China: Modest Gains in Broiler Production Forecast for 2011.
The report said strong demand for local chicken is offsetting continued high feed costs and encouraging producers to expand placements. The report added: "Reduced imports from the United States following the implementation of anti-dumping duties in February 2010 are also helping to boost local prices. Wholesale broiler prices in September 2010 topped 13 yuan ($1.93) per kilogram, well above prices at the same time in 2009 and 2008."
In addition, the report said that reduced outbreaks of highly pathogenic avian influenza (HPAI) in 2010 are another factor helping the Chinese broiler industry maintain steady production growth. The report added: "Meanwhile, minimum volumes for contracted household farms are also reportedly rising, in some cases to more than 5,000 birds per delivery. Previously, household farms could obtain contracts with only 2,000 birds per delivery. This has encouraged small operators to improve their production capacity and facilities."
Nevertheless, the report went on to say that while improving scale economies and integration is improving competitiveness, Chinese operators continue to be challenged by high feed costs, which continued to climb in 2010. The report added: "Prices for corn, which accounts for 55-60 percent of broiler feed, from January through June jumped 25 percent from the same period the year before to RMB1,970 ($291) per metric ton (MT). Overall, broiler feed prices in 2010 have risen to RMB 2,887 ($423) per metric ton through June, up 7 percent from the same six-month period last year."
Analysts forecast China's total broiler meat consumption in 2011 will rise three percent to nearly 13.3 MMT, following a two percent increase in the previous year. This will boost Chinese per capita broiler consumption to a record 10 kilograms.
The report said: "Continued demand gains are bolstered by the low cost of broiler meat compared to pork and beef. The efficient feed-gain ratio for broilers reduces production costs and helps keep chicken prices low. Chicken claws, wings, and legs account for the vast majority of Chinese retail chicken sales."