February 10, 2022

 

High feed costs intensify challenges for China's poultry

 

The releases of broiler chickens in China climbed from 10,637 million birds in 2019 to 13,187 million in 2020.

 

The production of white feather, yellow feather and 817 hybrid broilers reached record highs, as was the case with the annual average of the layers inventory. The per capita annual consumption of poultry meat increased by 4.08kg, to 22.67kg.

 

The price of corn rose from ¥1,866 /tonne (US$292.96) in early 2020 to ¥2,594/tonne (US$407.26) by end of 2020. The price of soybean meal rose in October to ¥3,200/tonne (US$502.41) in December. As the price rally of pork lifted the price of chicken, increased feed costs did not affect broiler breeding profit or inventory expansion.

 

This year, grain prices rallied globally, and the price of corn strengthened from ¥2,594/tonne (US$407.25) in 2020 to ¥2,840/tonne (US$445.89) in January 2021. In the first half, the prices of corn stayed above ¥2,800/tonne (US$439.61), while those of soybean meal hovered in the range of ¥3,400-3,800/tonne (US$533.82-596.62) throughout the year.

 

Additionally, feed additives mostly increased amid higher production costs. Thus, feed prices soared relentlessly. By November, the price of broiler feed rose to ¥3,800/tonne (US$596.60), from ¥2,800 /tonne (US$439.60) in 2020, an increase of nearly ¥1,000/tonne (US$157). Hence, the cost of white feather broilers farming increased from 2020, from ¥8.13 /kg (US$1.28) to ¥9.65/kg (US$1.52) in January-November 2021. The combined cost of yellow chicken and 817 hybrid broiler climbed from ¥8.14/kg (US$1.28) to ¥9.84/kg (US$1.28). The breeding cost of layers in China rose from ¥6.48/kg (US$1.02) to ¥7.97/kg (US$1.25).

 

Meanwhile, surging feed costs have decimated the inventory growth of broilers. The average volume of broiler chickens, which stayed around 12 billion birds in January-November 2020, shrank to 11.7 billion in January-October 2021. The reduction of the broiler population seemed modest, but the broiler slaughter volume in November 2021 plummeted by nearly 20% compared with that in November 2020.

 

Average layer numbers in January-November 2021 decreased 23 million birds from January-November 2020’s average. The layer population in the first half of 2021 remained in the range of 1.1-1.2 billion birds, decreasing substantially compared with over 1.4 billion birds in late 2020. This curtailed the sales of feed.

 

eFeedlink statistics show that the production of feed in January-November 2021 decreased 3.35% compared with the same period in 2020, while the production of layer feed diminished 6.63%.

 

- David Lin, eFeedLink