Egg Prices Rise with AI Spread... Increase in Production Limits Upward Trend

AI Spread Leads to 26.5% Increase in Special Egg Tray (30 pcs) Retail Price Compared to Average
Stable Supply and Demand Due to Increased Production and Reduced Culling Scope
Egg Prices Show Strong Stability but Expected to Decline Early Next Year

[Asia Economy Reporter Eunmo Koo] As highly pathogenic avian influenza (AI) rapidly spreads, an upward trend in egg prices is being observed. However, since egg production is also increasing, there appears to be no significant supply and demand issues, so the price increase is expected to be limited.

According to the Central Countermeasures Headquarters for Highly Pathogenic AI on the 18th, a total of 15 cases of highly pathogenic AI were reported at poultry farms over about a month from the 17th of last month to the 16th of this month. The headquarters stated that compared to last year (October 26), highly pathogenic AI has been confirmed earlier and over a wider area, and the risk of additional outbreaks at poultry farms remains high.

As highly pathogenic AI shows a rapid spread, egg prices are also fluctuating. According to the Livestock Products Quality Evaluation Service, as of the 16th, the farm-gate price of special eggs (30 pieces) rose by 69 won from the previous day to 5,015 won. This price is 39.2% higher compared to the average price (3,604 won) for the second week of November. With the rise in wholesale prices, retail prices also jumped significantly. During the same period, the consumer price for a carton of special eggs was 6,632 won, a 26.5% increase from the average (5,244 won).

There are concerns that the earlier occurrence and rapid spread of AI compared to previous years could lead to a surge in egg prices, causing a chain reaction of price increases in related products and overall inflationary pressure. If the spread of AI results in mass culling of laying hens and a shortage in egg supply, not only eggs consumed at home but also various processed products containing eggs, such as bread and snacks, could face upward price pressure.

However, contrary to these concerns, the possibility of a sharp spike in egg prices is considered low. The Agricultural Outlook Center of the Korea Rural Economic Institute (KREI) evaluated that considering the total number of laying hens, the scale of culling due to AI so far is minimal, and the current price increase is attributed to speculative demand by distributors driven by AI spread and related anxiety. Although prices have been rising due to consecutive AI outbreaks since October, production is also increasing, and the impact of the disease on egg supply is more limited than in the past, so the current price rise is seen as temporary.

Kim Taehwan, the laying hen observation officer at KREI, explained, “The scope of culling has been reduced compared to before, and with the operation of a disease management grading system that assigns grades based on quarantine facilities, equipment, and management levels, and grants preventive culling exemption options to farms above a certain grade, the impact of highly pathogenic AI on egg supply and prices will be limited.”

As of September, the total number of laying hens was 75.86 million, an increase of 7.3% and 6.9% compared to last year and the average year, respectively, marking an all-time high. Accordingly, the average daily egg production in September was 45.78 million eggs, the highest since the oversupply in 2020, and the estimated average daily egg production in December is 45.3 million eggs, 2.3% higher than last year.

With egg production reaching record levels, egg prices are expected to remain firm for a while before turning downward. Kim said, “Egg prices are expected to maintain current levels until the Lunar New Year holiday next year, and then prices will fall as chicks hatched in August and September of this year begin production. However, the decline in prices may be limited due to rising production costs such as feed expenses.”

This content was produced with the assistance of AI translation services.