Thursday, September 21, 2023

Rabobank: Egg prices expected to remain high throughout 2023

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UTRECHT, The Netherlands — Global egg prices have reached historic high levels, creating a big impact on the egg supply worldwide. Prices are expected to stay relatively high throughout 2023, especially in markets heavily impacted by avian flu, high costs, and regulatory changes.

egg prices

Egg prices have reached record-high price levels in many markets.

“Rabobank’s global egg price monitor reached a new record in Q1 2023, with the index now peaking above 250, which means prices are 2.5 times higher than the reference year of 2007, and have increased more than 100 percent since this time last year,” said Nan-Dirk Mulder, senior analyst, Animal Protein, at Rabobank.

  • Rising feed costs and avian influenza outbreaks impacting inflation.

The high global egg prices reflect a combination of several supply and demand factors. What makes the current situation unique is that it is a global phenomenon. Many markets — like Europe, Brazil, Mexico, the U.S., Japan, the Philippines, and New Zealand — are seeing historic highs at the same time.

  • High feed costs have a big influence on prices.

“Feed represents 60 percent to 70 percent of a layer farmer’s costs, so any change or uncertainty surrounding feed costs affects egg prices and supply,” Mulder said.

  • Global feed prices doubled between mid-2020 and mid-2022.

Among other influential factors are avian influenza outbreaks, affecting layer numbers, and the global market disruptions due to COVID-19, which impacted operations.

Regulations introducing production restrictions, changing consumer behavior due to reduced spending power, and tight supply caused by uncertainty also add to the mix, according to Mulder.

  • Egg prices to stay high this year

In general, egg prices are expected to stay relatively high throughout 2023, with some differences between countries.

Prices will remain high in countries with persistent avian influenza pressure, restrictions on grandparent stock or breeding stock imports, financing challenges such as a large number of farms with limited access to finance or the US dollar, and countries undergoing regulatory changes, like Germany.

Prices are expected to go down in countries and regions with extreme price peaks like the U.S., Europe, and Japan, but likely not to the sorts of lows we have seen following other crises.

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