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 That is piling pressure on producers already grappling with tanking
demand from a public spooked by fears over bird flu, deepening what
some farmers say is one of the biggest crises to ever hit the egg
industry in China, the world's top supplier.
"You want to sell your chickens, but you can't. You have no choice
but to keep raising them and watch losses accumulate every day,"
said Zhang Dong, who has 10,000 laying hens in the central province
of Hubei.
Chinese companies that churn out eggs for commercial sale typically
sell hens at live poultry markets after 400 to 500 days of laying,
when they begin to produce less regularly.
But regional authorities have shut poultry markets and restricted
the transportation of birds as they fight the spread of the H7N9
virus that has killed around 100 people since October.
That is nearly three times more deaths than the last major bird flu
outbreak in the country in 2013, worrying the public even though
nearly all fatalities have been among people that have had direct
contact with chickens. There is no evidence the virus can be caught
from eating uncooked meat and eggs, or spread easily between humans.
Unlike many other strains of the virus, hens with H7N9 are difficult
to identify as they show little or no signs of symptoms, meaning
that mass cullings seen during recent bird flu outbreaks in places
such as South Korea and Japan have not so far been repeated in
China.
The added time that producers must spend looking after birds beyond
their prime will also drag further on prices for eggs in the world's
top supplier after they hit seven-year lows this week below 4 yuan
($0.58) per kilogram, with chickens that have dodged slaughter
stoking a supply glut as they keep on laying.
"The industry's at a crossroads," said Feng Cheng, a 31-year-old
farmer in the southern province of Anhui, who has a flock of 200,000
hens.
He is paying to feed 30,000 chickens that are past their prime and
losing value, while sinking egg prices have halved his income since
Lunar New Year at the end of January.
China's egg industry is dominated by small family-run businesses,
with little leeway for enduring hard times.
In an assessment of current market conditions based on an egg price
of 4.4 yuan per kg and feed costs of 2.3 yuan per kg, a farmer would
lose 32.5 yuan over the lifetime of every hen in his or her flock,
the government said this week.
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"Eggs prices are falling sharply. Prices of feed materials like
soymeal and corn are still rising. Life is so tough," Feng said by
phone from his farm.
CHICKEN AND EGG
Four years ago, the nation's egg-laying flock shrank by 10 percent
as farmers reduced their flocks after an outbreak of H7N9 flu
slashed prices of eggs and chicken meat. The virus did $6.5 billion
in damage to the whole agricultural sector.
It is not clear how many hens from the nation's current flock of
over 1 billion have been affected by the recent spate of market
closures.
Shi Qing, an egg wholesaler in Hubei, said sales had been hit hard
by the oversupply and concerns about catching bird flu.
In the month after 2016's Lunar New Year, he sold 80,000 boxes of
eggs, around 28.8 million eggs, but this year he has sold about half
that.
And there are strong fears it will take some time for the industry
to recover.
"Usually, farmers will reduce stocks, which would help support
prices," said Jim Huang, chief executive of China-America
Commodities Data Analytics Inc.
"But ... with (this virus), farmers are being forced to keep the
spent hens, as live poultry markets are closed and people are scared
of eating chicken, which further increases supplies."
(Reporting by Hallie Gu and Josephine Mason; Editing by Joseph
Radford)
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