International Comparison of Egg Production Cost and Marketing Margin-A Study of 15 Selected Countries.

Abstract

The present study examined the production cost factors and marketing margin involved in producing eggs in the surveyed countries. In this study the egg production cost is defined as the total of the direct costs (feed and chick) and indirect costs (labor, machinery & implement, building, power and medicine). Marketing margin is considered as the difference between egg retail price and producer price. The cost of production for eggs varies widely around the world and the feed cost is the single most important factor among them followed by labor and bird depreciation cost. The objectives of this study are; to analyze the different cost factors affecting the production of a kilogram of eggs; to compare the marketing margin from producer to retailer. In order to fulfill the objectives, 15 selected countries around the world were surveyed during 1996. Data were collected based on different cost factors as well as producer and retailer prices for the respective countries.It is evident from the study that grain producing countries like USA, Brazil, China and India had a considerably low cost in producing eggs. Other developing countries, even though not considered as grain producers, had a lower cost due to cheap labor and low chick cost. Countries such as Netherlands and UK where technical standards are similar to United States, have high production cost due to the high competitive cost of feed and labor. The surveyed countries were divided into high cost, medium cost and low cost according to the cost of production levels. With the favorable trade in the future, world egg production will expand and may concentrate in areas where the low cost feed grains are available. China will continue to be the largest egg producer in the world and its export potential is high especially since the opening of new markets with the annexation of Hong Kong. India and Brazil too have tremendous future potential with the large consumer market and increasing household income. Egg trade will continue to improve within the respective regions and therefore the share of major exporters like Netherlands will have a reduction of its export to Asia as well as within the EU countries.