Yuhe International Inc. has signed contracts with two different companies to purchase externally produced eggs at a price between RMB1.45 and RMB1.50 per egg.
The eggs will come from a total of 420,000 sets of parent breeders with a combined egg-laying capacity between 55 million and 60 million eggs. "We believe there will be a supply shortage in our market going forward," said Zhentao Gao, chairman and CEO of Yuhe. "We began to see tangible signs of this as our broilers are currently commanding average selling prices that are up significantly from the prices we were seeing in the second quarter of 2010. Given our market outlook we took advantage of a down period in the broiler market to lock in a steady supply of quality broiler eggs at highly competitive prices."
The company does not expect the contracts to impact projected broiler volume output; a total 2010 output of 150 million broilers and a 2011 output of 250 million broilers is anticipated.