Eggs or Chicken? The Price Isn’t That Different Now

Eating chicken seems the more practical option!

A kilogram of eggs costs between Rs 120 to Rs 135.

(Photo: iStock)

As winter approaches, egg prices have risen again. And this time, a single egg is priced around Rs 7!

Poultry farmers in Pune are selling eggs at a rate of Rs 585 per 100 eggs, which brings the price to Rs 6.5 to Rs 7.5 per egg. This translates to a price of Rs 120 to Rs 135 per kg, given that the average weight of an egg is 55 grams – not too different from the price of chicken, which costs Rs 130 to Rs 150 per kg in Pune.

In the last six months, farm gate prices of eggs in Pune have risen from Rs 375 for 100 pieces. This, despite the rate of broiler birds dropping to Rs 60 per kg against the older price of Rs 90, the Indian Express reported.

Egg prices usually rise at this time due to winter demand, while broiler rates fall because supply goes up, with the birds taking less time to reach slaughter weight. But we have never seen this kind of price spiral in eggs before.

Leading egg products manufacturer from Erode, Tamil Nadu, to the <i>Indian Express</i>

Executive member of the National Egg Coordination Committee Raju Bhosale has credited the price hike to an estimated 15 percent increase in demand, which has also been driven by the rise in vegetable prices. Onions and tomatoes are selling at a retail price of Rs 40 to Rs 50 per kg, whereas prices for vegetables like cauliflower, cabbage and eggplant range even higher at Rs 60 to Rs 100 per kilogram.

“When vegetables turn costly, people switch to eggs, pushing up its rates as well. This is simple substitution effect,” Bhosale told the Indian Express.

The chairman of the Mysore zone of NECC, MP Sateesh Babu, linked the surge to demonetisation. The drop in demand from the sudden withdrawal of Rs 500 and Rs 1,000 rupee notes has led to lower demand for both broiler birds and eggs. Farm-gate rates for both was lower than last year, until July.

Data: Indian Express(Photo: The Quint)

Simultaneously, drought in Karnataka and Tamil Nadu caused prices of maize, the main input for poultry production, to hit record Rs 1,900 per quintal levels. As poultry farmers were squeezed between low realisations and high costs, many of them resorted to premature culling of their birds, the effects of which are being felt now on the supply side.

MP Sateesh Babu, chairman, NECC Mysore, to the <i>Indian Express</i>

The country’s poultry market is divided into 25 zones.

The Namakkal zone alone, for instance, witnesses average arrival of 3.5 crore eggs per day. This zone normally also feeds the north Indian market, whereas in the current year, there has been very little inter-zone transport of eggs, including from Namakkal.

MP Sateesh Babu

Why has the price recovery coming from severe supply pressure been more for eggs than broiler birds? According to an egg products manufacturer in Tamil Nadu, it is because the broiler production cycle is substantially shorter. A one-day old bird weighing around 40 grams takes 40 to 42 days to attain a normal weight of around 2.5 kg before being ready to be sold for slaughter. It is lower during winter – 37 to 38 days.

On the other hand, when it comes to egg-laying birds, the time needed for them to grow enough for production is 18 weeks. A normal commercial bird would produce 330 eggs till it is 72 weeks old. Within the peak production period from week 27 to week 40, the bird is said to lay an egg every 26 to 27 hours, which goes up to 32 to 33 hours by the end of week 72.

When egg prices are goods, farmers may maintain the birds till 90 weeks, even if laying happens only once in 35 to 36 hours. This time, since egg rates were very low till July, with broiler realisations somewhat better, many layer farmers went in for early culling. It has impacted supplies now, just when demand is peaking.

Egg product manufacturer from Erode to the <i>Indian Express</i>

Given the fact that egg production is not recovering at the speed of the boiler, people might have to wait a few weeks before prices come down. Eating chicken, in the meantime, seems to be a more practical option.

(With inputs from the Indian Express)