What are the reasons why broiler chicken prices will continue to fall?

Chilly times and a quiet market: chicken prices keep falling. This week, the comprehensive average price of the main broiler chicken products in the Zhejiang region was reported at 4.91 yuan/jin, down 5.6% week-on-week. The broiler chicken price curve has continued its downward trend; fast-growing categories and medium-quality male chickens, due to concentrated market releases within the region, saw price drops of more than 0.3 yuan/jin; while high-quality categories and silkie chickens, supported by seasonal consumption and basic mid-to-high-end consumption volumes, basically maintained a stable-to-slightly-declining pattern in both volume and price.

The following factors mainly affected the trend of chicken prices this week:

First, prices for fast-growing categories and medium-quality male chickens hovered around the cost line. Affected by rainy weather, sales in the main markets fluctuated greatly, and social smallholder farmers had a strong sentiment of releasing stock early. Prices often adjusted with volume, and the range of sales volume fluctuations determined price fluctuations.

Second, from the consumption side, due to factors such as the sharp drop in temperature and no obvious positive consumption factors, sales during the middle of the week continued to remain below the daily average planned volume level. In addition, affected by rainy weather, weekend consumption was also lukewarm. Therefore, support for this week's broiler chicken market lacked a sales volume foundation, so chicken prices this week maintained a low-level consolidation state.

Third, overall, in the recent period, both the inventory and market release volume of broiler chickens in the region have remained at relatively high levels. Combined with the impact of increased growth speed of broiler chickens in winter, this has generally presented a situation of supply exceeding demand. The amount of supply is what determines how long chicken prices will consolidate during this sluggish market period.

Broiler chicken prices will continue to fall in the future, mainly due to the following four reasons:

First, with the sharp drop in temperature, social smallholder farmers' psychology of accelerating market releases due to worries about increased disease risks in farming still remains dominant.

Second, consumption volumes in various places are sluggish, and short-term channels for diversion and methods for expanding volume are limited. Social smallholder farmers can only rely on taking the lead in cutting prices to move volume ahead of time.

Third, due to the homogeneity of the market, the prices of 817 broiler chickens and green-partridge broiler chickens for farmers and the market conditions of fast-growing category broiler chickens and medium-quality male broiler chickens for integrated farming companies are basically adjusted in sync. The speed and magnitude of price declines for medium- and low-grade broiler chickens will accelerate.

Fourth, because regional supply of silkie chickens and high-quality chickens is mainly concentrated in integrated farming companies, and these two types of products flow to mid-to-high-end hotels and household consumption, and because high-quality chickens and silkie chickens are still in the seasonal consumption peak season recently, prices are expected to remain weakly stable or stable with slight declines.

(Source: Xinmu Web)