The Zhitong Finance App learned that Huachuang Securities released a research report saying that in the short term, the number of parent breeding chickens was updated at a high level of more than 8 million sets from September to October, with limited month-on-month decline, and the poultry breeding sector continued to lose money; the breeding base for ancestral chickens was high, and it took 14-18 months for the introduction of contraction to commodity distribution, and there was a long time lag in supply contraction. On the demand side, the cost of chicken seedlings is low and large-scale farms lose a lot of space, and farmers often maintain normal shelves to support the breeding plan; however, chicken prices lack upward momentum, breeding costs are still high due to high feed prices, and there is still a risk of losses on the breeding side. Strict control of breeding costs by farmers continues to suppress chicken seedlings prices. Taken together, supply contraction delays coexist with cost constraints, and short-term price inflection points still need to wait for the right moment. In the long run, continued losses in the industrial chain have forced parents to passively eliminate chicken breeders. The industry's production capacity is cleared in an orderly manner. Demand for superimposed poultry meat is growing steadily compared to other meats, and the supply and demand pattern is expected to gradually recover.
The main views of Huachuang Securities are as follows:
Chicken & Chicken Seedlings: The price of chicken fry continues to drop, and the price of chicken seedlings fluctuates and falls
Chicken prices continued to drop in September. The average monthly pre-shed transaction price was 2.99 yuan/kg. The overall price rebound during this month showed a trend of weak rebound and continued to bottom out at a low level. The main reason can be attributed to the abundant supply in the market, and the amount of chicken sold is high; at the same time, consumption of terminal meat products falls short of expectations, slaughter companies continue to bear high inventory pressure, and the pressure on chicken prices continues to weaken under pressure from both negative supply and demand factors. Overall, the increase in chicken source combined with weakening terminal demand that exceeded expectations and inventory backlogs for finished products jointly contributed to a sharp drop in the average price of chicken in September.
The price of chicken seedlings fluctuated and declined in September. In September, the average monthly price of white feather chicken seedlings was 1.66 yuan/feather. 1) Chicken prices continued to decline, with limited support for chicken seedlings; 2) There were serious losses on the breeding side, and the cost of controlling chicken seedlings was serious; 3) Poultry breeding enterprise plans, high feed costs, and the average price of chicken seedlings on the breeding side was 2.37 yuan/feather, down 33.5% year on year. The average price of commercial chicken surrogates from Minhe Co., Ltd. was 1.73 yuan/piece, down 46.4% year on year. The sluggish price generally put some pressure on the market. Under these circumstances, the enthusiasm of enterprises to fill in the list declined, acceptance of the parents' price of chicken seedlings decreased, and the willingness to bargain increased markedly during the procurement process.
Chicken: The price of white feather broiler decreased after a slight increase
In September, the national average price of white feather broiler was 6.11 yuan/kg, -12.59% year on month, -11.23% month on month; the average price of chicken products was 8,200 yuan/ton, -5.34% year on year, 4.18% month on month. Supply in the white feather broiler market continues to expand, inventory is high, demand follow-up is insufficient, and the industry as a whole shows a pattern of relative overcapacity.
The main varieties updated this month are: AA+, Lifeng, Kebao, and domestic varieties. Among them, AA+ varieties accounted for 22.62%; Lifeng varieties accounted for 5.95%; Kebao varieties accounted for 26.79%; and domestic varieties accounted for 44.64%.
Overall, the performance of the white feather broiler market was abnormal in September. The breeding side showed an upward trend of rebounding in the early stages. Prices remained stagnant in the middle of the month, there was no improvement in terminal sales, and the transmission of price increases was blocked due to inventory pressure. In late May, the price of chicken fell to a low level during the year. Breeding profit was -3 yuan/feather, down 201.51% year on year. Some enterprises on the incubation side changed from profit to loss. Profits decreased year on year, and losses of poultry breeding companies increased at the end of the month. Downstream consumption is not strong during the peak season, and the slaughters' book profits are being pressured by frozen products due to inventory losses.
Risk warning: The procurement cost of chicken seedlings declined in the early stages, but feed prices were high, the overall cost of breeding was still high, profit recovery for hairy chickens was weak, farmers strictly controlled the cost of harvesting seedlings, and continued to suppress the space above chicken seedlings