A research report from China Merchants Securities indicates that chicken supply was relatively ample in February, but post-holiday demand was limited, leading to a gradual slight decline in chicken prices after the Spring Festival. However, due to previously low chick costs, breeding operations still maintained some profitability. The price of chicken products was significantly better than in previous years. Post-holiday chick supply was not substantial, and breeding enterprises showed a clear willingness to support prices, bolstering chick prices.
During the Spring Festival period, consumption of Yellow Feather chickens improved in both the catering and household sectors. Notably, slow-growing chicken prices were more resilient before the holiday, while fast-growing chickens also maintained favorable profitability during the holiday period. The current cost of bringing Yellow Feather broilers to market has fallen to a low level. In February, leading breeding enterprises may have seen average profit per bird rise to around 2 yuan. The high market prosperity for Yellow Feather chickens is expected to continue into 2026.
Key views from China Merchants Securities are as follows:
White Feather Chickens: Post-holiday live chicken prices declined, but chicken product prices were significantly better than historical averages. The average price for live chickens in main production regions in February was 7.49 yuan/kg, up 24% year-on-year but down 1.9% month-on-month. The average chick price was 2.52 yuan/bird, up 19.2% year-on-year and up 4.4% month-on-month. The average chicken product price was 9,300 yuan/ton, up 2.8% year-on-year and up 0.5% month-on-month. Live chicken breeding operations averaged a loss of 0.02 yuan per bird. Supply was relatively ample this month, but post-holiday demand was limited, causing prices to gradually decline slightly after the holiday. Profitability persisted for breeders due to earlier low chick costs, and chicken product prices were notably stronger than in past years. Post-holiday chick supply was limited, with breeding firms demonstrating clear price support intentions, which buoyed chick prices.
China's imports of grandparent stock in 2025 decreased by over 10% year-on-year. Furthermore, outbreaks of avian influenza in France's key breeding regions of Maine-et-Loire and Côtes-d'Armor during November-December 2025 further impacted domestic importation of breeding stock. Positive prospects are held for the breeding segment.
Yellow Feather Chickens: Catering and Household Consumption Drive Improvement, Profits Surge The average price for fast-growing chickens in February was 4.24 yuan/jin, down 13.4% year-on-year and down 12% month-on-month. The average price for Xueshan grass chickens was 7.93 yuan/jin, down 5% year-on-year but up 3.3% month-on-month. Consumption improved during the Spring Festival, with slow-growing chicken prices showing particular resilience pre-holiday, while fast-growing chickens maintained sound profitability. Considering production capacity, the current parent stock inventory has fallen to historically low levels. Coupled with industry-wide losses exceeding six months in 2025, this has led to further capacity reduction. Supply contraction lays the foundation for future price increases. The Yellow Feather chicken sector entered an upward cycle starting in Q4 2025, with prices warming significantly, leading to higher volumes and prices for quality enterprises. Current market costs are low, with leading breeders potentially achieving average profits of around 2 yuan per bird in February. High market prosperity is anticipated to continue into 2026.
Breeding Segment for White Feather Chickens Looks Positive; 2026 May See Yellow Feather Chicken Profitability 1) White Feather Chickens: The decline in grandparent stock imports in 2025, combined with avian flu impacts in France, is expected to sustain high prosperity in the parent stock segment in 2026, subsequently affecting the supply of commercial chicks. A positive outlook is maintained for the breeding segment. Sunong Development (002299.SZ) is highly recommended. 2) Yellow Feather Chickens: Low parent stock inventory and prolonged industry losses in 2025 have set the stage for price increases. The sector's upward trend since Q4 2025 has led to significant price recovery, benefiting high-quality enterprises with higher volumes and prices, and excellent profit per bird. Continued high prosperity is expected in 2026. Li Hua Co., Ltd. (300761.SZ) and DEKON AGR (02419) are highly recommended.
Risk warnings include greater-than-expected fluctuations in chicken prices; listed companies' sales volumes and cost performance falling short of expectations; outbreaks of large-scale, uncontrollable diseases; greater-than-expected fluctuations in feed ingredient prices; and major food safety incidents.
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