China’s egg industry is shifting southward, breaking the “Northern eggs sold to the South” model. Over 160 million new hens were added in 2024, yet profitability remains under pressure due to fluctuating prices and rising costs. Value-added processing remains underdeveloped, with 80% of processed eggs still traditional products. However, rising demand for specialty egg products could drive future growth.
China’s egg industry is undergoing a significant transformation. The 2024 Report on the Development and Future Trends of the Egg Industry, released by China’s National Egg Industry Technology System, highlights rapid consolidation and expansion in the layer farming sector. This shift is not just about growth—it’s also reshaping the country’s production geography.
Traditionally, the market followed a “Northern eggs sold to the South” model, but this pattern is changing. Southern provinces are emerging as major production hubs, altering supply chains and regional market dynamics.
In 2024 alone, 35 new layer farming projects were signed, 31 commenced construction, and 32 became operational, adding more than 160 million laying hens nationwide. Guangxi led with 15 new projects, followed by Guangdong, Henan, Hunan, and Shanxi provinces.
What’s Driving the Southward Expansion?
Several factors are fueling this geographical shift:
- Eroding Regional Cost Advantages
The traditional feed production strongholds in the North are losing their edge as the industry embraces deeper vertical integration. This levels the playing field between regions.
- Technology Overcoming Climate Challenges
Smart and advanced farming systems and technologies are helping mitigate the high heat and humidity in the South, enabling efficient large-scale egg production in previously challenging environments.
- Declining Transport Cost Benefits
Long-haul egg transportation is becoming less cost-effective, prompting producers to establish operations closer to consumer markets.
The move toward large-scale farms is also evident, with 43 projects exceeding one million hens and six surpassing four million hens in 2024.
Production Growth vs. Profitability Challenges
By December 2024, China’s laying hen inventory reached 1.28 billion, a 5.8% year-on-year increase. Annual egg production hit 29.41 million tonnes, marking a 3.6% rise.
Yet, despite this growth, profitability remains under pressure:
- Egg price fluctuations due to shifting supply-demand dynamics.
- Rising feed and labor costs squeezing producer margins.
- Profit instability in 2024—losses in the first half, followed by recovery later in the year, driven by rising pork and vegetable prices.
Even after a market rebound, profitability remains fragile. Average profits per hen fell 12.3% year-on-year to CNY 31.90 (USD 4.40) in 2024.
Weak Links in the Value Chain
One of China’s biggest challenges in the egg sector is underdeveloped processing capacity, particularly in value-added products. The industry is heavily focused on raw egg production, lacking a robust processing and distribution network.
- Limited Supply Chain Stability
The absence of a well-integrated processing sector leaves producers vulnerable to market volatility.
- Low Value-Added Processing
80% of processed egg products remain traditional items, while modern, high-value categories like bakery, B2C liquid eggs, and ready-to-eat products remain underdeveloped.
- Weak Demand Absorption
Compared to markets in the U.S., EU, and Japan, demand for processed egg products remains sluggish.
Opportunities in High-Value Processing
Despite these challenges, technology and shifting consumer preferences are opening new opportunities.
Growth in specialty egg products, including:
- Bakery-specific egg powders
- Ice cream and dairy beverage egg powders
- Ready-to-eat seasoned eggs
- B2C liquid egg products
With Chinese consumers demanding greater convenience and premium quality, value-added processing may be the industry’s next growth driver.
China’s egg production landscape is evolving, with a geographic shift southward, rising production volumes, and intensified competition. However, with cost pressures and overcapacity risks on the horizon, the sector’s long-term resilience may hinge on developing a stronger value-added processing industry.
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