Recently I attended the National Egg Industry conference in Shanxi Province, west of Beijing, and I was struck again by the low prices for eggs. Prices have dropped by 12% year-on-year. Bigger players are using their scale to cut costs and the smaller players are being driven from the industry.
With expansion underway, China is reaching well over the normal market demand requirement of 1.2bn eggs a day. The market downturn is expected to last for another six months.
The government in Beijing is sharpening their focus on egg safety, particularly in relation to the use of antibiotics. Earlier this year, there was an egg food safety scandal on Hema, the Alibaba supermarket platform. Thirty eggs were being sold for €2.30, a deal that seems too good to be true, and indeed turned out to be too good to be true.
These eggs were found to have contained antibiotics and led to actions at the highest levels of government.
I was glad to have been involved in a review of the egg raising standards and identifying areas where improvements could be made, through the Chinese egg association.
China’s layers are largely housed in caged systems, and newer builds can provide more light, aeration and access to feed than those traditional cages, which are being slowly removed from the industry.
Discussions with Chinese egg producers reveal the downward pressure – egg weight, conformity and egg yolk colour are constantly used as key buying parameters or reasons for rejections in times of oversupply.
Some egg experts who have visited Europe noted that eggs being different colours, shapes and sizes is almost celebrated for being a more natural production, compared to the intensive factory farming systems in China where conformity is demanded.
In order to improve margins and visibility, many producers are focused on developing their own egg brands and use live streaming and direct sales in order to be able to reach consumers directly. There are a number of premium proposals.
One is to market eggs that they are safe to be eaten raw (which is popular in Japan), DHA and selenium enrichment and organic is also popular. Retailers, however, struggle to accept the premiums charged for these eggs and more.
In terms of replacing antibiotics, there are many opportunities arising due to the stricter controls coming into place in the industry. I am working on projects related to phytogenics and phages which are showing promising results.
The other area of interest is the level of artificial intelligence being used to drive further efficiency in egg production. A company called Little Giant, who used to be infamous for being a copy-cat in making equipment, has now developed robots that can observe the birds, identify issues and also robotic arms to remove dead birds.
While the western world has grappled with the inflationary costs of eggs, China’s deflationary market is leading to cheaper eggs, where industrial production, uniformity and mass scale are en vogue.
Cage-free production, increasingly common in Europe, is a niche segment. China sometimes really feels like a dystopian place.
Ian Lahiffe.
Recently I attended the National Egg Industry conference in Shanxi Province, west of Beijing, and I was struck again by the low prices for eggs. Prices have dropped by 12% year-on-year. Bigger players are using their scale to cut costs and the smaller players are being driven from the industry.
With expansion underway, China is reaching well over the normal market demand requirement of 1.2bn eggs a day. The market downturn is expected to last for another six months.
The government in Beijing is sharpening their focus on egg safety, particularly in relation to the use of antibiotics. Earlier this year, there was an egg food safety scandal on Hema, the Alibaba supermarket platform. Thirty eggs were being sold for €2.30, a deal that seems too good to be true, and indeed turned out to be too good to be true.
These eggs were found to have contained antibiotics and led to actions at the highest levels of government.
I was glad to have been involved in a review of the egg raising standards and identifying areas where improvements could be made, through the Chinese egg association.
China’s layers are largely housed in caged systems, and newer builds can provide more light, aeration and access to feed than those traditional cages, which are being slowly removed from the industry.
Discussions with Chinese egg producers reveal the downward pressure – egg weight, conformity and egg yolk colour are constantly used as key buying parameters or reasons for rejections in times of oversupply.
Some egg experts who have visited Europe noted that eggs being different colours, shapes and sizes is almost celebrated for being a more natural production, compared to the intensive factory farming systems in China where conformity is demanded.
In order to improve margins and visibility, many producers are focused on developing their own egg brands and use live streaming and direct sales in order to be able to reach consumers directly. There are a number of premium proposals.
One is to market eggs that they are safe to be eaten raw (which is popular in Japan), DHA and selenium enrichment and organic is also popular. Retailers, however, struggle to accept the premiums charged for these eggs and more.
In terms of replacing antibiotics, there are many opportunities arising due to the stricter controls coming into place in the industry. I am working on projects related to phytogenics and phages which are showing promising results.
The other area of interest is the level of artificial intelligence being used to drive further efficiency in egg production. A company called Little Giant, who used to be infamous for being a copy-cat in making equipment, has now developed robots that can observe the birds, identify issues and also robotic arms to remove dead birds.
While the western world has grappled with the inflationary costs of eggs, China’s deflationary market is leading to cheaper eggs, where industrial production, uniformity and mass scale are en vogue.
Cage-free production, increasingly common in Europe, is a niche segment. China sometimes really feels like a dystopian place.
Ian Lahiffe.
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