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December 1, 2008
 
China Feed Market Bi-Weekly Review: Overall slide in feed production and consumption in November

 

 

An eFeedLink Exclusive

 

Weak layer and aquaculture rearing activities caused China's feed production and consumption to fall in November.

 
 

Market Analysis

 

Hog and broiler inventories increased slightly in November while inventories of layers and aquaculture fell in the lull consumption season for egg and aquaculture products. Ruminant inventories recovered marginally while inventories of other livestock maintained at a stable level.


Hog feed, broiler feed and ruminant feed production increased by 3.77 percent, 4.72 percent and 3.65 percent on-month respectively. Layer feed and aqua feed production fell by 6.99 percent and 43.67 percent on-month respectively. The production of other livestock feed grew by 0.52 percent on-month. Overall feed production fell by 4.65 percent on-month. 


Animal rearing profits improved slightly in November due to lower production costs brought about by lower feed raw materials costs, lower broiler chick replenishment costs and increased use of self-formulated feed. The improvement of animal rearing profits was especially obvious in the hog sector, but profits remained low for backyard farms.


Regional-wise, broiler rearing activities picked up in northern China while hog rearing improved in southern China. At the same time, broiler duck rearing activities were more vibrant in northern China as compared to southern China. The rearing of quails was also getting more popular.

 

Table 1:Percentage change of China’s feed production and consumption in November 2008

 

Hog feed

Layer feed

Broiler feed

Aqua feed

Ruminant feed

Others

Total

Feed production, percentage change on-month 

3.77%

-6.99%

4.72%

-43.67%

3.65%

0.52%

-4.65%

Feed production, percentage change on-year

8.26%

-14.16%

-39.47%

-29.60%

-18.78%

-15.98%

-16.07%

 

 

 

 

 

 

 

 

Feed consumption, percentage change on-month

3.53%

-7.17%

4.85%

-43.67%

3.61%

0.59%

-4.75%

Feed consumption, percentage change on-year

8.26%

-14.16%

-39.43%

-29.60%

-18.78%

-15.92%

-16.06%

eFeedLink’s statistics
 

eFeedLink's statistics

 

Hog feed
 

Hog prices stopped its decline in November and even climbed slightly towards the end of the month due to increased pork consumption in winter. Piglet supplies increased, hog releases grew and inventories of medium to large-size hogs fell. Overall, a small increase in hog prices and increased demand for pork in winter led to more active hog trade and increased the demand for hog feed.

 

Layer feed
 

Layer rearing entered into its traditional lull period in November. The slide of egg prices affected layer rearing profits and reduced layer rearing interest. Cold weather temperature in northeast, northwest and northern China increased layer rearing costs as farmers had to spend more on heating facilities. As such, many farmers cut back on layer replenishment. Declining layer inventories thus led to a fall in layer feed demand.

 

Broiler feed
 

Broiler rearing activities improved in November. Weak broiler chick replenishment during the first ten months of the year has led to low broiler inventories in November. Broiler farmers expected broiler consumption to pick up prior to the Lunar New Year period in January next year. As such, farmers were eager to replenish more broilers in November. This consequently led to an increase in broiler feed consumption.

 

Aqua feed


Aqua feed demand fell drastically in November as the cold winter weather prohibited aquaculture rearing activities.

 

Ruminant feed

Ruminant rearing activities were badly affected by the melamine incident in October, but have since started to recover gradually. Ruminant feed demand thus increased marginally in November.
 
 

Market forecast


Livestock inventories and supplies will likely increase in December as farmers are expected to actively replenish their stocks ahead of the Lunar New Year in January 2009. However, as many feed millers are carrying over considerable volume of feed, the increased in feed demand will unlikely lead to a significant increase in feed production.
 
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