Chicken prices rise, poultry farming industry outlook improves

The recent rise in day-old chick prices has finally driven up terminal chicken prices, and the share prices of poultry farming companies such as Yisheng Shares (10.10, -0.18, -1.75%) and Minhe Shares (11.80, -0.03, -0.25%) have also become increasingly active. Market participants expect that as the poultry farming industry's prosperity continues to rise, the profitability of related companies will improve noticeably.

According to monitoring by Shanghai Securities News Information, the average price of day-old chicks in major producing areas nationwide rose sharply within the past week, with day-old chick prices in all major producing areas breaking upward through 1 yuan per chick. On August 16, the latest average price of day-old chicks in major producing areas nationwide reached 1.19 yuan per chick, up 125% week-on-week, among which Shandong recorded the highest latest average price of day-old chicks, reaching 1.34 yuan per chick. It is worth noting that chicken prices have also begun to rise steadily in recent days, up 3.3% from the previous week, indicating that terminal consumer demand is indeed gradually recovering. The rise in both day-old chick and chicken prices is mainly due to the approach of the seasonal peak season for chicken consumption in September and October, as well as the start of school in September for primary and secondary schools and universities; on the one hand, farmers are enthusiastic about restocking, and on the other hand, food processing enterprises and wholesale markets have begun stocking up in advance.

Analysts pointed out that after a series of incidents and the impact of the epidemic lasting nearly half a year, capacity reduction in the poultry farming industry has been fairly obvious, while chicken inventories at slaughterhouses, wholesale markets and other channels have also undergone several consecutive months of drawdown; and as the consumption peak season of the Mid-Autumn Festival and National Day holidays approaches, slaughtering, wholesale and other channels are actively purchasing and stocking up. Recently, not only have day-old chick prices risen sharply, but terminal chicken prices have also begun to rise, which is a signal that the supply-demand pattern has clearly improved. Although broiler prices are still at the cost line, they have begun to fluctuate upward, and a cyclical improvement in the poultry farming industry is fairly certain. (Data Research Department, Gao Zhigang)