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Why Doesn’t Feed Companies’ Investment Binge in Farming Cool Down?

China Agriculture Report By CnAgri2017-11-13 13:49:15China Agriculture Report Print Since 2017, hog and meat poultry farming margins both have showed the decreasing trends and been obviously less than that in the same period of last year. However, feed companies’ investment binge in farming doesn’t cool down, and CP, Hope, Zhengbang, Dabeinong, Twins Group, Tangrenshen and Aonong all increase investment in hog integration projects instead. BOABC thinks the main reasons are as the follows: 
First, judging from developmental trends of feed-farming industrial chain, along with the upgrading of structure of farming entities, feed sector would be gradually becoming work shops for farming. If they are unable to control the downstream and are only engaged in feed sales, their market shares will be gradually shrinking. So, investing in integration projects is to seize market shares and achieve a sustainable growth in feed business.  
Second, along with increasingly strict requirements from environment and the exiting of small and medium-sized farm households in massive, hog farming has maintained high profits for a long time. Feed groups’ investment in hog integration also aims at gaining the profits from hog farming.  
Third, “company + farm household” is the anti-poverty model promoted by the governments in many property-stricken areas. Government’s encouragement and support such as land and policy preferential to investors are the important reasons for feed companies’ investment.  
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