PHILIPPINE chicken egg output soared to a record level in the first half, but layer raisers are not rejoicing as farm-gate prices start to crash, which may worsen next year as production is anticipated to further surge.
Philippine Statistics Authority (PSA) data showed that chicken egg production from January to June rose by 8 percent year-on-year to an unprecedented level of 320,000 metric tons (MT) or equivalent to 6.72 billion pieces of eggs.
The record-level first-half output is an indication that expansion in the layer industry—driven by influx of new players from broiler and hog sectors—is not slowing down any time soon, industry players told the BusinessMirror.
The country’s chicken egg output last year reached an unparalleled level of 605,786.16 MT, the first time in history that total production breached the 600,000-MT level.
“There is already a supply glut. The players that incurred losses in the broiler and hog industries ventured into chicken egg production,” Gregorio San Diego, chairman of the Philippine Egg Board Association, told the BusinessMirror.
Investing in chicken egg production seemed lucrative last year, particularly at the start of the pandemic, since demand for the commodity rose, driven by the months-long lockdown and rise of community resellers and home-based bakery and pastry shops.
However, the opportunity was immediately seized by new entrants, particularly hog raisers reeling from the impact of African swine fever on their businesses.
“And some of the new players in the industry are big investors with some having a capacity of one million layers,” San Diego said, noting that the current situation is forcing small-scale layer raisers to scale down on production. “I, myself, will reduce my loading from 100,000 layers to just 50,000 layers.”
San Diego pointed out that the increased egg demand experienced at the start of the Covid-19 pandemic is no longer felt or seen today after consumers’ purchasing power weakened as the pandemic dragged on.
San Diego explained that about 500,000 parent stock layers day-old chicks (PS-L DOCs) were imported last year, eventually resulting in the spike of output this year due to higher inventory of layers.
PSA data showed that the country’s layer inventory as of April 1 reached a record-high 43.136 million birds.
He noted that the current situation could be even worse than the 2007-2018 and 2017-2018 supply glut experienced by the industry. (Related story: https://businessmirror.com.ph/2018/06/13/oversupply-sees-egg-trade-treading-on-shells/)
“The farm-gate price for medium-sized eggs is now between P3 and P4 per piece while large-sized eggs are averaging P4.5 per piece from P6 per piece,” San Diego said.
“And the drop in prices comes at a time when our feed costs are rising,” he added.
In some areas in the country the farm-gate price of eggs has fallen to as low as P2.5 per piece from P4 to P4.5 per piece, sources told the BusinessMirror.
PSA data showed that the average farm-gate price of chicken eggs in the second quarter declined by 2.68 percent to P117.82 per kilogram from P121.07 per kilogram in the same period of last year.
San Diego cautioned that the glut in production will persist until next year as importation of PS-L DOCs continue at high volume and may even reach an unprecedented level this year.
Government data showed that PS-L DOCs imports in the first half have reached nearly 400,000.
In 2018, the government estimated that 500,000 PS-L DOCs would produce around 50 million day-old pullets, which will eventually grow and mature to lay eggs.
The 50 million DOPs can continuously lay eggs for at least the next 300 days of their lives, resulting in a total output of 15 billion eggs.