Chicken and eggs have both increased in price. Can chicken companies raise their prices again?

Release time： 2024-08-16

【Summary Description】 In the first half of this year, companies in the chicken farming industry were very "lonely". Minhe Corporation and Xiantan Corporation reported losses ahead of schedule, while Shengnong Development expects a net profit decline of 80%. Data shows that the high point of broiler chicken prices in the first half of this year appeared in mid April, and then continued to decline, reaching a new low of 6.78 yuan/kg in mid June.

In the first half of this year, companies in the chicken farming industry were very "lonely". Minhe Corporation and Xiantan Corporation reported losses ahead of schedule, while Shengnong Development expects a net profit decline of 80%. Data shows that the high point of broiler chicken prices in the first half of this year appeared in mid April, and then continued to decline, reaching a new low of 6.78 yuan/kg in mid June.

After entering July, there have been reports of price increases for chicken and eggs. Are chicken farming companies expected to make profits in the second half of the year?

Data shows that in July, prices of various chicken products have increased.

 

Poultry companies end the first half of the year in a bleak manner

Both broiler and egg chicken companies ended up in a "desolate" state in the first half of the year. The losses of listed broiler companies have exceeded 10 million yuan, and leading companies Minhe Shares and Xiantan Shares have successively released performance forecasts for pre loss. The former is expected to lose 170 million to 195 million yuan in the first half of this year, while the latter is expected to lose 10 million to 18 million yuan.

The reporter called the Securities Department of Minhe Corporation, and the other party stated that the decline in terminal demand and low prices of chicken products have affected the company's profits. Xiantan Corporation also stated that the sales price of its chicken products has decreased compared to the same period last year, resulting in a decrease in the company's profits.

In the first half of this year, there were also broiler listed companies making profits. Shengnong Development expects the company to make a profit of 80 million to 120 million yuan in the first half of the year, but the net profit has decreased by 71.86% to 81.24% year-on-year. Shengnong Development stated that based on the company's current cost level calculations, the profit affected by the decline in chicken prices exceeded 1 billion yuan during the reporting period.

The days for egg laying chicken companies are also difficult. Xiaoming Shares, the first stock of laying hens, has not yet released its performance forecast for the first half of this year. However, the company's June sales report showed that the sales volume and revenue of its chicken products in the first half of this year decreased compared to last year, with a year-on-year decline of over 40% in June.

The dismal performance of broiler and egg chicken enterprises is related to the low interest rates on terminal product prices. In the first half of this year, the prices of broiler chickens and eggs were both declining. According to data from the agricultural product website of Shanghai Steel Union, a commodity analysis institution, the average price of broiler chickens (white feathered broiler chickens) nationwide in the first half of this year was 3.79 yuan/jin, a month on month decline of 3.07% and a year-on-year decline of 19.36%. According to the latest national CPI (Consumer Price Index) data released by the National Bureau of Statistics, egg prices fell by 7.1% year-on-year from January to June.

The prices of eggs and chicken have increased

It is worth mentioning that in July this year, there were news of price increases for chicken and eggs.

Since mid June, the price of raw chicken has bottomed out and rebounded, rising by 0.32 yuan/jin, or 9.41%, "said Zhu Pengliang, a chicken industry analyst at Shanghai Steel Union Agricultural Products Division, to reporters

The price of chicken is also rising. According to data from the agricultural product website of Shanghai Steel Union, as of July 16th, the prices of chicken products in Shandong, the main production area of broiler chickens, have all increased. Among them, the price of single frozen breast meat is 9.4 yuan/kg, an increase of 3.3%; The price of frozen chest is 8.45 yuan/kg, an increase of 1.81%; Da Feng Claw is priced at 38.5 yuan/kg, up 3.49%.

In July of this year, egg prices reached their highest point of the year.

The price of eggs has also recently reached its highest level since the beginning of this year. The reporter saw in some supermarkets in Beijing that the price of eggs has approached 10 yuan/kg. Wang Nana, an egg analyst at the Agricultural Products Division of Shanghai Steel Union, said, "Currently, egg prices have reached their highest point this year. As we enter July, the weather becomes hot, the egg production rate of laying hens in the main production areas decreases, the number of eliminated chickens increases, and the supply of eggs decreases. In addition, the current 'bullish sentiment' in the chicken egg market is strong. Egg sales have entered the peak season, and the possibility of egg prices decreasing in the future is unlikely

The reporter consulted with egg chicken farmers in Shandong, and one farmer said, "I was not optimistic about the egg market situation this year, so I did not increase the number of egg chicken farming. However, the current market situation is somewhat unexpected, and I am considering whether to increase the number of egg chicken farming

Wang Nana said, "Because the chicken cycle is fixed, even if farmers buy young laying hens now, it will take two to three months to produce eggs. If farmers buy chicken seedlings, the start of production will be at the end of the year. In the short term, there will not be a significant increase or decrease in egg supply, and it is recommended that farmers view the market situation rationally

Is it possible for chicken farming companies to turn losses into profits in the second half of the year

Affected by the rise in broiler prices, some broiler farmers have started to make profits.

Zhu Pengliang said that due to the rebound of raw chicken prices, the current broiler farming has just turned losses into profits, with an average profit of 0.43 yuan per broiler. Farmers have meager profits and are in a state of earning "hard-earned money".

Both Xiantan Shares and Minhe Shares believe that the broiler market will be better in the second half of the year than in the first half.

It should be noted that in the absence of clear prices for terminal products, companies in the chicken farming industry are still expanding against the trend. Minhe Corporation stated in its response to investors that the company's 800000 chicken breeding project is currently under construction and has already been partially put into operation. The construction work of the company's "Annual Incubation of 100 Million Commercial Chick Hatching Plant Construction Project" has been basically completed, and equipment installation, commissioning, and trial operation have begun.

Xiantan Corporation also stated in its response to investors that the slaughter and processing plant, feed plant, and 21 breeding farms supporting the construction of the first phase of the Zhucheng annual production of 120 million broiler chickens industry ecological project have been put into production, and the equipment for the second phase of the project is currently being installed. After the Zhucheng project is fully put into operation this year, the company's broiler slaughter capacity will reach 250 million to 270 million, and the meat processing capacity will reach 700000 tons.

Fu Guangming, Chairman of Shengnong Group, publicly stated that this year, all enterprises under the group must ensure a 20% growth in output value, profit, slaughter volume, and food.

The person in charge of the slaughter business of a domestic agricultural and animal husbandry listed company analyzed to reporters that the expansion funds of large-scale enterprises have been planned, and the expansion pace may be difficult to change in the short term. With the significant increase in chicken supply in the future, the breeding end will inevitably face a situation of "decreasing terminal product prices and reduced production capacity", and the profits of the breeding end may be difficult to recover significantly in the short term.