International Poultry Forum China 2020 (IPFC) was successfully held in Jinan on August 7-8.
More than 600 experts, entrepreneurs and representatives from the poultry meat and egg industry chain attended the event. With the theme on “Innovation and Progress,” focused on “the poultry industry under uncertainty,” IPFC 2020 made in-depth analysis and discussion on topics such as difficulties and opportunities of the poultry industry under the COVID-19 pandemic, global trends of Chinese poultry meat production and global consumption supply chain opportunities, antibiotic-free and antibiotics reduction policy development strategies, precision farming, digital technology application development issues.
Re-examine the world
“Today, changes unseen in a century are still evolving. The important thing is that we should re-examine the world, rethink the relationship between humans and nature, between biology and between countries, and welcome the new world order with a new attitude, in addition to dealing with COVID-19, the economic recession and the food crisis,” Dingding Li, publisher of Poultry International China Magazine, general manager of LyJa Media said at the opening speech, “Leading enterprises for the next decade are those that have strong resilience to take risks, make positive changes, have better market-oriented operations, build a more flexible supply chain system and a cooperative mechanism of production and marketing, have control over the core resources, get closer to consumers, as well as the ability to fully embrace the industrial chain and new technology change.”
Looking to the future in Shandong
“In recent years, the poultry industry in the Shandong province has shown the characteristics of large-scale production, high efficiency, fast kinetic energy conversion, excellent employment structure and wide market layout under policy-led, technology-driven, market-driven, capital-driven,” Dai Wenchao, vice director of Shandong Animal Husbandry and Veterinary Bureau said in his speech,
“In the future, we will continue to actively practice new development concepts, focus on high-quality development, to speed up the old and the new kinetic energy conversion, and keep on working in strengthening science and technology support, speeding up the independent breeding, fostering new model, improving the quality of supply, innovating production organization mode, adjusting the industrial structure, optimizing the market layout, strengthening consumer guide.”
Global cooperation needed in poultry industry
Greg Watt, CEO of WATT Global Media, said in his video speech, “The global poultry industry has undergone tremendous changes due to the continuing impact of African swine fever and now COVID-19. With these ongoing challenges are also many opportunities if the industry works together. Especially in China and the United States, there is a continued need to share the best industry practices, advanced technology, and jointly promote the industry development and sustainability to earn the trust of consumers today and in the future”.
Product branding is an inevitable trend of future development
“Although the integration of the layer industry has been carried out step by step from the grandparent generation to the commodity generation, the integration of the grandparent and parent generation has not been completed yet, and the integration of the commodity generation has only just begun.” Yuan Zhengdong, chairman of Supervisory Board of Beijing DQY Ecological Technology Co., said in his report, “The Dilemma and Development of the Chinese Layer Industry Under COVID-19.”
“Personally, I think the integration of parent generation and commodity generation requires 5-10 years and 10-15 years, maybe longer to finally achieve industry reasonable demand of grandparent generation, 350,000 sets, parent 15 million sets, commodity generation 1-1.1 billion .”
With the gradual increase of scale feeding, the number of domestic layer-raising farmers will gradually decrease from more than 200,000 to 100,000, or even less. Zhengdong stressed that “big groups must adhere to the brand strategy in order to occupy more market share, increase the single value of products and absorb excessive production costs, while small and medium-sized chicken farms are forced to improve the quality of products and take distinctive routine plus brand in order to keep the existing market share. Therefore, product branding is an inevitable trend.”
In addition, Zhengdong said: "The maturity and stability of the layer industry depends on the progress and maturity of the leading large and medium-sized layer enterprises. Taking Hanwei Group, Shendan Group, Sundaily Farm, and Beijing DQY Agriculture as examples, no matter where the starting point is, the companies will eventually develop towards brand and integration in the form of the whole industry chain, and the integrated application of its modern high-tech achievements will gradually release the scale benefit."
Yang Ning: Maintaining the core advantage of poultry to meet challenges
“At present, China is facing the impact of COVID-19 and risks from international politics. To some extent, this has accelerated the formation of a new development pattern with domestic major circulation as the main body and domestic and international double circulation promoting each other. However, it has seriously affected the stability of China's supply chain, such as white-feather breeding chicken and feed raw material import,” Yang Ning, professor of China Agricultural University, chairman of the World’s Poultry Science Association (WPSA), said in the report “Strategic Thinking of China's Poultry Industry in the Context of Global Risk Escalation.”
Due to African swine fever, it is also a test on whether China's poultry meat and egg companies can make a profit in the long-term competition with pork, said Ning.
“Although ASF has promoted the development of pork protein substitution, there are still challenges in the production of layers in China, such as a dynamic imbalance between supply and demand dynamics, insufficient cost control and low efficiency of large-scale breeding, low product branding and unclear differentiation.
“The production of broilers is facing ups and downs in competition with pork, limited variety sources, and the impact of the rapid development of meat duck on broilers.” Yang said.
Yang concluded the report by saying three key elements are needed to maintain the core advantage of poultry in the future:
- Improve feed conversion rate to cope with feed resource shortage and supply chain shortage.
- Enhance the breeding capacity of breeding birds to make up for the supply of high-quality animal feed quickly in case of sudden crisis.
- Accelerate the localization and diversification of poultry varieties.
Feng Chenchen: Keep up with consumer trends and make changes
“Affected by COVID-19, China's overall economy showed a downward trend in the first half of 2020, and recovered slightly by the end of the second quarter; Since July, the recovery has shown signs of slowing,” said Feng Chenchen, senior manager of food supply and integrity services, PwC Food Industry.
Chenchen delivered the talk, “The Impact of the Global Spread of COVID-19 on the Economy and China's Consumption Structure.”
Chenchen said the recovery of China’s economy will still face four big difficulties: the uncertainty of the pandemic, geopolitical risks, unemployment and income, and government debt and inflation pressure.
Today, the “homestead economy” is fueling a surge in online food and grocery sales. According to the data released by the National Bureau of Statistics, China, in the first quarter of 2020, the total retail sales of consumer goods in China fell by 19%, while the online retail sales of physical goods only increased by 5.9%, but the online retail sales of food goods increased by 32.7% year on year.
“The retail sales growth in recent months is not a temporary anomaly caused by the epidemic prevention and control measures, but the acceleration of the original consumption trend,” Chenchen said.
“Due to the impact of the epidemic, the difficulties encountered by the food industry are often the disruption of upstream raw material supply, mismatch of commodity supply and demand, and difficulties in cash flow,” Chenchen said. Therefore, enterprises should be innovation-oriented in the future, to strengthen the application of digital and automation technology so as to strengthen supply chain management. More importantly, companies should also pay attention to changes in the market and consumer trends, so as to accelerate their own transformation.”
Impact of COVID-19 on global agricultural trade
“From 2010 to 2018, the growth rate of global trade in livestock products showed a two-stage characteristic of first fast and then slow, and the space for further growth of trade volume narrows. Moreover, the international market share of livestock products in various countries is relatively stable, and the production area is basically solidified,” said Wang Mingli, Researcher of Institute of Agricultural Economics and Development, Chinese Academy of Agricultural Sciences in his report, “Impact of COVID-19 Epidemic Situation on Global Agricultural Trade Supply Chain and Analysis of Competitiveness of Chinese Livestock Products.”
The COVID-19 pandemic caused serious influences to the global circulation of livestock and poultry breeding, slaughtering and processing, and aquaculture for countries seriously affected by the pandemic such as the United States, Brazil, India and Britain. The exports of livestock and poultry products fell back, said Mingli.
For countries not seriously affected, such as Canada, Australia and New Zealand, the exports of livestock and poultry products are expected to increase, Mingli added. Meanwhile, exports from other regions are unlikely to increase significantly due to the lack of the necessary base for livestock and poultry exports.
“Against the backdrop of huge trade uncertainty and limited resources caused by COVID-19, to continuously improve the production efficiency of China's livestock industry and provide more high-quality and safe livestock products to ensure the normal supply of domestic livestock products will be the main direction of Chinese livestock industry development in the future,” Mingli said.
Biosecurity is the top priority in dealing with public health emergencies
“The COVID-19 pandemic has been identified by the World Health Organization (WHO) as a public health emergency of international concern (PHEIC). It has triggered multidisciplinary thinking,” Wei Jianping, senior consultant of Live Poultry Production, Fujian Sunner Group, said in the presentation, “Establish Public Health Emergency Plans and Biological Prevention and Control Measures.”
“From the perspective of poultry industry, with the expansion of enterprise scale and industrial chain extension, introduction, feed, vaccine, medicine and product sales and other links are increasingly dependent on the society. Once PHEIC or major public health emergency occurs, the impact will be more serious than a major poultry epidemic,” said Jianping.
In this regard, Jianping suggested: “In order to deal with public health emergency risks, the poultry industry needs to establish a public crisis prediction platform, timely collect national public crisis information and establish enterprise public crisis management plan. For enterprises, the premise is to ensure the supply of raw materials, followed by the personnel department, administrative department, production planning department, breeding chicken incubation department, feed research, launch and insurance department, etc., reasonable coordination.
“For the modern intensive poultry farming, prevention and treatment of infectious diseases that lack biosafety can increase costs and accelerate pathogen variability and severity and complexity of epidemic pollution,” Wei stressed, “Therefore, for industries and enterprises, biosecurity must be emphasized as the first line of defense against public health emergencies.”
The potential development area for the future of China's poultry industry
According to the June Global Economic Outlook released by the World Bank, the global economy is expected to contract by 5.2% by 2020. The impact caused by the epidemic will be severe, extensive and long-lasting, and the global economy is expected to rebound strongly in 2021.
“The COVID-19 outbreak has changed household lifestyles and habits, which has led to changes in consumption habits and will lead to changes in consumption upgrades, such as a concurrent increase in e-commerce sales and penetration rates during the outbreak. Although each channel has different target and customer needs, we cannot ignore that improving brand recognition and loyalty is the most critical action during the epidemic,” Ma Chuang, deputy secretary general of Chinese Association of Animal Science and Veterinary Medicine, said in the report “The Crisis and Opportunity of Poultry Enterprises in the Context of COVID-19.”
Ma also said that the rigid growth of total consumption of livestock products driven by population growth will fade by 2030, while economic and income growth will drive the growth of per capita consumption of livestock products as well as structural adjustment. Poultry products provided a large amount of cheap animal protein during the urbanization process, and the acceleration of the urbanization process now plays a greater role in promoting the consumption of poultry products and dairy products.
“Poultry consumption is expected to increase as urbanization accelerates, marriage rates decline, nutrient intake changes and aging becomes more severe, with poultry consumption expected to account for 41% of livestock products by 2030. In the future, poultry meat should focus on product development and promotion, and actively establish an independent breeding system to ensure safe supply,” Ma said. The consumption of poultry eggs has basically peaked, structural adjustment and quality improvement will be the development direction of poultry eggs. In addition, the consumption of poultry meat and eggs in the high consumption areas and the superior producing areas has reached saturation, and the northwest part of China (west of the Aihui-Tengchong line) is the potential future development area of the poultry industry of China.
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