According to a research report by CMSC, the average price of chicks in major producing regions in October was RMB 3.35 per bird, down 19.3% year-on-year but up 2.4% month-on-month. White feather broiler farmers faced deeper losses, yet chick restocking enthusiasm remained strong. Overseas breeding stock imports have declined significantly since the beginning of the year, which is expected to tighten the supply of parent stock broiler chicks in the second half of 2025 and subsequently impact the supply of commercial broiler chicks in 2026.
For yellow feather broilers, demand softened slightly after the Mid-Autumn and National Day holidays, but prices remained favorable in October, delivering solid profits for farmers. Leading companies have lowered their production costs for yellow feather broilers to relatively low levels. With seasonal consumption recovery in Q4, poultry prices are expected to rebound, potentially unlocking profit elasticity.
**Key Takeaways:** 1) **White Feather Broilers:** - Average chick price in October: RMB 3.35/bird (-19.3% YoY, +2.4% MoM). - Live broiler price: RMB 6.93/kg (-6.8% YoY, -0.9% MoM). - Processed poultry products: RMB 8,700/ton (-5.3% YoY, +0.4% MoM). - Farmers incurred a loss of RMB 1.78 per bird. - Reduced chick supply due to earlier breeding stock culling and lower productivity of newly introduced stock. - Strong restocking demand from farmers with idle capacity supported chick prices. - Overseas breeding stock imports dropped sharply, tightening parent stock supply in H2 2025 and commercial stock supply in 2026. - Recommended stock: Sunner Development (002299.SZ), an integrated leader with cost improvements.
2) **Yellow Feather Broilers:** - Fast-growing broiler price: RMB 4.82/jin (-6.4% YoY, -10.9% MoM). - Xueshan grass chicken price: RMB 7.68/jin (-13% YoY, -14.2% MoM). - Leading firms like Wens and Lihua have reduced production costs to ~RMB 5.8/jin and below RMB 5.7/jin, respectively. - Post-holiday demand dip was offset by resilient pricing, sustaining profitability. - Supply contraction, driven by prolonged industry losses and lower parent stock inventory, sets the stage for price recovery. - Long-term growth potential lies in chilled yellow feather broilers, supported by shifting consumption habits and economic recovery. - Recommended stocks: Lihua (300761.SZ) and DEKON AGR (02419).
**Risks:** - Unexpected volatility in poultry prices. - Underperformance in sales volume or cost control by listed companies. - Large-scale disease outbreaks. - Fluctuations in feed ingredient prices. - Major food safety incidents.
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