China's egg price likely to decline after the festive-driven stocking

Current egg prices may have peaked as high prices have started to constrain the transactions. In particular, the end-market market sales have slowed significantly, the spot availability has increased, and egg prices in production areas have begun to fall from their highs.

In addition, it is now approaching the end of August, and the concentrated stocking for food factories and school openings is entering its final phase. The magnitude of this Mid-Autumn Festival egg price increase has been within normal levels. As end-market stocking enters its final stage, egg prices in producing areas have been falling from highs, with limited room for further increases later. Egg prices are likely to maintain high-level consolidation before gradually declining.

According to Mysteel's survey, as of July 2026, the national laying hen inventory was approximately 1.282 billion birds. This represents an increase of 9 million birds from June, a slight month-on-month increase of 0.71%, but a year-on-year decrease of 0.77%. In August, the laying hen inventory is expected to continue increasing slightly, but the increase will be very limited.

The main reason for the slow growth is that the number of newly laying hens in August (corresponding to April's chick placements) increased only modestly, while the culling of old hens increased significantly, with the two factors offsetting each other.

Slaughterhouses are lowering purchase prices, and the price of culled laying hens has fallen rapidly. In Shandong and Hebei, the purchase price for pink-shell culled hens is Yuan 5.0-5.1/kg. The volume of culled hens has increased markedly, and slaughterhouse operating rates have risen.

Looking ahead, the large-scale culling of old hens will directly reduce the number of egg-laying hens, easing supply pressure on eggs. If culling continues, egg prices may find support in the future. The increase in slaughterhouses' operating rates indicates sufficient short-term supply, but it also suggests that capacity clearing is underway. However, some analysts point out that if egg prices remain high and volatile, farmers' willingness to delay culling may persist, and the pace of culling could slow down. Therefore, attention should be paid to the pace and volume of subsequent culling.

From the supply side, the newly laying hens in September will mostly be chicks hatched around May. The chick hatchings from April have basically entered the concentrated laying phase.

According to Mysteel's chick data, hatchings from April to May were at high levels, and new laying hens are expected to increase significantly, greatly improving supply and marking a turning point in the supply-demand balance.

Based on a comprehensive assessment of the current egg market supply and demand, egg prices are falling from highs, inventories across various links are increasing accordingly, and market sentiment is turning weaker. On the other hand, culled hen prices are falling and culling volumes are increasing significantly. In the short term, the market's main focus is on the duration of the continued increase in culling and the magnitude of the post-Mid-Autumn Festival egg price decline.