Why is there a shortage of chickens in China amid the global bird flu outbreak?

An unprecedented global bird flu outbreak that has killed 58 million birds in just over a year in the US alone is causing pain for the world’s second-largest poultry producer: China is running short of chicks.

Since the start of the year, prices in China have risen, posing the risk of a rise in food inflation, but also highlighting a weak link in Beijing’s efforts to boost food security. The world’s largest market relies heavily on imported breeding stock for white-winged broiler chickens, which account for more than half of the country’s chicken production.

Chicks from Shandong Yisheng Livestock and Poultry Breeding Co, a top chicken breeder in China, cost about 6 yuan ($0.86) per chick this week, three times the price at the beginning of the year.

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“One underlying factor is insufficient importation of breeding stock,” said Lin Guofa, head of research at consultancy Brick Agriculture Group. “Supplies are tight.”

According to industry estimates based on customs data, imports of China’s so-called grandfathered breeding chicken stock in 2022 are far less than would normally be needed to meet production demand.

Apart from the growing outbreak of bird flu, the disruption of flights due to Covid restrictions last year also restricted imports.

According to official statistics, in 2022 the number of white-bred broiler chickens is set to decline by more than a fifth. Industry sources say some breeders have been forced to resort to forced molting—a practice that extends the productive life of a hen flock.

China will develop its first independent white-feather broiler breeds in 2021, after nearly two decades of sourcing almost entirely from overseas. But Beijing is still dependent on foreign imports as limited domestic breeds have yet to gain significant market share.

Now there may be an added incentive to accelerate those efforts, given the restrictions imposed around the world by bird flu, and greatly limiting China’s options for breeder imports. Currently, China can only import from one US state, Alabama, and New Zealand, according to a filing this month from breeder Yisheng.

There may also be some way to run the deficit.

“Imports of grandparent breeding stock have been down since May last year,” Shandong Minh Animal Husbandry Co., Ltd., another top breeder in China, said in a filing last week. “The shortage of commercial chicks appears to be gradually increasing since the end of the second quarter or the beginning of the third quarter. Prices will be strong. ,

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