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Lei Yi: Upstream companies may be the first to benefit from the reversal of the chicken cycle
2022-11-09 15:38:29 Sino-Singapore latitude and longitude
Sino-Singapore Jingwei, November 9th: Upstream companies may be the first to benefit from the reversal of the chicken cycle
Author Lei Yi, Chief Agricultural Analyst of Huachuang Securities
Under the highly pathogenic avian influenza epidemic, the overseas introduction of white-feather chickens is limited, and the domestic independent supply is still developing. The supply of Chinese ancestors' white-feather chickens may continue to be insufficient.
First, about 80% of China's white feather chickens are currently introduced from the United States. Affected by the avian influenza epidemic and air transportation, it is expected that the available supply states will be extremely limited under the background of the more serious epidemic spread in autumn and winter; New Zealand, where 16% of chickens are introduced, is difficult to make up for the lack of supply due to the disease of Aviagen breeds; thirdly, Europe, the backup source of introduction, is also affected by the avian flu epidemic, and the supply countries such as Poland and Spain have been banned by the Chinese customs. , it is estimated that it will take more than half a year to lift the closure; finally, the supply of domestic independent breeding "Shengze 901" and other varieties is limited, and the industrialization process of market promotion still takes time. In terms of transportation conditions for introduction, it is more difficult to arrange direct flights when flights are restricted due to the new crown pneumonia epidemic. The introduction of white-feather chickens is usually 1-day-old chicks. The time for transporting the seedlings to domestic farms should not exceed 72 hours, and the energy consumption of the chicks should also be avoided. In addition, the current breeder stock quality is poor, the supply elasticity of moulting is limited, and the phenomenon of supply shortage is more likely to occur.
From the perspective of cycle transmission, white-feathered broilers are similar to live pig breeding. They are both supply cycles. The starting point of the white-feathered broiler cycle is from the fluctuation of the replacement amount of grandparent chickens, and is transmitted to the chicken supply after at least 14 months through the production cycle. According to data from the China Animal Husbandry Association, since May 2022, with the impact of the avian influenza epidemic in the United States on the supply states of Aviagen and the restriction of flights between China and the United States under the influence of the new crown pneumonia epidemic, the introduction of Chinese grandparent chickens has suffered a lot. As a result, the number of introductions was zero for three consecutive months from May to July. Although introductions resumed in August, the number of introductions continued to hover at a low level due to the difficulty of flight matching and the continuation of the avian influenza epidemic. From January to September 2022, 680,000 sets were introduced and updated by self-propagation, a year-on-year decrease of 200,000 sets (-22.7%). We believe that, according to the rhythm of cycle transmission, after the Spring Festival in 2023, the parent-generation chick link may usher in a decline in volume and a rise in price, and then at the end of 2023 or enter a new cycle of upward phase, the current point of the long-term supply side inflection point is already looming. . Under the influence of force majeure factors such as the avian influenza epidemic and flight restrictions, it is expected that the introduction of restrictions will continue in the next few months. If the subsequent introductions continue to be lower than expected, the height and sustainability of the cycle are very worth looking forward to.
In the boom stage of the industry, the profit level of the grandparents and commercial chicks in the upstream of the industrial chain (representing the company's Yisheng Co., Ltd. and Minhe Co., Ltd.) is significantly higher than that of the downstream broiler breeding, slaughtering and processing and meat products processing. Representing the company Shengnong Development and Xiantan Shares). From the perspective of the cycle process, upstream companies are expected to benefit from the reversal of the chicken cycle first, and their stock prices will be more elastic. (Sino-Singapore Jingwei APP)
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