CHINA – Fewer cases of H7N9 bird flu through May and the announcement of a government subsidy boost will bring a dramatic increase in market fortunes over mid-summer, Chinese economists have predicted.
This will come as welcome news to poultry farmers devastated by the effects of mandatory culling, market closures and rock bottom prices, as public fears over meat and egg food safety slackened product demand.
Economists now know the economic impact of bird flu outbreak to producers. Ma Wenfeng, an Agribusiness Consultant at Beijing Orient Agribusiness Ltd, calculated April losses for a standard 10,000 bird egg unit at 30,000 yuan.
Losses have been widespread since March with eggs retailing for 1.2 yuan per kilo below production cost.
Broiler prices also plummeted. In the first week of April the price of a 2.5 kilogram bird fell from 3 yuan to 0.24 yuan.
Consequently, many farmers have reduced breeding stocks or have been forced out of business entirely.
In order for the poultry sector to benefit from the predicted upturn in chicken and egg buying, the government has announced a farm subsidy initiative.
Worth $96.77 million to the economy, the subsidy package is to be accompanied with government pleas to the bank sector to offer credit and loans to poultry breeders and companies.
However, the rebuilding process will need several weeks to take effect, said Professor Cui Shizhong of Shandong Agricultural University who expects prices to build in June or July.
"Many breeders in Shandong, a major poultry production province in eastern China, have reduced or killed all their breeding stocks in response to losses," said Cui Zhizhong. "In a couple of production cycles, poultry prices could go up sharply and this could affect the national market.”
Industry spokesmen have suggested the development of agricultural insurance to safeguard farmers from future outbreaks to ensure success in this vital rebuilding period.
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