Temperatures have been rising fast in China - one to two degrees Celsius higher than normal in the first few weeks of April in many regions - with research firm JCI Shanghai saying this factor has eased market worries about the spread of spring bird flu and has helped boost poultry meat intake.
The agri-consultancy said human H7N9 (avian flu) cases decreased significantly last month - an additional factor behind growing consumer confidence in the poultry market.
Poultry consumption in the Guangdong region of China recovered to about 80 or 90% of the pre-H7N9 level, said the analysts.
There has also been a notable increase in live poultry trading in many regions, they added.
And prices for broiler, egg, chick and eliminated layer also steadily moved upward in the past few weeks, said the agriculture research firm.
All eyes now are on the recovery of poultry inventory levels and the effects of reserve purchasing on that livestock market.
And JCI Shanghai reports that the Chinese Ministry of Agriculture (MOA) recently published a plan to cultivate over 40 new broiler varieties in a bid to bolster growth in the poultry segment.
China's pork, beef, mutton and poultry meat production totaled 23.47 million MT in the first quarter of 2014, up 2% from a year earlier, shows data from China’s National Bureau of Statistics (NBS).
Amino acid price hikes
With poultry farming recovering, JCI Shanghai notes a slight rebound in the price of the feed additive, methionine, on the Chinese market.
The price for lysine in China will also rebound but not until the latter half of this year, arising out of the decision by leading producer, Global Biochem Technology, to scale down its lysine production this year by 200,000 tons, said Korean firm, Shinhan Investment and Securities.
Other lysine producers, notably Cheil Jedang, will also benefit from the predicted hike in sale prices as a result of the reduced inventory in the second half of the year, said Shinhan.
Chinese food security
Meanwhile, China is set to maintain a high rate of self-sufficiency in the production of major grains and thus realize its self-sufficiency target in the coming decade, according to an official report published on Sunday.
The report, China Agricultural Outlook 2014-23, published by the Agricultural Information Institute of the Chinese Academy of Agricultural Sciences, predicts that China's annual output of wheat, rice and corn will hit 578 million metric tons in 2023, helping to ensure food security for China in the next 10 years, reports China Daily.
Corn output will continue to grow by an average annual rate of 1.3%, reaching 247 million tons in 2023, said the report.
"The top priority in the future is to guarantee full self-sufficiency in wheat and rice,” said China’s Vice Minister of Agriculture, Chen Xiaohua, at the China Agricultural Outlook Conference in Beijing on Sunday.
Chen said government investment in agricultural technology and mechanization will further increase farm output in China.
Dirk Jan Kennes, an analyst with Rabobank, told FeedNavigator.com earlier this month that if China was to meet the additional feed grains tonnage output required to meet livestock consumption demand by 2023 through its own efforts, it would need to increase yields by 6.0 to 6.6 tons per hectare or sew an additional 2.5 million hectares.
The Chinese government, he said, has been trying to ensure 95 per cent self-sufficiency in grain production but indigenous output cannot catch up with increasing meat consumption.
There is a shortage of arable land in the country and a lack of farming infrastructure.
“China, with its shrinking land base, needs to focus on growing high value crops and livestock production. It has to look elsewhere for its corn and soy inputs,” said Kennes.
China’s farming industry, said the analyst, is characterized by an unsustainably high level of nitrogen fertilizer (N-fertilizer) usage, and inefficiently low crop uptake of fertilizer nutrients (N-uptake), said Kennes.
So imports of low-value grain from markets with better N-uptake and lower fertilizer input can supplement China’s domestic supply, said the analyst.
“Feed grain imports can significantly improve the efficiency of the pork value chain, for example. The input of N-fertilizer per unit of pork production in China is 3.5 times greater than in the US,” said the Rabobank specialist.