January 13, 2021
China Animal Health Update (January 2021)

An eFeedLink Exclusive

By An-ming LI and Ngai Meng CHAN

With multiple factors to consider in the new year -COVID-19 restrictions on meat imports, recovery in swine production not being as fast as is publicised, increases in corn and soymeal prices -it is a challenge to predict how China poultry and swine prices would move from January, but we make some guesses in this article.

1. Swine

January saw a number of factors impacting swine supplies: gradual reduction of cured meat production which started in the winter season; annual stocking for the Spring Festival had yet to begin; supplies being impacted by COVID-19 outbreaks in northern regions. These factors had the combined effect of increasing supplies of market hogs, leading to prices dipping slightly to about RMB34-36 per kilogram.

Swine inventories, limited by the shortfall in sow productive capacity, are not recovering as quickly as indicated in some reports. And transport restrictions in corn-producing regions in northeast and northern china due to COVID-19 outbreaks led to surges in feed raw materials, supporting the longer-term trend in the increase in feeding costs. Based on the current tight swine supply situation domestically, coupled with the reduction in pork imports, it is expected that as food companies stock up ahead of the Spring Festival, swine prices would rise.

In order to prevent and control African swine fever (ASF), farms have reduced housing density and strengthened quarantine and disinfection, leading to a significant reduction in overall disease incidence. However, winter occurrences of Mycoplasmal pneumonia, and blue-ear induced coughing, fever and abortions posed an issue for veterinarians. Laboratory and diagnostic facilities on many farms remain backward and there is room for improvement to ensure accurate diagnosis and treatment.

2. Poultry
For China's layer market, significant impacts from COVID-19 outbreaks this year and the ongoing ASF situation have yet to be seen. Considering that egg consumption is steadily increasing in recent years, an issue which China's layer industry could address is the elimination of huge fluctuations often seen in egg inventory levels.

January is the peak period for the number of spent layers, with the nationwide layer inventory declining from 2020. Coupled with winter being off-season for layer production, supplies are at a low level. Average egg prices are currently at RMB9 per kilogram. With demand expected to pick up ahead of the Spring Festival, overall egg prices should strengthen.

For China's broiler market, prices were on a strong uptrend in January. Although low temperatures had reduced broiler productivity, overall broiler supplies remained sufficient. On the demand side, as more food companies stock up ahead of the Spring Festival and in anticipation of transport disruptions due to COVID-19 and inclement weather, the number of broilers sent for slaughter are expected to increase. While broiler producers have the tendency to hold stock to raise prices, overall supplies still exceed demand, and it is expected that prices would decline from their peak before the Spring Festival.

In terms of poultry health, control of avian flu this winter in China appears to be more effective than that in some other countries.

3. Government policies

On January 5, the Ministry of Agriculture and Rural Affairs issued a list of 180 demonstration farms for 2020 which served as a standard for the livestock industry.

On January 11, the Ministry issued a high-throughput testing standard for 37 types of mycotoxins in feed using liquid chromatography-mass spectrometry, which would take effect from April 1.

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