December 16, 2020
Entering December, production of cured meats coupled with import restrictions raised Chinese meat demand. Keeping animals on-farm warm is a priority during the winter season. Respiratory diseases are at a seasonal high, and hopes for an African swine fever (ASF) vaccine continue.
The current strict control of frozen foods and cold storage facilities have impacted pork supplies (and other meat supplies). Following a gradual fall in recent months, swine prices are rebounding, and have risen to about RMB34 per kilogram. Many processing companies are shifting their purchases from frozen pork to fresh pork, leading to a tightening in fresh pork supplies. Pork prices are rebounding; in the past month prices have increased by about RMB8,000 per tonne, and retail prices have returned to a high of RMB50 per kilogram. The rise in pork prices are also driving up prices of chicken, beef and other meats.
Entering winter, the spread of COVID-19 is accelerating outside of China, and the outer packagings of imported livestock food products continue to test positive for the virus. The use of meat imports to stabilise market prices is now no longer an option. As pork consumption increases in the winter season, and due to December being seasonal for cured meat production, the domestic pork market is relying on fresh pork supplies, leading to a tightening in pork supplies. It can be expected that if there are no market intervention measures similarto import regulation and the release of pork reserves, live swine prices are very likely to rise in the short term. Considering that China's swine herd is still recovering, the current rise in prices should be seen as temporary, and coupled with expected transport disruptions in the northern regions due to rain and snow, producers are advised to maintain their number of market hogs.
Mycoplasmal pneumonia continues to persist on farms; vaccination only provides a certain level of effectiveness, so it is necessary to also take care of ventilation and temperature requirements to reduce disease incidence. Recently, blue-ear disease has been causing significant losses on some farms; the correct selection of vaccines is key in such cases.
While experts are saying that the elimination of ASF should not just rely on a vaccine, producers are finding it difficult to eradicate ASF on-farm through other means, and the hope of a vaccine remains the most promising option.
In December, egg supplies continued to tighten, and prices were on the high side, due to two main factors. One, transport in the northern regions were disrupted by rain and snow from a cold wave. Two, winter is the off-season for egg production. And as discarding of spent hens pick up pace and production declines, it is expected that egg prices should generally rise in the short term.
Due to the recent rise in swine prices, and COVID-19 restrictions on imported chicken, consumers are switching to domestic chicken, pushing up broiler prices. Also in winter, broiler growth slows and the growth cycle lengthens. As supplies decline during a peak consumption season end-of-year, it is expected that next January prices of white-feather broilers should strengthen.
As the scale of poultry production increases, which helps with production and environmental management, disease risks might also increase. For the control of highly infectious diseases such as Newcastle disease and avian influenza, which relies on biosecurity and vaccination, any increase in infection pressure or the start of new outbreaks might overwhelm bird immunity and lead to significant losses. For large poultry farms, an all-in-all-out system and disease elimination at its source are key.
3. Government policies
On November 16, the Ministry of Agriculture and Rural Affairs issued Announcement 356 which added three categories each to "Catalogue of feed ingredients" and "Catalogue of feed additives (2013)".
Separately, the new standard GB/T 5916-2020 for layer and broiler feed would be implemented from April 1, 2021.