The profits in hog breeding have started to enlarge since June, and even hit a multi-year high following an increase in hog prices. As of July 15th, breeding margins for purchased hog were 1701.38 CNY/head, a huge rise of 1208.615 CNY/head or 245.27% compared to 492.765 CNY/head in the corresponding period last year. Local governments have introduced generous subsidies to this sector, which will also make it remain very profitable. Major enterprises are replenishing stocks with support of sufficient funds and favorable policies. Both hog and sow stocks are extending an uptrend in June, of which sow stocks have seen an increase for ten straight months. In addition, farmers are bolstered to make replenishment of soybean meal and corn due to their rising prices, pushing for an increase in hog feed production.

But egg prices remain weak at a low level in June. Farmers have been at a loss for nearly six months and some of them have also replaced in advance the layers at the age of 400 days. Moreover, as the weather in getting hotter and hotter in June, farmers become more cautious in making replenishment, leading to a decline in June stocks. Besides, the terminal consumption of broilers is also poor. The shipments of chicks are at a slow pace across the country. All together cause a decline in the demand for poultry feed.

June demand for aquaculture feed extends an uptrend as aquaculture has gone into the peak season. In addition, there is also a rise in the production and sales of ruminant feed, as farmers are making replenishment on the back of the increase in feedstock and feed prices.

Of all 1135 feed enterprises in China surveyed by Cofeed, feed production was 9,750,529 tonnes in June, up 393,941 tonnes or 4.21% from 9,356,588 tonnes in May.

Specifically,

Hog feed: 3,986,248 tonnes, up 295,983 tonnes or 8.02% from 3,690,265 tonnes in May.

Poultry feed: 4,362,974 tonnes, down 130,521 tonnes or 2.90% from 4,493,495 tonnes in May.

Aquaculture feed: 1,108,236 tonnes, up 195,679 tonnes or 21.44% from 912,557 tonnes in May.

Ruminant feed: 280,971 tonnes, up 32,002 tonnes or 12.85% from 248969 tonnes in May.

Other feed (specific feed): 12,100 tonnes, up 798 tonnes or 7.06% from 11,302 tonnes in May.