November 18, 2008
China Feed Market Bi-Weekly Review: lacklustre performance in feed production and consumption
An eFeedLink Exclusive
Low animal rearing profits led to weak animal replenishment during the first half of November. This thus caused feed production and consumption to fall during the first half of the month.
Hog prices descended rapidly during the past two weeks. Hog farmers had held back on releases after the China National Day on October 1 as they looked forward to better hog prices. However, things worked against the farmers' wishes and hog prices fell instead. Lower hog prices prompted hog farmers to release their hogs in a hurry. Increased hog supplies then drove hog prices down further.
Despite less active hog replenishment due to lower hog prices, hog inventories had registered little changes due to weak hog demand. This had supported firm hog feed production and consumption volumes.
However, the release of new corn crops in many regions will lead to an increased demand for feed concentrates and reduce the demand for compound feed.
The detection of melamine in the eggs produced by Dalian's Hanwei Enterprise Group in October triggered a plunge in egg sales and also led to premature elimination of layers in early November. However, egg sales and layer rearing activities resumed shortly as consumers and farmers regained confidence in eggs after the authorities took appropriate action to remedy the situation.
Overall, egg sales dipped slightly in the early half of November, but layer inventories remained relatively stable.
Layer feed production and consumption were weaker in northern China as compared to southern China due to increased demand for feed concentrates.
Broiler rearing activities reaped good profits in the past two months. However, profits have been falling in November with slower economic growth in the country and higher broiler supplies.
Higher broiler inventories had given rise to an increase in broiler feed production and consumption, especially in northeast China and northern China.
The broiler duck industry remained weak and affected the overall growth of China's broiler bird industry.
Aquaculture rearing activities ended in northern China due to cold temperature while aquaculture rearing activities weakened in southern China. Lower aquaculture inventories resulted in weak demand for aqua feed.
Despite poor rearing profits, farmers will likely step up on replenishment soon as they prepare for animal releases prior to the Lunar New Year in end January next year. Hence, animal feed production and consumption will likely improve in the coming weeks.
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