Data from the NDRC for the first week of July: Pig farming has suffered losses for 8 consecutive weeks, while chicken farming has been in the red for 16 straight weeks.

According to statistics from the Poultry Division of the Animal Husbandry Association, the average selling price of parent-generation chicks in June was approximately 68.7 yuan per set, up 13.6% month-on-month compared to May. Profitability per set reached nearly 50 yuan, representing a 19.8% increase from the previous month. Chicken chick prices have dropped to their lowest level of the year, falling to 2.6 yuan per chick—up 20.6% year-on-year but down 39.7% from the previous month. As a result, profitability per chick has shifted from profit to loss. The July data is even more heartbreaking.

Raising pigs

The latest "Pig, Chicken, and Egg Feed Price Ratio for the First Week of July 2021," as disclosed on the website of the National Development and Reform Commission, shows that the national average ex-farm price for live pigs stood at 16.46 yuan/kg in the first week of July, representing a slight increase of 1.04% compared to the previous week. Since rising to this round's peak of 36.33 yuan/kg in the first week of January 2021, the recent trend of pork prices is as follows:

As shown in the chart above, pig prices in the 5th week of June experienced a rare, sharp V-shaped rebound compared to the 4th week of June, and continued to edge higher slightly in the 1st week of July.

Here is the chart showing the fluctuating trend of nationwide live pig prices since January 2019:

According to data calculated by the NDRC, this week the national pig-to-feed price ratio stood at 5.03, representing a week-on-week increase of 0.40%. Based on current prices and costs, the projected average loss per pig raised in the future is 575.52 yuan.

Expected profit trend per pig since January 2019:

The pig farming industry began experiencing projected losses starting in the third week of May, and by the first week of July, it had already logged eight consecutive weeks of anticipated deficits. After the loss margin narrowed somewhat during the fifth week of June, The loss widened again in the first week of July.

Post Revise The analysis suggests: Raising units are showing strong resistance to price cuts, making it difficult for slaughtering companies to lower their offers. As a result, hog prices in the southern and northern markets experienced slight fluctuations—either modest gains or minor declines—throughout the week. Consumer demand at the terminal level remains weak, and downstream sectors show limited acceptance of higher-priced products, putting constraints on sustained pork price increases. Market sentiment lacks sufficient short-term boosts, Pig prices are expected to rise next week before slightly declining afterward, while farming operations are likely to remain in a state of loss.

Raising chickens

In the first week of July, the national purchase price for broiler chickens at the farm gate was 7.77 yuan per kilogram, up 1.57% from the previous week.

Chicken price trends since January 2019:

According to data calculated by the NDRC, the national chicken-feed price ratio this week stood at 2.12, representing a week-on-week increase of 0.95%. Based on current prices and costs, the projected loss for broiler farming is 2.38 yuan per bird.

Here's the recent profit trend chart for broiler farming:

As shown in the figure above Since starting to lose money in the fourth week of March 2021, chicken farming has now suffered losses for 16 consecutive weeks, with the fifth week of June recording its largest-ever decline, and the first week of July continuing to see steep losses.

Expected profit trend per chicken since January 2019:

The NDRC analysis concludes: In the short term, the volume of broiler chickens being marketed remains low, while product sales in the market are likely to stay sluggish. Demand remains subdued, and chicken prices are expected to stabilize with a slight downward trend next week.

What’s the future outlook for the poultry industry?

According to standard calculations of broiler farming costs, chicks and feed each account for 20% and 60% of the total expenses, respectively. Although domestic prices of soybean meal and corn showed a volatile downward trend in June and July, the overall feed price decline was limited to a maximum of 2.67%, resulting in a relatively minor impact on the cost of raising each individual broiler. In contrast, the domestic chick market has experienced a sharp drop in prices—driven by fluctuating and declining broiler prices, coupled with ongoing losses in the industry. As a result, farmers have shown significantly less enthusiasm for restocking, leading to delays in order scheduling at chick hatcheries. Consequently, chick prices have continued to plummet from 4.29 yuan per bird in early June down to just 1.28 yuan per bird, marking a staggering 70.16% decrease.

Based on projections considering the broiler farming cycle and survival rates during rearing, domestic broiler farming costs are expected to decline from late July to early August, driven by simultaneous drops in chick prices and feed costs. By August, farming costs could fall to 3.50 yuan per jin, representing a month-on-month decrease of 14.09% but still a year-on-year increase of 1.78%.

For broiler farming operations, during the Sanfu period—aside from managing breeding costs effectively—they must also carefully choose the right time to market their birds, ensuring maximum profit potential. But what will the future hold for the broiler market?

From the supply side, although domestic chick prices fluctuated downward in June and July, according to monitoring data from Zhuochuang Information, weekly hatchery output among sampled companies steadily increased from 50.02 million chicks at the beginning of the month to 52.50 million, representing a regional rise of 4.96%. Meanwhile, cold-chain distribution remained stable. As a result, it is expected that the volume of commercial broiler chickens marketed in July and August will likely continue their upward trend.

From the demand perspective, universities are now on holiday, leading to a slight decline in group catering needs. Meanwhile, driven by persistently low pork prices, the market for broiler chicken products remains sluggish, with intermediate traders showing limited enthusiasm for purchasing. As a result, slaughterhouses are facing increasing pressure to offload their inventory, while farmers lack strong interest in selling live chickens. Consequently, the product market is likely to remain devoid of significant positive catalysts in the short term. However, demand may see a modest improvement toward the end of August, influenced by back-to-school season preparations. That said, overall domestic market demand during July and August is expected to remain weak. With both supply and demand factors weighing heavily on the market, Zhuochuang Information forecasts that domestic broiler chicken prices in July and August will likely trend slightly downward, with an average price drop of around 5.22% month-on-month in August.

In summary, the domestic broiler market remained sluggish throughout July and August. With rising temperatures during the Sanfu period, raising broilers has become more challenging. Therefore, farmers planning to sell their birds are advised to do so at higher prices when opportunities arise.

Source: West Rice Compiled by Yigu, Zhuochuang Information, and International Livestock Network