Strategic Changes Needed in the Egg Industry: High and Volatile Egg Prices Impact Markets and Business Models
Eggs and chicken are the world’s fastest-growing proteins, as the industry has been highly successful over the past 15 years in offering affordable and healthy products to consumers worldwide. But significant price volatility is challenging this. Supply in many markets has been dropping, while prices have risen to historical highs. Consequently, the industry’s growth is currently lower or negative in many markets.
High Prices Shaking Up Global Egg Supply Chains
There are also significant value chain impacts. While consumers face high prices and availability issues, suppliers struggle with disease, cost inflation, new regulations, government intervention, changing consumer demand, and limited customer commitment. This has resulted in supply chain disruptions, with considerable price and supply volatility and, in some cases, empty supermarket shelves.
We expect prices to stay relatively high throughout 2023 but lower on average than the levels seen in Q1 2023. Prices will be especially high in markets heavily impacted by avian flu, high costs, and regulatory changes. In other markets, prices will drop but not to pre-2021 levels, as lingering high input costs will keep prices elevated.
In the longer term, a refocused and measured approach to better balance market supply and demand, pricing, and risks in the value chain is important. Such an approach should include the key tools of more demand-driven value chain cooperation, including more customer commitment, strategies to reduce the impact of avian influenza and government interventions, and better access to finance for the sector. The egg industry, governments, and other stakeholders will need to join efforts to optimize value chains and link these efforts to industry business models.
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Nan-Dirk MulderSenior Analyst - Animal Protein Read more