Reduction in China's Broiler Production in January, Decrease in Breeding Profits

In January 2025, the number of broilers shipped from farms in China decreased by 10.3% year-on-year, with meat production decreasing by 10.7% year-on-year, while inventory increased by 7.9% year-on-year.

The comprehensive income of the broiler industry in January was 0.99 yuan per bird, a decrease of 1.00 yuan per bird year-on-year; the prices of broilers at the production stage all fell. According to monitoring, the ex-farm price of white-feathered broilers was 7.56 yuan/kg, down 1.5% month-on-month, with a loss of 0.33 yuan per bird on the breeding side, which was 0.26 yuan less loss per bird than the previous month. The ex-farm price of yellow-feathered broilers was 14.37 yuan/kg, down 3.4% month-on-month, with a profit of 3.40 yuan per bird on the breeding side, which was 1.62 yuan less profit per bird than the previous month and below normal profit levels.

White-feathered Broilers: Seasonal Reduction in Production?

Overall, chicken supply remained relatively stable, with a quiet transaction in the consumer market, and prices were stable before the Spring Festival. Slaughterhouses ceased operations for about 8 days in January, with monthly slaughter volumes down 19.2% month-on-month and 13.2% year-on-year, with an actual daily slaughter volume of approximately 27.65 million birds, up 8.9% month-on-month and 17.0% year-on-year, with operating capacity at around 84.3%. As the Spring Festival approached, dealers had replenishment activities, but daily supplies increased, resulting in a generally quiet market with slightly falling prices. In terms of the finished broiler market, seasonal reductions in shipments led to slight declines in prices.

According to monitoring and analysis, shipments decreased by 19.2% month-on-month and 13.2% year-on-year in January, mainly due to the impact of slaughterhouse shutdowns during the Spring Festival holidays. Ex-factory prices fell by 1.5% month-on-month and 7.6% year-on-year. From the perspective of production turnover patterns, supply continued to grow. With the Spring Festival falling at the end of January 2025, slaughterhouses stopped operations for about 8 days in January and 6 days in February. Due to more cross-year chickens being raised this year, they will be concentrated in mid-February for shipment. From the market situation, the increase in output offset the incremental holiday consumption, leading to a quiet overall market transaction; slaughterhouses' daily output increased before the festival, and chicken prices were at recent lows, keeping pre-holiday chicken prices relatively stable. In terms of industry profits, the comprehensive income of the industry turned into a loss in January, while slaughterhouse profits increased.

Considering past trends, schools were on winter break in January 2025, but close to the Spring Festival, there was seasonal fluctuation in chicken consumption, and dealers adjusted their inventories accordingly. Overall, due to a large increase in cross-year chickens that will be concentrated for shipment in a short period, this could trigger a "waterfall-like" fall in finished broiler prices, leading to a chain reaction of declines in chick and chicken meat prices; it is predicted that the prices of chicks, finished broilers, and chicken meat will all operate at low levels from February to March 2025.

Yellow-feathered Broilers: Reduction in Shipments, Continued Decline in Broiler Prices?

In January, the number of yellow-feathered broilers shipped from farms decreased by 1.3% month-on-month and 2.6% year-on-year, at historical lows. The number of shipments by listed companies this month decreased by 9.8% month-on-month and 2.2% year-on-year. In terms of the finished broiler market, December to May is usually the off-season for yellow chicken consumption, but in previous years, finished broiler prices would have a small increase before the Spring Festival; however, this year, finished broiler prices maintained a slight downward trend, with an average monthly price of 14.37 yuan/kg, down 3.4% month-on-month and 10.8% year-on-year. The ex-factory selling prices of broilers by listed companies rose by 0.8% month-on-month and fell by 9.4% year-on-year. From the perspective of production turnover patterns, the inventory of laying breeder chickens and chick sales volumes were at historically low levels, with reduced utilization rates of breeder chicken capacity. In the medium term, the number of broilers shipped will remain at a low level of fluctuation, and due to the gradual reduction in early stocking, the number of shipments from February to March 2025 will continue to decline; from the market situation, current yellow chicken consumption has entered the off-season, and finished broiler market prices have maintained a slight downward trend; in terms of industry profits, profits on the breeding side have decreased and are below normal levels, while profits from parent breeder chicken farming have slightly increased; considering past trends, the first quarter is the off-season for broiler consumption, with declining prices, and a peak season for chick sales, with rising prices. Overall, within 1-2 months, both supply and demand declined, leading to a downward trend in broiler prices and an upward trend in chick prices.