is no linkage between the mechanised large-scale farms and individual farmers, the disorganised competition between the two has resulted in the advantages (advance in production techniques) of the former being offset by the inferior egg industry's system and organization. Meanwhile, although the large number of backyard farmers possesses the advantage of flexibility in management, they become relatively weak when losses are incurred.
The disorganised system in egg industry hinders the improvement of the area yield per unit and quality of products. The current output value of the egg industry in China is RMB120 billion. Other than those circulated within the villages (egg-producing villages), the amount transacted on the market is over RMB50 billion or 41% of the output value. Compared to developed countries, this proportion is relatively low, which shows that the commercialization and industrialization of China's egg industry still remains at a low level, and egg production is not carried out intensively.
If China were to strengthen its egg industry, the road to take is to promote intensive farming and raise the level of industrialization. Given the current situation in the country, it is impractical to attempt to change the small-scale egg production of backyard farmers in short term. However, attention should be draw to the development model of the poultry meat industry and go the model of "company + centralized farming + backyard farmers" with key companies taking the lead, forming an industrialization chain consisting of commerce, industry and farmers. This helps develop a model for intensive production of eggs with China characteristics, thereby raising the level of commercialization of the eggs.
Safety and Nutritional Value of Eggs to be Improved
The report indicated that the number of egg-producing chickens in developed countries has not increased over the past few decades. However, the volume of eggs produced has risen significantly by relying on scientific methods. Currently, a chicken in China produces 15 kg of eggs a year; the ratio is 2.7kg feed:1kg egg; rate of death and elimination is 20%. Meanwhile, a chicken in a developed country produces 19kg of eggs a year; the ratio is 2.25kg feed:1kg egg; rate of death and elimination is only 6%.
Experts pointed out that China has to stabilize its number of egg-producing chickens raised, and focus on utilising scientific methods to rear the chickens in order to increase the amount of eggs produced by a chicken per year. China should avoid increasing the number of chickens raised blindly, which results in a drop in overall profitability and wastage of resources.
Experts analyzed that as China's egg industry is dominated by a large number of backyard farmers operating on a small scale, this has created major difficulties in the control of fowl disease. The resultant problems of epidemic and residual medicine have been the main factors that affect the quality of eggs produced by China and prevent the country from increasing its egg exports. Over the years, insufficient attention has been paid to the establishment of a quality assurance system for the egg industry, starting from production to becoming food on the table. After its entry into the World Trade Organisation, China has to actively implement relevant measures to meet the safety and nutritional requirements of the international and domestic markets with respect to the eggs it produces and sells.
China has to quickly develop a production management model, and actualise the seamless mode of operation in terms of categorisation, cleaning, sterilisation, membrane removal, packaging, reefer transportation of fresh eggs. This would help raise exports and promote consumption in the country.
Inappropriate Proportion between Exports and Output
China is the largest egg-producing country in the world. Its low production cost has been a key advantage to its livestock industry to enlarge its share of international market. However, the fact remains that the volume of exports is not in proportion to that of production. During the 1970's, China was a major exporter of egg products, which included fresh eggs, processed eggs and egg-based products. Export of fresh eggs hit above 100,000 tons at its peak. Export volume maintained at around 80,000 tons in the 1980's. However, in the 1990's, although the production of fresh eggs was increasing rapidly every year, export volume still dipped. In 2001, the export of fresh eggs was only 58,000 tons. Using Hong Kong as an example, in the past, its egg supply was entirely from China; now, only 70% of its eggs are supplied by China. If measures are not taken to address this situation, China's market share in Hong Kong could drop further.
The USA, although ranked second in the world in terms of fresh eggs production, which is only a quarter of China's, its export volume is much larger, constituting 6.1% of the world's total egg exports. As for the Netherlands and Malaysia, although the volume of fresh eggs produced are not among the top nine largest in the world, their export volumes constitute 32.7% and 7.8% respectively of the world's total egg exports.
The reason behind this situation is that these countries possess advanced intensive farming and sales system. This system, which is built on the premise of safety and quality, has increased the scale of production, standardised and diversified the products, unified the packaging and modernisd the logistics and transportation. The processing of egg-based products in China has not reached this level.
Disorganised competition between companies and individual backyard farmers has caused overall standards in the industry to fall, and suffer severe setbacks in the international market. At the present time, only Han Wei Corporation in Dalian area, has obtained the registered export licence, and is the only company in China to become a member of the International Egg Products Association.
Lack of Varieties & Insufficient of Egg Branding
Over the years, overall level of the production techniques of China's egg products has been relatively low. Among the eggs taken by the general populace are salted eggs, preserved eggs, tea eggs, etc. The techniques of processing eggs are not high, and the product structure is outdated. During the 1950's and 1960's, the volume of processing of egg-based products including those which are edible and inedible in China reached 60,000 tons. These processed products comprise ice egg, ice yolk, ice egg white, egg powder, egg white powder, egg white tablet, etc. The quality of these products was not high, and efficiency was relatively low, especially in the aspect of developing new products, which was practically nil.
In 2002, amount of eggs and egg products used commercially reached 10.18 million tons, most of which are primary products like fresh eggs. Processed egg-based products were 80,000 tons, which is only 0.8% of eggs used commercially. In developed countries, the amount of processed egg-based products is 15% to 25% of total fresh eggs produced. The varieties include liquefied egg, separated egg white and yolk, egg powder and other products produced by bio-chemical means.
To improve the current level of utilising low techniques in the processing of egg-based products in China, an official with the Meat Association of China said that companies manufacturing egg-based products in China have to pay attention to the market and techniques. They should carry out research, develop new products, explore new techniques, and expand new markets. According to an analysis of the world market trend, the growth of egg powder will exceed that of liquefied eggs in the future trading of egg products. This is because it could be preserved and transported at normal temperature, and its quality guaranteed period is longer. Moreover, it is smaller in size, and therefore, it's easy to package. Most importantly, the transport costs are lower.
