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Review & Outlook
The Egg Production and Market Trend
The total egg production of China in 2001 was about 9.6 million tons. The average egg production per capita in China was 17.9 kg, which is close to the average production level in the developed countries. According to the industry specialists, the total egg production in China in 2002 should be slightly more than the production in 2002.
The breeding chicken farms are either state-owned or operated by large companies. They are relatively operated at a larger scale with higher return on their investment. The parent layer farms are transferring to large specialized chicken-raising households in rural areas. Specialized layer-raising households raise the layers and produce eggs. The production scales at the household level have been continually increased. More and more those households have taken the egg production as the key business for the family rather than a sideline business in before. The specialization of egg production has been well developed in some regions. Most households in one village could be egg producers and many households in other village could work at transporting egg to the far-away markets and sell eggs.
The traditional egg production model that was to produce eggs for self-consumption or nearby market has totally changed due to the specialization and continually improving transportation system and communication. The specialization, using the high quality breeds, adopting the advanced feeding and management have been significantly improving the productivity of egg production.
Generally speaking, the egg has been over produced for last few years in China. That is why the market price of egg has been relatively low for a long time.
Most of those specialized layer-raising households have relatively smaller investment on fixed asset. If the market price of eggs can cover the variable cost, i.e., mainly fed cost, they will continually produced eggs. As the matter of fact, the corn price has been relatively low for a long time. There are few alternatives for those rural households to earn cash. Giving all those factors, the over production of eggs will be continued. The market price will be maintained at the low level for near future. The profitability of egg production will be low. It is very difficult for any formal established company to enter the egg production industry to compete with those specialized households in China.
The continually improving information system and extension services facilitated by the government organizations will help those specialized households in someway to improve the profitability in long run, in turn to enhance the productivity and profitability of the egg production industry.
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