Profits in the egg market shift to traders

The rise in egg prices on the European market is flattening somewhat, according to data from Eurostat. However, the market remains very tight. This is mainly attributed to avian influenza. As a result, local quotations are rising much stronger, indicating that profits are shifting. When we look at European prices, we see that after a significant increase in week 43, the following week shows some flattening. In week 42, the average price of free-range eggs in the European Union rose from €275.92 to €280.79. The following week, the price increased roughly by €1 to €281.80. According to EU reports, the Netherlands and Germany have been closely aligned in recent weeks with prices moving largely in parallel. Prices in both countries are now above €300 per 100 kilograms. Since mid-2023, eggs in Germany have clearly become more expensive than in the Netherlands, whereas prices in the Netherlands were usually higher before that. This is the result of market tightness due to the German ban on killing day-old chicks. The law was enacted in 2022, but since laying hens are typically used for over a year and a half, regular laying hens remained in production well into 2023. As that generation disappeared, the tightness in the market increased throughout the year, causing German prices to catch up to Dutch prices. However, since week 41, the situation has reversed again, and prices in the Netherlands are once more above the German level. This shows that the tightness in the Dutch market, where there is very strong demand from processors, is a more significant factor for the price premium than the additional costs associated with ovosexing. Both prices are now largely moving sideways and remain close to each other. This, however, does not mean that the price increase is coming to an end. The market remains exceptionally tight. Part of this is still attributed to strong demand, but increasingly, supply is also coming under pressure due to the rapid spread of avian influenza. Meanwhile, the Netherlands, Belgium, Austria, Ireland, and Great Britain have once again taken measures against the virus, including a nationwide confinement mandate. Meanwhile, the number of infections in German companies is rising very quickly. This spread is causing significant turmoil in the market once again. Profits shift to tradersIn local quotations, the price increase is even more visible. In the German market, the price has increased by 17 cents per 100 eggs in the past two weeks to €18.80. In the Netherlands, the increase was considerably stronger: the price rose in the same period by more than €1, from €18.40 to €19.55. Thus, the price on the Amsterdam index increased by 6.3%, compared to a rise of 0.9% for the Weser-Ems quotation. This difference indicates that particularly traders are benefiting from the tightness. The European data is measured at the trading level, while the European Union records the sales from packing stations. This is noteworthy, as until recently, the largest profits were precisely received by the packing stations. This also explains why the Dutch price is rising faster than the Weser-Ems quotation, which is measured in the same way as Eurostat. According to market insiders, this shift is a result of panic buying, which is temporarily disrupting normal market dynamics.