November 24, 2020
COVID-19 couldn't 'crack' eggs and they're going upmarket too!
The world's cheapest protein line endured 2020's COVID-19 depression relatively unscathed. New food consumption trends and value-added niche marketing herald a bright future.
By Eric J. Brooks 
An eFeedLink Hot Topic
Although eggs experienced sudden, traumatic changes in their marketing and distribution chains, their prices and production have resisted COVID-19's deflationary recession better than any other protein. Always the most locally grown protein, there was considerable variation across nations in how eggs adapted to COVID-19's economic shock.
In some nations, production fell but will show a net 2020 net output gain, while others have flat or falling production, making for a near flat 2020 eFeedLink estimated world egg output (including non-layer birds) of 85.64 million tonnes. We estimate that to be a nominal 0.3% more than 2019's 85.44 million tonnes, itself up 3.0% on 2018's FAO estimated 82.93 million tonnes.
Prices fell during the lockdown in some nations and increased in others but returned to near-normal levels thereafter. Flexibly adjusting their distribution to avoid price deflation, 2020 physical output was flat with world revenues down by a nominal amount: While this year's physical world output is flat, a study by projects that the value of 2020 world egg production will fall by 1.3%, from US$200.8 billion in 2019 to US$198.4 billion this year –but thereafter, eggs will grow at above-trend rates well into the mid-2020s.
That's because eggs are using COVID-19 to leverage several longstanding marketing advantages: First, being mostly locally produced, their transport was less disrupted than more internationally traded meat lines.

Second, as the least expensive protein, eggs occupy a unique market niche relative to other agribusiness lines: In nations with high per capita GDP, egg demand is inelastic when incomes rise but can increase rapidly when purchasing power suddenly falls by a steep amount. The substitution of inexpensive eggs in place of other proteins is even stronger in lower-income nations, where growth is strongest and egg demand is relatively more elastic.
Third, new medical research shows that eggs do not raise cholesterol levels or cause heart disease as much as was once feared. Alongside cage-free layers, suppliers now offer eggs that with lower cholesterol levels, heart-healthy omega-3 fats or enriched with vitamins and minerals. Consequently,  consumers can enjoy eggs and not fear for their health for the first time in almost 50 years.
Fourth, hundreds of millions of newly unemployed are substituting eggs in place of more expensive meats. They are joined many millions more who have started cooking egg breakfasts regularly while working from home. With these changes, consumers from all social classes and income levels are starting to eat eggs and incorporate them into their daily routines.
As a result of all these factors, this year's flat egg production was caused by higher egg consumption in China, East Asia, the Indian subcontinent, and America counterbalanced by sharply lower European production, where COVID-19 lockdowns had the greatest economic impact. Going forward, a world economic recovery will dovetail with upmarket egg consumption growth, making for a very bright five-year forecast.
Assuming no further serious lockdowns occur, 2020's flat production will be followed by a strong recovery in the years 2021-2025. World egg production increased at a 2.3% annual rate from 2009 through 2019 and is holding steady in 2020. Thereafter, we expect output to rise 4.5% in 2021, followed by 3.5% in 2022, 3.0% in 2023 and 2.5% increases thereafter, with layer and non-layer production exceeding 100 million tonnes by 2025. Despite eggs' reputation as a slow-growing protein line, our estimates are more conservative than many.
For example, expects world egg revenues to rise 7.2% annually from 2020 onwards, totaling US$244.6 billion by 2023. Driven by higher market prices and rising demand for eggs from hens that have been either raised cage-free or with omega-3, vitamin or mineral supplemented feed, half the revenue increase will be from more expensive eggs. That implies world egg output volumes could rise by 3.5% to 4.0% annually going into the mid-2020s.
In conclusion, all these demographic and marketing changes have the potential to transform eggs from a downmarket substitute food into a higher-end, value-added protein line.

All rights reserved. No part of the report may be reproduced without permission from eFeedLink.