Fast-growing chicken scandal hits the poultry industry chain, chick prices fall to 2 jiao per bird

Farmers have no choice but to burn chicks, the "company + farmer" model is questioned, integrated farming is praised

The "fast-growing chicken" exposed by CCTV was like a hand grenade tossed into the white-feathered chicken industry, blowing feathers everywhere.

Reporters learned that in Shandong, white-feathered chick prices were 2.15 yuan-3.2 yuan per bird on the 17th. After CCTV reported on the "fast-growing chicken" that evening, prices fell immediately the next day, and by yesterday they had plunged to between 0.2 yuan-0.6 yuan per bird, a drop of more than 80 percent. Not only in Shandong, the shadow of the "fast-growing chicken" is spreading rapidly across the country. In Hubei, chick prices fell 70 percent, and sales of other chicken varieties also declined after being affected.

Some industry insiders suggested that in this incident, the root of the problem lies in the monitoring shortcomings of the "company + farmer" farming model, and that companies should vigorously develop "integrated" farming from field to table. Experts, however, believe that companies cannot be made to raise chickens themselves whenever something goes wrong, and that with China's current productivity level, this is still unattainable.

Staff reporter Zeng Qian

Intern Wang Ting

Industry hit, chick prices plummet

"No one dares to bring in chicks now. No one knows how long the impact will last this time." Liu Jingyu (pseudonym), an employee of a large livestock group in Hubei, told this newspaper that chicks are unsalable, with prices falling from 3 yuan per bird before the 17th to 0.9 yuan per bird yesterday, a plunge of 70 percent.

Liu Jingyu pessimistically predicted that chick prices will continue to fall in the future, because in Shandong, a major white-feathered chicken farming province, chick prices had already fallen to between 0.2-0.6 yuan per bird yesterday. "Shipping a chick from Shandong costs only 2-3 fen in freight. With Shandong selling them so cheaply, who would choose local chicks?" Because chicks must be delivered to farms for feeding within 48 hours of hatching, Liu Jingyu revealed that with chicks unable to be sold, some breeder farmers could only helplessly burn the newly hatched chicks.

It is not just the white-feathered chicken industry; the entire poultry industry has been affected. According to a chicken vendor at Guangbutun Market, business in the past week has been noticeably worse than the same period last year. A staff member in the broiler sales department of Wuhan Wens Co., Ltd. revealed that they mainly sell Guangxi black chickens, silkie chickens and other varieties, and sales volume has dropped from 30,000 birds per day a few days ago to 10,000 birds per day.

"From chick sales and broiler prices to market sales and consumer confidence, everything has been hit." However, Liu Jingyu believes that for the white-feathered chicken industry, this is not entirely a bad thing. "This will definitely eliminate many small companies with lax oversight, which is conducive to the restructuring and upgrading of the industry chain."

Does the "company + farmer" model have shortcomings?

Some industry insiders believe that the fundamental reason the white-feathered chicken industry is in trouble is the loss of oversight under the current "company + farmer" farming model. Liu Jingyu introduced that Hubei's "company + farmer" farming model has five unifications: "the company provides farmers with unified chicks, medicine, feed and technical services, and after the chickens are raised to a certain size, buys them back at a unified price." The advantage of this model is that through a large number of small-scale farmers, it can quickly expand scale and output at low cost in a short period. Its shortcoming lies in the difficulty of oversight.

According to a CCTV report, some chicken farms in Xiaochijiazhuang in Gaomi and Yuanjiazhuang in Pingdu violated rules on drug use, and then sold these chickens to the slaughterhouse of Liuhe Company in Cuijiaji Township, Pingdu, for slaughter. This problem was precisely caused by upstream farmers' illegal drug use, while Liuhe Group's oversight and testing were not carried out effectively.

Reporters learned that chickens raised under this model dominate the dining tables of Wuhan residents. Mr. Yi, head of the Nanhu Hongqi Live Poultry Wholesale Market, introduced that 80 percent of the chickens sold in the market come from Guangdong Wens Group. He estimated that Wuhan has 4 wholesale markets of a scale comparable to the Hongqi Live Poultry Wholesale Market, and Wens Group's chickens account for more than 50 percent of the share in these markets.

Farmers also favor this farming model. Mr. Xie, a farmer in Jiangxia, has cooperated with Guangdong Wens Group for 6 years. He introduced that raising 10,000 chickens requires more than 200,000 yuan in costs, whereas if cooperating with Wens, one only needs to pay a 30,000 yuan deposit, and Wens Group handles feed, chicks, medicine, sales and so on. When the market is good, one chicken can earn about 2 yuan. "Jiangxia has five or six hundred poultry farmers, of which four or five hundred cooperate with Wens Group."

Is the integrated industry chain model the way out?