Egg prices constrained by potentially rising laying hen inventories in Nov

The October egg price correction represents a pullback from elevated levels rather than a trend reversal. Nonetheless, the most-traded DCE egg contract JD2612 staged a clear rebound on November 2, 2026, surging rapidly during the session and closing higher.

But in the short term, newly productive laying hens are expected to rise slightly in November while old hen culling also slows in tandem, leaving the supply side broadly stable. With demand remaining in its off-season, the egg prices are expected to see mostly narrow-range adjustments, lacking a sustained upward driver.

According to Mysteel's data, China's laying hen inventories stood at approximately 1.245 billion birds at end-October 2026, down 0.64% month on month from 1.253 billion at end-September, and down 2.89% cumulatively from 1.282 billion at end-July. There are three core reasons for the continued decline in laying hen inventories.

First, earlier restocking fell short. Deep losses in 2025 curbed farmers' restocking appetite, leaving fewer newly productive hens in Q2 2026. Data from the Laying Hen Branch of the China Animal Agriculture Association show commercial chick volumes rose YoY from March to September 2026, but overall restocking still lagged prior-year levels.

Second, old hens were culled at a faster pace. Sluggish egg prices and negative margins in the first three quarters of 2026 pushed some farmers to cull early to cut losses. In September, national old hen slaughter reached 2.9465 million birds per week, a relatively high level.

Third, as temperatures dropped rapidly from September to October, older hen houses saw declines in laying rates, further squeezing effective production capacity.

However, based on current farming-side behavior, laying hen inventories are expected to reach an inflection point and begin recovering in November, mainly supported by both a slowdown in old hen culling and an increase in newly productive laying hens.

The slowdown in old hen culling is mainly due to declining culling willingness in the market. Entering November, as egg prices fell below the Yuan 4/jin threshold, losses on the farming side widened further. The average price of old hens fell from Yuan 5.16/jin at the beginning of October to Yuan 4.82/jin by month-end, a decline of 6.68%. Low culling prices have made farmers "reluctant to sell", and proactive culling willingness has declined.

Second, some farmers believe egg prices are near the bottom and choose to continue holding old hens in hopes of a price rebound rather than selling at low prices.

Finally, farming costs offered some support. The egg-to-feed ratio is around 2.94, below the 3.0 break-even but not yet at deep-loss levels, so farmers still have the willingness to hold.

The continuous increase in newly productive laying hens is because the newly productive laying hens in November mainly come from chicks restocked in June–July 2026. Although restocking volumes in Q2 2026 increased year on year, the absolute volume remained relatively small. Nevertheless, the number of newly productive laying hens still exceeds old hen culling volumes, resulting in a net increase in production capacity.

At the same time, there are signs of recovery in chick restocking. In October, white-feathered broiler chick prices rose from Yuan 2.02/bird at the beginning of the month to Yuan 2.21/bird by month-end, an increase of 9.59%, reflecting some recovery in farming-side restocking enthusiasm.

In addition, laying rates are recovering seasonally. In November, temperatures drop further, laying hens enter their optimal laying period, and laying rates are expected to recover from around 85% in September to 88%–90%, increasing effective production capacity.

Based on current farming behavior and market data, November laying hen inventories are set to recover. Mysteel's estimate expects the weekly slaughter volumes to fall to 2.50–2.70 million birds in November, down 8%–15% MoM, with end-November inventories expected at 1.255–1.265 billion birds, up 0.10–0.20 million from 1.245 billion at end-October, a MoM gain of 0.8%–1.6% and the first rebound since July.

In addition, players are advised to watch whether the recovery continues in December. Once New Year and Chinese New Year stocking demand is released, if egg prices fail to sustain a rebound, restocking appetite may fade and some farmers may cull early to lock in profits. End-December inventories are expected at 1.265-1.275 billion birds.