Analysis and Forecast on China Livestock Industry (2015/2016)

By CnAgri 2015-12-28 14:59:15 Print Tel:861064402035 Email: [email protected]

Price: RMB 16000(English Version) RMB 12000(Chinese Version)

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Brief Introduction:

Basic Information:

Table of Contents:

Background
 
China’s national economic growth rate is predicted to be 6.9% and lower than the 7.4% of 2014. Under the influence of continuous economic slowdown and insufficient domestic demand, domestic resident’s consumption demand for middle and high grade mutton and beef declines further, but the influence on low price animal protein such as pork, poultry products, etc. is less.
 
The development features of hog, poultry and cattle & sheep industry in 2015 respectively are: 
 
1
Hog Industry
(1) Continuously decreasing capacity: it’s predicted that the inventory of reproductive sow is about 39 million heads at the end of this year. In 2014-2015, hog breeding was in a stage of “loss to heavy loss (that is the ratio between pig price and grain price is below 5:1)” for a long time, farmers started eliminating sows gradually, the year-on-year decrease rates of reproductive sow in 12 months all was about 10%, but the month-on-month decrease rate was dropped gradually.
 
(2) Scale degree is rising: the scale degree of hog breeding in China is rising continuously in 2015, the proportion of scale breeding (sow inventory is more than 50 heads) reaches 51%, increasing by 36.96% from 2003. The state still takes developing standardization breeding as an important measure of promoting modern hog industry; at the same time, scale breeding enterprises actively explore competitive breeding mode, such as “company + farmer” mode represented by WENS Group, factory farming mode of propagating and raising pigs by enterprises themselves, represented by Muyuan Foodstuff Co., Ltd.
 
(3) Pork supply slides down: it’s predicted that hog slaughter will be 655.45 million heads all year round; pork output will be 50.38 million tons, decreasing about 11% year on year.
 
(4) Industry prosperity rises again: the average purchase price of hog is about 15.34yuan/kg in 2015, the average profit of commercial pigs propagated and raised by enterprises themselves is 227.5 yuan/head, the average profit of fattening purchased piglets is 45.2 yuan/head. The capacity of reproductive sow in domestic is being reduced continuously, the fluctuation in supply end makes hog price rebounded in May, so the industry prosperity is higher.  
 
2
Poultry Industry
(1)  Overcapacity: it’s predicted the slaughter of professional broiler is 8.86 billion birds all year round, chicken output is 14.96 million tons, increasing by 0.76% year on year; the inventory of layer is 1.227 billion birds, egg output is 24.54 million tons, increasing by 4.87% year on year. Broiler and layer breeding in China both are in the stage of relative overcapacity and industrial integration.
 
(2)  Rise of scale degree: with the rising of labor cost, improving of environmental requirement and changing of consumption pattern, the degree of scale farming is rising. It’s predicted that the scale degree of broiler breeding (fattening more than 2000 broilers) will reach 96% and the scale degree of layer breeding (more than 10,000 birds) will reach 37% in 2015.
 
(3)  Losses of white feather broiler breeding: in 2015 oversupply and price drop of broiler make white feather broiler breeding link suffered a loss of 1.59yuan/bird, Sunner Development, Minhe Animal Husbandry Co., Ltd., Yisheng Livestock & Poultry Breeding Co., Ltd. etc. slipped into the red. 
 
3
Cattle and Sheep Industry
(1)  Production situation hasn’t changed: it’s predicted that the annual output of beef and mutton respectively will be 5.3 million tons and 3.9 million tons, decreasing by 0.53% and 1.02% year on year separately. Domestic cattle and sheep breeding still is dominated by retail breeders, however, retail farmers accelerate exit in recent years, while scale farms are short of power to speed up, so the production of beef and mutton decreases further. The situation of cattle industry is severer, the inventory of reproductive cow is less than 20 million heads, the short of cattle source and forage grass resource makes cattle industry lack development power.
 
(2)  Sluggish consumption demand: under the influence of macro-economy slowdown, domestic residents' purchasing power drops, at the same time, the prices of domestic beef and mutton are 2.5 times of pork and 3.2 times of broiler, so low prices of pork and chicken make their substitutability increased and domestic beef and mutton consumption decline to some extent.
 
(3)  The industry needs urgent transition: “differentiation” industrial model is the long-term development direction. Combining China’s special resource condition and international trade impact, it will be the main industrial model of stabilizing the development and supply of China’s cattle and sheep industry that never pursuing scale effect of inventory blindly, persisting in basically fixed inventory of reproductive cow/sheep, completing “petty bourgeoisie” whole industry chain pattern of propagating and raising cattle and sheep by farms themselves and positioning in middle and high-grade chilled fresh beef and mutton market.
China’s growth rate of GDP is predicted to be slowed down to 6.5% in 2016, and animal protein food demand will be stable mainly. In the future, China’s animal husbandry will be in a critical period of transformation and upgrading, the integration of upstream and downstream of the industry chain will be accelerated, agricultural internet will develop to producer service mode from traditional consumer e-commerce mode, and the service industry of producers will become a new investment hot spot.
 
BOABC believe that this report will provide important decision-making base for domestic and foreign livestock products traders and manufacturers, feed producers and traders, vaccine and equipment manufacturers and agricultural investment organizations; meanwhile, it’s an importance reference for industry association, research institution, etc. 
 
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