GuShiio.com ① Recently, the price of white feather broilers and hairy chickens in some areas of Shandong dropped to 10 yuan and 4 kilograms, hitting a new low in nearly five years, causing heavy losses to farmers;
② The industry believes that short-term oversupply and slaughterhouses taking the opportunity to “cut leeks” are the main reasons for the sharp decline in chicken prices.
Cailian News, February 11 (Reporter Xiao Lianghua)On the 11th, when Nanfeng, an animal protection practitioner, communicated with a customer, he learned that the customer’s New Year white chickens were being sold, and he asked about the price of the chickens.
“Don’t ask about the price, you will be confused.” The customer’s mood was a little broken.
This is the general mood of white chicken practitioners after the festival. Whether it is the price of chicken seedlings or chicken, both have shown a downward trend. The person in charge of a poultry company in Weifang told the Financial Union reporter that such a market has caused panic among farmers, and now many farmers dare not serve chickens.
The long-term downturn in the market, combined with the extreme market conditions at the beginning of the Year of the Snake, has scared off many farmers. A reporter from the Financial Union contacted many white chicken practitioners, all of whom said that the industry was “unstable and difficult to make money” and wanted to withdraw or had already withdrawn from the white chicken breeding industry.
Li Cunrui, a farmer in Heze, believes that by improving the level of chicken raising and reducing costs, he can still survive in the future. “The price of chicken before the 15th day of the first lunar month is unstable, and there is a high probability that it will rebound after the holiday. The current low seedling price is an opportunity.”
At the level of listed companies, they were also slightly surprised by the trend of the white chicken industry chain after the holiday. “The relevant person in charge of a white chicken listed company in Shandong said that consumption is still weaker than expected and the general environment cannot be changed. What the company can do is to raise chickens well and improve cost control capabilities. Shengnong Development (002299.SZ) and Chunxue Food (605567.SH) strive to promote their products to go abroad and seize the international market.
“Profits in overseas markets are higher and the growth rate is better.” The relevant person in charge of Chunxue Food introduced.
“Don’t ask about the price of chicken, you will be confused.”
Before the Spring Festival, the price in front of the chicken shed in Shandong was around 3.5 yuan/catty. In the past one or two months, the price of chicken hit a high of 3.8 yuan/catty for the year. According to data from Bird News Network, on February 11, the “pre-shed price” of social chickens in Shandong continued to weaken and fall from the unified quotation on the previous day. Quotes in various regions were chaotic, and the actual mainstream quotation in the production area was in the range of 2.50-2.60 yuan/catty.
“I worked hard to raise a crop of New Year’s chickens, but I lost more than 100,000 yuan.” Mr. Wang, a white feather chicken farmer in Shandong Province, told a reporter from the Financial Union that before the Spring Festival, he saw the ravages of bird flu abroad and domestic chicken diseases were frequent. He expected that chickens would have a good market for the New Year’s Eve, so 50,000 chickens were sold. As a result, the price of hairy chickens fell sharply after the holiday.
“The price of chickens sold a few days ago was only 2.8 yuan/catty.” Mr. Wang felt in a trance. He remembered that the lowest price for hairy chicken in recent years was 3.4 yuan/catty. “The cost of medication for this crop of chickens has increased, and the price of feed has increased. Who would have imagined that after a holiday, a pound of chicken has dropped by 70 cents, and a chicken has dropped by 4 yuan. We could have earned 2 yuan, but now we have to lose 2 yuan.”
The person in charge of the Weifang poultry breeding company told the Financial Union reporter,”In the past few days, the purchase price of hairy chickens in some areas of Shandong has dropped to 10 yuan and 4 kilograms, the lowest in nearly five years.” The price of chicken seedlings has also plummeted along the way. At present, some small factories have dropped to 30 cents per bird, less than one-tenth of the price before the Spring Festival. They even send chicken seedlings for a small amount of freight, causing the entire industrial chain to wail.
According to statistics from Mysteel agricultural products, after the Spring Festival, from February 1 to February 11, the actual average transaction price of chicken seedlings dropped from 2.24 yuan/feather to 1.65 yuan/feather, a decrease of 26.34%.
Some farmers even told reporters that seedlings from small factories in Shandong dropped to 30 cents each, almost for nothing. “Just pay for some freight.”
Oversupply or slaughtering and cutting leeks
In response to the market, Cheng Jing, a chicken analyst at Shanghai Steel Alliance Agricultural Products Division, concluded that after the beginning of the New Year, companies have sufficient plans and excessive sales in various places. With Shandong producing areas as the representative, there are still early sales caused by chicken diseases. In addition, all links are bearish on the market outlook, the breeding side intends to speed up the market, and the factory side is difficult to open and control the volume, which also exacerbates the supply contradiction.
In terms of chicken seedlings, Cheng Jing said that the number of chicken seedlings emerging increased significantly after the holiday, the overall supply was oversupplied, the price of chicken dropped sharply, and the number of temporary plans for chicken seedlings increased. At the current price, farmers have suffered deep losses and are not motivated to make up for the stalls. In addition, the increase in feed prices and the increase in breeding costs have curbed the sentiment of breeding.
However, judging from the price of white chicken frozen products, although the prices of many products have also been lowered after the holiday, the reduction is very small and is completely disproportionate to the decline in the price of white chicken. For example, the price per catty dropped by 1 cent after the release of single frozen fur breast, and the price of frozen chicken wings and chicken feet dropped slightly from a month ago.
“This year’s market trend for hairy chicken is very similar to the first month of 2017 and 2020. The price of hairy chicken even dropped to 1.5 yuan/catty in those times.” Industry insider Xu Gaofeng said that from the Spring Festival to the 20th of the first lunar month, the slaughterhouse was completely under construction, and the supply and demand of hairy chickens were structurally unbalanced. The slaughterhouse took the opportunity to light up the butcher knife to the farmers and harvest crazily.
Li Cunrui deeply agreed. “Now ten farmers sell them to a slaughterhouse that has started operation. After the 15th day of the first month, the slaughterhouse’s resumption rate will reach 90%. By then, ten slaughterhouses will rob these ten farmers. The price of chicken may get better.”
However, judging from data from all parties, there is limited room for rebound. Weak downstream demand and poor shipments of segmented frozen products restrict the height of the rebound. According to statistics from Shanghai Steel Union, Shandong’s overall inventory is at a high level, and the Northeast’s inventory level is at a medium to high level, and both are in a state of rising inventories.
Violent de-production capacity starts?
Without making money or even deep losses, some farmers were forced to withdraw from this industry.
Recently, a reporter from the Financial Union contacted a number of white chicken practitioners, and all of them said that they no longer serve chickens or were about to withdraw from the breeding industry. “Money is not easy to make, the market is sluggish, we don’t catch up with eating meat, and we don’t miss being beaten” are the main reasons.
At the poultry breeding end, production capacity is also cleared. An interview with a reporter from the Financial Union News Agency learned that there are now situations of raw eggs being extracted and seedlings being destroyed in the market. Some observers even said that there may be situations where eggs are transformed into commercial eggs.
In addition, poultry breeding companies are currently beginning to search for chickens, and the phenomenon of de-production capacity is beginning to show signs, and the number of chickens searched is increasing. However, the age of chickens searched is more than 60 weeks and those that have passed the peak molting, and there are few within 60 weeks.
There are also farmers who can still find living space by improving breeding techniques and looking for differentiated sales. Li Cunrui said that he has been engaged in white chicken breeding for five years and his current profits are still good. “A batch of chickens went to the live poultry wholesale market last year, and the price was okay. Now this batch of chickens has been kept for 25 days. There is a high probability that the price of hairy chickens will not be so low when they are sold out.”
He said that the general environment of white chickens has been depressed for many years, and as a practitioner, he can only adapt to it. “Try to improve the level of breeding, reduce costs, increase survival rates, and choose the appropriate time to feed chickens, so that individual investors can still survive. For example, the price of chicken seedlings is very cheap now. Even if the feed increases a little, the cost will not be too high. Now that chickens are served, the possibility of making a profit is still very high.”
What is the explanation for the downturn?
In the current environment, large-scale enterprises have certain advantages, but they also need to enhance their competitiveness in multiple dimensions such as cost and market.
Wang Xiaoliang, head of white chicken breeding at a base in Weifang, a large-scale breeding group of Shannong, said that in the current white chicken breeding industry, in addition to the increase in chicken diseases, there is also a negative impact of tariffs on feed price increases. “Fortunately, raw materials for large companies are futures orders, which will not affect the downstream costs of the entire industry chain in the short term.”
Shengnong Development (002299.SZ) Since 2024, it has continued to promote the iteration of Chinese chickens and reduce the feed-to-meat ratio, thereby reducing breeding costs. “At present, there is still a certain gap between domestic commercial chicken seedlings and imported varieties in terms of feed-to-meat ratio. Therefore, if Shengnong, who uses all self-produced chicken seedlings, can improve the feed-to-meat ratio by a point, the cost will be reduced. It is very obvious.” An industry insider disclosed to a reporter from the Financial Union.
On the market side, unlike the domestic oversupply, Japan and South Korea have recently been plagued by avian influenza. There is even “no chicken to roast” in their country. There is strong demand for white chicken products and high profits, which has become the focus of companies in the industry.
“Export business in markets such as Japan and South Korea has maintained its growth trend since last year.” The relevant person in charge of Chunxue Food told the Financial Union reporter that the company will continue to make efforts in overseas markets and is expected to export volume in 2024 to reach 50,000 tons, a year-on-year growth rate of about 40%.
Zheng Jun, the company’s general manager, previously stated that the gross profit margin of sales in overseas markets is about 20%, which is higher than the domestic market. At present, the company has successfully passed EU registration and certification and is actively expanding the European market. At the same time, the company is also striving to obtain export qualification certification from relevant countries in Southeast Asian markets, with a view to quickly developing export business in these markets.
Shengnong Development, on the other hand, actively promotes going to sea on both the poultry breeding and product sides. Public information shows that the company’s breeding chickens have been exported to many countries in Africa.
Customs data shows that in December 2024, China’s chicken exports volume was 78,500 tons, a month-on-month increase of 0.60%, and a year-on-year increase of 41.90%. In 2024, China’s chicken exports totaled 770,300 tons, a year-on-year increase of 39.02%.
