JIAXIANG, China (Reuters) – On a 30 hectare piece of land (74 acres) in Shandong province of China's poultry hub, more than half a million white crab ducks are busy eating, talking and laying eggs for cheap meat production for the thousands of canteens factory.
Drinking water ducks at a farm in Jiaxiang county, in Shandong province, China, July 16, 2019. Picture taken July 16, 2019. REUTERS / Jason Lee
With birds already packed in about 60 open-ended buildings, Shenghe Group, the farm owner, is expanding further, with the aim of increasing output by 30% this year to capture record profits as the farm decreases. pork pigmeat production, the favorite meat in China.
“Market prospects are now very good due to African swine fever,” said Shenghe Chairman Wang Shuhong, who sells about 300,000 ducks a day for fattening and killing.
More than a quarter of the pig herd in China has already been reduced by pork disease, according to official data. It is estimated that as many as half of the country's breeding sows died or were killed to deal with disease outbreaks.
Pig production will fall by 30% or about 16 million tonnes, according to analysts by Rabobank, the Dutch lender, pushing prices for new records and leaving a shaving hole in the country's protein supply.
Demand for poultry meat has already increased due to higher pork prices – up to 35% per annum. Chicken breast is about 20% more expensive than a year ago, and almost twice the duck breast to 14,600 yuan (1,707 pounds) tons, according to Shenghe.
This is only about half the cost of pork yet, but the prices are unexpected in China, as the breast is usually the cheapest part of the bird.
Around 80% of the world's ducks are raised in China, but traditionally they are eaten in the south, as fried duck languages, braised legs and interesting duck neck are common snacks, and duck intestines are a hot pot.
In recent years, however, more ducks have been processed for use by cost-conscious catering firms, providing large canteens feeding schools, factories, businesses and the army.
These buyers are now changing as much expensive pigmeat as they can duck.
A procurement manager with a catering company providing around 100 large clients across China said that around 20% -30% of pigmeat is replaced by chicken or duck meat. He refused to be recognized because of the sensitivity of the question.
“We can change more. But our concern is that the price of poultry is also going up, ”he said.
Price is about 6 yuan, which is three times more than normal level, from the beginning of July last year at the price of duck birds, sold by farms like Shenghe.
The prices eased last month when farmers departed from restocking during hot summer weather, but they are rising again and going to go higher, said Dong Xiaobo, general manager of the company. French genetics Orvia, supplier No.2 ducks breeding.
Orvia is sold out six months ahead and there are calls from pig farmers thinking of raising ducks after they have lost their pigs to African swine fever.
“I have never seen this in the 10 years of this market,” said Dong.
MONTH CRISIS, BLACK DESIGN
As pig fever continues to spread, Hu Chunhua, vice-principal of China, has encouraged poultry farmers to fill the protein gap to maintain social and economic stability.
The analysts warn that the disease may meet several farms more than once, and the Fitch pork output ratings agency will remain below 2018 through 2021.
With an output of about 5 million tonnes last year, duck meat has plenty of space less than half of China's chicken production.
The lower entry barrier for ducks than broiler chickens and breeding stock is more available, Pan Chenjun, senior analyst at Rabobank said.
Foul chicken farmers rely entirely on imported breeding stock, which is restricted by Chinese prohibitions on imports from key markets due to avian influenza outbreaks. Output could be less than 5% this year, Pan said.
Any rapid expansion has risks. In closely stocked farms, diseases such as bird flu, easily spread some strains in China.
And it has always been seen that duck farmers can hold a larger share of the meat market when pork output comes back.
Duck farmers were entered into the industry in 2012 between 2016 and 2016 when too many profit products eased, and most people than any other meat still need more pigmeat dishes, said the catering company manager.
But Wang Shenghe, who is planning to expand with a slaughterhouse later this year, is not worried.
“Pork output will not go up over the next three years and it will take at least five years to achieve,” he said.
Reporting by Dominique Patton; edited by Richard Pullin
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