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Market Reports

February 10, 2020
 
China Animal Health Update (February 2020)

An eFeedLink Exclusive

By An-ming LI and Ngai Meng CHAN
 

February was supposed to be the festive Spring Festival period, but the entire country was thrown into disarray by the sudden outbreak of the novel coronavirus. The logistics flows of people and goods were hindered, consumption was at its lowest point, and livestock production and sales in certain regions were disrupted.

1. Swine

Inventory levels of fattening pigs were still at a historical low in February, following the market release of pigs before the festive period. Prices were firm despite government intervention, staying at about RMB38 per kilogram. With the return of farm workers and students to their daily activities, swine prices should continue to strengthen.

The low housing densities on swine farms in February, coupled with the strengthening of quarantine and preventive measures due to the impact of African swine fever (ASF), led to the significant decline in disease transmission and incidence. Occurrences of diseases such as foot and mouth disease, porcine epidemic diarrhoea, Mycoplasma pneumonia, and porcine circoviral diseases apparently disappeared. A number of farms had forgone some of their vaccinations for swine immunity due to concerns of cross-infection - these did not happen in reality. Clearly, a hygienic environment is the best prevention against infectious diseases.

2. Poultry

Impacted by the novel coronavirus epidemic situation and an outbreak of bird flu, the egg and broiler market situations were relatively chaotic in February.

For the egg market, on one hand the restriction of transportation activities (due to the novel coronavirus) led to an inventory backlog of eggs in production areas. On the other hand, companies across various industries postponed resuming work, particularly the F&B sector, schools postponed resuming classes, and people went out shopping less. These all significantly reduced consumption, leading to a sharp decline in egg prices after the Spring Festival. In Jiangsu province, farmgate prices fell to RMB4.6 per kilogram, troubling many producers. It is expected that egg prices would continue to fluctuate at a low level in the short term, and with the relaxation of transportation policies, prices should gradually rebound.

Also due to the novel coronavirus, transportation of feedstuffs and broilers were disrupted. Live poultry trading were strictly prohibited in many places, and slaughter companies postponed resuming work, leading to a clear gap between supply and demand. It did not help that the recent outbreak of bird flu in Hunan province created further market uncertainty. However, as the pork supply situation remains tight, chicken consumption should not be too bad, and the outlook of the latter remains good. It is expected that when broiler markets resume normal operations, and when the novel coronavirus situation is brought under control, broiler prices would strongly rebound.

As poultry farms were generally operating at overcapacity before the Spring Festival, the risk and incidence of infectious diseases significantly increased. These included diseases associated with housing density such as enteric diarrhoea, diseases associated with housing climate such as Mycoplasma diseases, and diseases associated with breeding such as avian leukosis. Bird flu has always been a relatively bigger threat. An outbreak of H5N1 in Hunan province in February raised the alarm for poultry farms.

3. Government policies

On February 4 the Ministry of Agriculture and Rural Affairs issued an urgent notice that these vehicles should not be restricted on the basis of epidemic prevention of the novel coronavirus: those carrying young or breeding livestock; feedstuffs; livestock products.
 


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