November 24, 2022

 

High grain prices shape Chinese poultry producers' feed usage in 2022

 
An eFeedLink Hot Topic

 

Since 2020, China's corn and soybean meal prices have increased to higher levels seen in recent times.

 

Corn prices account for the highest proportion of feed production costs. With soaring prices, corn usage dropped. Hence, the top 30 'pure' broiler feed manufacturers in China have corn inclusion rates significantly below the national average.

 

Soybean meal prices have strengthened since 2021, but the change in its inclusion rates in feeds was initially less dramatic due partially to a lack of substitutes. After soybean meal prices soared to a historical high in March 2022, broiler feed producers substantially reduced the soybean meal inclusion rates.

 

Eventually, as prices softened, feed producers increased the inclusion rates of soybean meal, with those rates returning to normal levels last July.

 

Chinese white feather broiler producers apply the traditional feed formula of corn-soybean meal combination, with little or no wheat substitution. Generally, soybean meal inclusion rates remain high for all types of white feather broiler feeds.

 

As for yellow feather broiler producers, major players like Wen's and Lihua had already replaced soybean meal with other substitutes. Other than wheat, Wen's inclusion rate of sorghum in 2021 reached 12%. According to Wen's, wheat, sorghum, corn and sunflower meal are used in broiler feed to replace a portion of soybean meal.

 

Lihua used more wheat in feeds last year, with its inclusion rate reaching as high as 35%, while that of soybean meal decreased to 9%.

 

Entering 2022, feed costs have accounted for more than 75% of the total cost of broiler production — an all-time high.

 

As the cost advantage of wheat gradually dissipated, the inclusion rate of corn returned to the normal level. Meanwhile, replacing soybean meal is difficult despite soaring prices.

 

- Shi Tao, eFeedLink