April 13, 2021
China Animal Health Update (April 2021)
An eFeedLink Exclusive
Being the peak of China's spring season, April saw mild weather and lengthened daylight hours, with favourable feed intake and growth for livestock. April could be said to be the peak production period for the first half of 2021.
Since March, swine prices have fallen by 30%, with prices in many regions reaching RMB22 (~US$3.36; RMB1 = US$0.15) per kilogram, and prices in some regions are close to RMB20 per kilogram. The rapid price decline is due to a few factors: one, weak consumption following the Spring Festival; two, panic selling due to concerns of African swine fever (ASF); three, restrictions on inter-provincial transport of swine starting April 1 which has added to the pessimism of producers. Public data does not fully reflect the situation on the ground, and actual swine inventories and development of the ASF situation would determine how the swine market would progress.
With only a portion of farms not affected by ASF to date, many other farms which are restocking have significantly reduced their housing density, and are in fact simultaneously culling and replenishing their stock. The supply of gilts remains an issue; with the use of commercial stock as breeding sows, productivity has significantly fallen. While quarantine, disinfection and testing remain critical in controlling ASF, the effectiveness of using many functional feed additives remains unclear, and their use have significantly raised production costs. The recent situation of producers capitalising on high swine prices had drawn market attention away from these underlying issues; now these issues are resurfacing. Currently independent swine producersare close to breaking even, while producers who purchase piglets are making a loss.
Although swine prices continued to fall, pork prices hovered in the range of RMB17-20 per kilogram. As swine prices in some regions drop below RMB20 per kilogram, producers would resist prices falling further. In fact, swine prices in some regions are stabilising and showing signs of rebounding.
Other infectious diseases of current concern are swine fever, blue-ear disease and foot-and-mouth disease, and managing the vaccination of these diseases is a challenge. Seasonal parasitic diseases should also not be neglected, as they could lead to hidden but significant monetary losses for producers.
Helped by lengthening daylight hours and rising temperatures, egg productivity increased. Although currently there is a slight increase in layer inventories, the level is lower than in previous years. Egg prices in April saw a slight increase, with many regions reporting a RMB7.5-8 per kilogram price range. As egg production continues to rise, it is expected that oversupplies would occur somewhere between April to May, bringing down prices.
Along with declining swine prices in April, broiler prices also weakened. The current broiler inventory is relatively large, an increase from March. Looking at day-old chick prices being maintained at the current high level, broiler inventories should not decline significantly from May to June. Current prices of white-feather broilers are above RMB8.5 per kilogram, reflecting reasonable market sentiment. But with lagging deliveries, broiler prices are expected to fluctuate in the short-term.
Temperature fluctuations in the spring season easily lead to wet litter in poultry, and there is significant increase in internal and external parasitic infections. Bacterial infections from Mycoplasma, E. coli and Salmonella continue to result in long-term losses for producers. The use of functional feed additives, including enzymes and probiotics, to prevent disease is widespread. While they can be effective, what is more important is eliminating diseases at their source along the poultry supply chain through biosecurity measures, to minimise drug residues in poultry products.
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