China's broiler chicken industry structure adjustment urgently needs deepening
Since the beginning of this year, the broiler chicken market has remained sluggish. Although there was a slight rebound before the National Day holiday, the purchase price of live broiler chickens in the main producing areas is currently mostly below 6 yuan per kg, still showing a relatively large decline compared with the same period in previous years. Industry insiders analyze that although broiler chicken prices have recently rebounded slightly, affected by weak consumption, the demand pull from the holiday is limited, and under the influence of multiple factors in the future, the market price is very likely to fluctuate at a low level.
Pre-holiday purchasing peak, market fluctuates at a low level
Since September, as the weather gradually cooled and the country entered the seasonal consumption peak season, with the support of consumption demand from the start of universities, and combined with the overlapping effect of concentrated purchasing for the Mid-Autumn Festival and National Day holidays, the broiler chicken market should have seen both purchasing and sales thriving. However, the current broiler chicken market continues to move in the opposite direction from the live pig market. Although it is in the consumption peak period, the overall market performance still remains volatile.
⟦NL> In fact, since last year the broiler chicken market has been showing a trend of sharp rises and falls. The sluggish live broiler chicken market has also led to cold willingness to restock broiler chicks, with prices plunging sharply, and the profits of related enterprises have therefore fallen significantly. After entering August, due to severe weather affecting broiler chicken sales, it became difficult to release broiler chickens from farms, causing broiler chicken prices to fluctuate upward to a certain extent.
Recent monitoring information shows that although the market is gradually entering the consumption peak season, the market remains sluggish. At the end of September, in order to avoid releasing chickens during the two holidays, broiler chicken release volume temporarily declined, supporting a rebound in live chicken prices. On September 30, the price of live chickens in the main broiler chicken producing areas returned to 6 yuan, with an average price of 6.07 yuan/kg, among which the highest price was 6.54 yuan/kg in Liaoning, and the lowest price was 5.9 yuan/kg in Henan and Jiangsu. Because live chicken prices are too low, the market is panicked, farmers have weak willingness to restock, and broiler chick prices have mostly bottomed out, with an average price of 0.55 yuan/bird. Affected by slow sales of chicken products from slaughterhouses, increased inventory pressure, and continuously declining selling prices, it is expected that there will be limited room for a large increase in live broiler chicken prices in the coming period.
Production capacity still excessive, market supply exceeds demand
In recent years, China's white-feathered broiler chicken industry has developed very rapidly, but rapid development has not brought prosperity to the industry. On the contrary, because market information, consumption conditions, and production capacity are not transparent, breeding poultry enterprises have blindly invested in introducing breeding stock and expanding, and farms and households have rushed in. Excessive production does not match market demand, leading to an imbalance between production and sales, and the market shows a situation of supply exceeding demand.
According to industry insiders, since 2009, China's imports of grandparent breeding chickens have continued to grow substantially, but in recent years China's poultry industry has frequently encountered unexpected setbacks. Since 2013, successive negative incidents such as “fast-grown chickens”, “H7N9 avian influenza”, and “Fuxi meat” have dealt serious shocks to the poultry industry, leading to a lack of consumer confidence, weak market conditions, and poor sales of breeding poultry and chicks. Many breeding poultry farms and slaughterhouses suffered losses, some enterprises faced operational difficulties or even went bankrupt, and the entire industry faced a crisis.
Facing this new situation, adjusting the industrial structure in 2014 became a consensus in the industry, and reducing the number of breeding chickens became inevitable. It is understood that 14 domestic grandparent chicken enterprises, including Yisheng Co., Ltd., signed the 2014 Grandparent Chicken Introduction Quota Agreement. On March 18, 2014, the White-Feathered Broiler Chicken Alliance reached a consensus that starting from April 1, grandparent breeding chickens must be culled at 50 weeks of age (Cobb 52 weeks), gradually reducing 20% of the total. However, the huge number of grandparent chickens in 2013 will still directly affect the stock of parent-generation chickens in 2014, thereby supporting commercial-generation chicks in 2015.
Another survey shows that although broiler chicken farming benefits are currently lower and more and more small and medium-sized farms and households are withdrawing, due to the entry of large enterprises, the total number of commercial-generation broiler chickens raised has not decreased. At present, broiler chicken inventory is still very large, and a price decline is unavoidable.
Consumer demand slowing, future outlook not optimistic
Industry insiders say that because macroeconomic growth has slowed since last year, downward pressure on the domestic real economy has continued to increase, and labor demand from industrial enterprises and general service industries has declined, leading to persistently weak consumer demand this year. In addition, to prevent avian influenza, some regions implemented temporary market closure systems and closed live poultry trading markets, affecting daily sales in the live poultry market. At the same time, affected by the impact of imported chicken products, there are still many variables in the future trend of the broiler chicken market.
In recent years, with population growth and the advancement of urbanization, China's meat consumption has increased to a certain extent, but the growth rate has been slow. Considering the proportion of poultry meat in meat consumption, it can be seen that over the past ten years the proportion of poultry meat output in total meat output has always hovered around 20%. From 2000 to 2013, the proportion of poultry meat output in total meat output rose by only 1.20 percentage points. It can be seen that the growth rate of poultry meat's share in meat consumption is not very fast, and some negative reports are not conducive to further increasing poultry meat consumption. Therefore, the white-feathered broiler chicken industry is still very restlessly keen on building large projects and expanding production capacity, which is actually not a good thing for the future development of the industry.
Moreover, under the circumstances of blind industry expansion and declining consumer demand, in recent years the state has relaxed chicken import policies. Chicken offal, which has no market abroad, is dumped into China in large quantities at low prices, while China's chicken production enterprises rely on the relatively high price of chicken offal to maintain certain profits. Therefore, affected by the impact of imported chicken products, the overall profits of slaughtering enterprises have declined, affecting the upstream broiler chicken purchase price.
Facing industry bottlenecks directly, adjustment is imperative
The poultry industry is closely related to the macroeconomy, and cyclical fluctuations in the macroeconomy will directly affect the consumption of poultry products. Therefore, industry practitioners must pay close attention to macroeconomic operations and policy direction in order to adjust production scale, make reasonable development plans, and make deepening industrial structure adjustment the top priority.
In recent years, although China's broiler chicken industry has developed rapidly, the importance of the industry has been underestimated. It is understood that at present the broiler chicken industry has not yet been included in the publicly released national statistical data list. For the media, the white-feathered broiler chicken industry is also a relatively unfamiliar industry. Because it has not used the media channel to improve industry transparency, lacks interaction with consumers, has not established a mutual trust mechanism with consumers, and the industry lacks crisis public relations and communication and publicity with the media. These are bottlenecks and shortcomings restricting the development of the industry, and the following measures urgently need to be taken to solve them.
Formulate industry development strategy and planning. The white-feathered broiler chicken industry needs to change the old path in which enterprises only focused on developing individually, leading to blind expansion and vicious competition. Special research should be organized to study the development strategy of the broiler chicken industry and formulate plans, so that leading enterprises can form a unified understanding of development prospects, speed, scale, direction, and so on.
Strengthen science popularization and publicity, guide healthy consumption, and safeguard the industry's legitimate rights and interests. The industry needs to actively interact with mass media and strengthen consumers' perception of the industry. Establish a crisis public relations mechanism to protect the industry from being harmed by public opinion when false statements damaging industry interests appear. By setting up visitation bases or education bases, continuously carry out long-term publicity of science popularization knowledge related to white-feathered broiler chickens, so that consumers have a scientific, objective, and true understanding of the white-feathered broiler chicken industry.
Vigorously promote exports, oppose smuggling, and regulate imports. Open international markets, promote China's chicken exports, and increase the international market share; at the same time, actively communicate with government departments, prohibit smuggling of chicken products, and adopt safeguard and remedial measures such as anti-dumping and countervailing measures against products that discriminate against China's exports and enter China's market through unfair competition, and actively regulate import behavior.
Further refine the evaluation system for scaling and standardization, and do a good job in the regional layout of industry development. In the future, clearer certification standards and evaluation systems should be introduced to guide the future development of the industry.
Industry insiders believe that if regulatory measures to promote a balance between production and sales in the broiler chicken industry can be implemented smoothly, the number of parent-generation breeding chickens will continue to decline in the second half of 2015, and the white-feathered broiler chicken commercial chicken market will show substantive improvement in 2016 due to reduced supply. At the same time, it is necessary to vigorously advocate “chilled fresh chicken” consumption and support enterprises in taking the deep-processing route, thereby further driving the orderly and normal development of the broiler chicken industry.