August 27, 2024

 

Difficult times for the profits of Chinese native broiler producers

 

With the outbreak of African swine fever (ASF) in China in August 2018, pig release volumes in the country plunged more than 40% in 2019 compared with 2018.

 

This development led to an increase in China's broiler output from less than 900 million birds to 1.3 billion birds in 2020.

 

Entering 2021, as the supply of live pigs gradually recovered, the consumption of chicken started to decline — a key factor in falling broiler consumption. From 2020 onwards, the output of yellow-feather broilers declined in the next three years, while the output of white-feather and hybrid broilers continued to expand.

 

Additionally, avian influenza and the COVID pandemic hindered the consumption of chicken meat in China.

 

Consumer preference also plays an important role in chicken consumption, with native chickens — that consumers were once willing to pay a premium price for — losing their appeal in recent times. They also have to compete with hybrid chickens that are sold online as native yellow chickens at a lower price.

 

To overcome serious challenges, producers cut the prices of native yellow chickens, suffering losses.

 

In 2023, the profit returns of the three major native broiler producers in China shrank, with two seeing deficits.

 

Wen's native broiler sales hit a record high in 2023, with a total sales of 0.83 million birds, a year-on-year increase of 9.51%. However, the selling price of live chickens averaged ¥13.69/kg, a year-on-year decrease of 11.51%, resulting in falling profits.

 

Last year, Xiangjia slaughtered 89.82 million native broilers, an increase of 8.8% year-on-year, but the company suffered a net loss of ¥147 million, a year-on-year decrease of 238.99%, compared with its profit a year ago.

 

As live poultry markets are phased out gradually, native broiler producers in China responded by building more slaughterhouses and have begun to produce poultry varieties that can retain freshness and taste.

 

For now, the prospects of the native broiler industry remain uncertain.

 

- Shi Tao, eFeedLink