Egg Prices at Farm Level Plunge: What Is Driving the Decline?

Jakarta, CNBC Indonesia - Laying hen farmers are complaining that egg prices have slumped again recently. An oversupply condition has caused farm-gate egg prices to fall far below the government’s Purchase Reference Price of Rp26,500 per kilogram. Chairman of the National Laying Hen Association, Yudianto Yosgiarso, said the plunge in egg prices has put severe pressure on farmers across various regions, despite their efforts to maintain national egg self-sufficiency. "We who have been striving to achieve egg self-sufficiency in Indonesia, yet our prices keep falling," Yudianto said during a press conference at the Ministry of Agriculture office in Jakarta on Tuesday. He revealed that egg prices in several production centres had even dropped to nearly Rp21,000 per kg, a figure considered far below what farmers need to sustain their businesses. "In East Java, the price fell to Rp21,500 per kg, then in Central Java it was around Rp22,500 per kg. In West Java and particularly Jakarta, it was around Rp22,500 to Rp23,000 per kg," he said. The average cost of production for chicken eggs at the farm level is around Rp24,000 per kg. Yudianto noted that the situation is extremely burdensome for farmers, with pressure mounting as production costs also rise, mainly due to higher feed prices influenced by the global situation and the rupiah’s exchange rate against the US dollar. "This is very burdensome and hitting us hard, especially with the current geopolitical issues, where the dollar exchange rate has also soared, causing all feed prices to explode," he stated. Yudianto confirmed that the main cause of the declining egg prices is the abundant supply in the market. "Clearly, this is because we are experiencing oversupply," he explained. Amid this pressure, the association welcomed several measures decided by the Minister of Agriculture, who also serves as Head of the National Food Agency, Amran Sulaiman, to support farm-gate egg prices. Yudianto expressed appreciation for the government’s decisions, which he believes can help maintain the viability of laying hen farmers’ businesses. "Thank you to the Minister of Agriculture, who also serves as Head of the National Food Agency, for deciding several important matters today. This greatly helps our survival as farmers," Yudianto said. One of the steps taken by the government is to reinforce the ban on purchasing eggs below the Reference Price of Rp26,500 per kg. He noted the policy has been communicated to various parties, including the Police Food Task Force. "We therefore urge all traders and modern retail businesses to help us and also comply with what the Minister has conveyed. Regarding this letter, it has been copied to the Food Task Force, stating that from today there will be no more egg purchases below the Reference Price of Rp26,500 per kg," he said. He also urged farmers across Indonesia to report any instances of egg purchases being made below the government’s set reference price. "We convey to all farmers throughout Indonesia: if after today there are still pressures or purchases of eggs below Rp26,500 per kg, please report immediately to the Head of the National Food Agency. This would help us greatly," he added. Additionally, Yudianto disclosed that the government, through the National Nutrition Agency, will also increase the absorption of eggs from farmers. Whereas previously absorption occurred once a week, it will now be increased to three times a week. "We also thank the Minister for his initiative; the National Nutrition Agency will also absorb eggs from farmers three times a week, returning to that frequency, whereas previously it was only once," he stated. Farmers hope these various measures can promptly lift egg prices at the producer level and alleviate the pressure they have been facing due to the supply surplus and high production costs.