August 10, 2022
China's poultry and pork compete for market share whilst dealing with price fluctuations
An eFeedLink Hot Topic
Over the past decade, China's poultry meat consumption has increased consistently year by year.
Correspondingly, overall domestic pork consumption has declined steadily. One factor behind China's falling pork consumption was the outbreak of African swine fever (ASF) in the country in 2018. Thus, China's pork consumption decreased from 52.28 million tonnes that year to 28.17 million tonnes in 2019.
Meanwhile, China's poultry meat production expanded rapidly. In 2019, the number of broiler chickens sold in China (including white-feather broilers, yellow-feather broilers and hybrid broilers, etc.) increased rapidly from 8,928 million in 2018 to 10,637 million. In 2020, the number surged to 13,187 million. Per capita chicken increased from 11.20kg/year per capita in 2018 to 16.19kg/year per capita in 2020. Including duck and goose meat, poultry consumption was 23.13kg per capita in 2020, nearly equal to 23.27kg per capita of China's pork consumption in 2020.
Last year, as the threat of ASF waned in China, pig farming recovered steadily, leading to a recovery of pork consumption from 60% during the pre-ASF period to 95% by the end of 2021. The full recovery in pork supply lowered record high prices of live pigs, from ¥36.01/kg at the beginning of 2021 to ¥16.61/kg by end of the year. Inevitably, the wholesale price of pork carcass tumbled, from ¥45.48/kg in early 2021 to ¥22.92/kg by the end of 2021.
As for chicken, strong demand drove the capacity expansion of China's broiler industry in 2019-2020. But overcapacity ensued, dragging the price of white feather broilers from ¥9-10/kg at the start of 2021 to ¥8.10-8.20/kg by the end of the year.
Additionally, as the price of corn surged from ¥1,900-2,500/tonne in 2020 to ¥2,700-3,000/tonne in 2021, the price of soybean meal rose in tandem from ¥2,800-3,300/tonne in 2020 to ¥3,900-3,600/tonne in 2021. This lifted the cost of white feather broiler breeding from slightly over ¥8/kg in early 2020 to ¥9.20/kg in early 2021. With prices tumbling and farming costs significantly higher, white-feather broiler farming was at a loss throughout the year.
Due to concerns over overproduction and the risk of avian influenza in spring, China's yellow feather broiler industry began to cut production since early 2021. This has contributed to sustaining the profit of the farmers.
Despite climbing feed costs, yellow feather broiler farms achieved a profit of ¥2.37/kg.
- Shi Tao, eFeedLink