China pushes chicken expansion despite safety and other issues
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Beijing — China’s chicken producers are pushing ahead with aggressive expansion plans despite a slump in demand due to the coronavirus, reducing reliance on imports amid recent fears about the safety of foreign meat.
The world’s number two poultry producer is expected to produce a record 14.85-million tonnes of chicken meat in 2020, according to the US department of agriculture, a substantial increase over 2019’s 18% rise to 13.75-million tonnes.
The significant expansion is boosting demand for key feed grains like corn and soybeans, traders in China say, while pushing down poultry prices.
It could also mean smaller purchases of imported frozen chicken just as consumer confidence in imported food takes a hit. Last week, chicken wings from Brazil tested positive for the coronavirus.
“Currently the price is so low. I don't think it's just weak demand but it’s also the sufficient supply,” said Pan Chenjun, senior analyst at Rabobank.
Pork push
China slaughtered 9.3-billion chickens in 2019, including 4.4-billion white-feathered broilers, favoured by fast-food chains for cheap, plump meat.
Industry leaders such as Liaoning Wellhope Agri-Tech, Yum China KFC-supplier Fujian Sunner Development and Thailand's CP already had expansion plans to meet Beijing's goal for more integrated food production.
But some accelerated those projects after profits soared in 2019 alongside the plunge in pork output. With consumers and restaurants seeking substitutes, chicken prices hit record highs.
Wellhope increased chicken production by 36% in 2019, and by a similar pace in the first half of 2020, company filings showed.
“We sped up because of the better prices,” said Jan Cortenbach, chief technical officer at Wellhope-De Heus Animal Nutrition, a joint venture.
New housing for at least one-billion more chickens is now in the works, said Walter Benz, president and MD of China at Big Dutchman Group, a German company that supplies equipment for poultry.
They include a 100 million-bird farm and slaughter project by Shandong Xiantan and two 100 million-bird projects by top Chinese pork processor, the WH Group-owned Henan Shuanghui Investment and Development Co Ltd, due for completion by the end of 2021 and June 2022 respectively.
Shandong Fengxiang Co raised funds in a public share offering in July to finance a doubling of output from 101-million birds.
Covid-19 risk
The rapid expansion may have been ill-timed, as the Covid-19 epidemic pummelled China's chicken demand. A large portion of chicken meat, cheaper than pork, is consumed in school canteens, which ...
The world’s number two poultry producer is expected to produce a record 14.85-million tonnes of chicken meat in 2020, according to the US department of agriculture, a substantial increase over 2019’s 18% rise to 13.75-million tonnes.
The significant expansion is boosting demand for key feed grains like corn and soybeans, traders in China say, while pushing down poultry prices.
It could also mean smaller purchases of imported frozen chicken just as consumer confidence in imported food takes a hit. Last week, chicken wings from Brazil tested positive for the coronavirus.
“Currently the price is so low. I don't think it's just weak demand but it’s also the sufficient supply,” said Pan Chenjun, senior analyst at Rabobank.
Pork push
China slaughtered 9.3-billion chickens in 2019, including 4.4-billion white-feathered broilers, favoured by fast-food chains for cheap, plump meat.
Industry leaders such as Liaoning Wellhope Agri-Tech, Yum China KFC-supplier Fujian Sunner Development and Thailand's CP already had expansion plans to meet Beijing's goal for more integrated food production.
But some accelerated those projects after profits soared in 2019 alongside the plunge in pork output. With consumers and restaurants seeking substitutes, chicken prices hit record highs.
Wellhope increased chicken production by 36% in 2019, and by a similar pace in the first half of 2020, company filings showed.
“We sped up because of the better prices,” said Jan Cortenbach, chief technical officer at Wellhope-De Heus Animal Nutrition, a joint venture.
New housing for at least one-billion more chickens is now in the works, said Walter Benz, president and MD of China at Big Dutchman Group, a German company that supplies equipment for poultry.
They include a 100 million-bird farm and slaughter project by Shandong Xiantan and two 100 million-bird projects by top Chinese pork processor, the WH Group-owned Henan Shuanghui Investment and Development Co Ltd, due for completion by the end of 2021 and June 2022 respectively.
Shandong Fengxiang Co raised funds in a public share offering in July to finance a doubling of output from 101-million birds.
Covid-19 risk
The rapid expansion may have been ill-timed, as the Covid-19 epidemic pummelled China's chicken demand. A large portion of chicken meat, cheaper than pork, is consumed in school canteens, which ...
