China's feed market experienced a hard time in 2007, says a recent report. Hog farms suffered a substantial reduction of hog inventory.

A resume of the Feed Industry Market Review & Outlook 2007-2008 Proposal says that demand for Feed reduced largely and feedstuff price surged on a high level. Soymeal price even surpassed the highest level of RMB3,500/MT in 2004, resulting in more than 5,000 mid-small scale feed manufacturers suffering from stop production in China.

Affected by tense hog supply and surging hog purchasing price, numbers of large scale animal slaughtering and meat processing enterprises begun breeding and feed production enterprises. This caused a reduction of feed market share rate and coupled with a slow-down in feed demand and high prices brought down profits and losses in feed industry. Large scale integrated feed and production groups have increased their market share in a bid to gain more profit and accelerate market distribution. And, while the depletion of small scale feed factories provides opportunity for large scale feed businesses, it is expected that the feed market in China will continue to be carved up by large scale enterprises in 2008.

Milestone
Last year proved a milestone in Chinese feed industry. With the expansion of animal breeding and long-term feedstuff price increases, product structure adjustment was inevitable and did occur. Feed production is changing, by way of formulation and output, although growth int eh market did tend to be slower than expected. In terms of feed varieties, formula feed and premixed products, the market did grow. The use of concentrates declined. In addition, corn feed supply tends to be tightening on year-on-year basis, so farmers have begun to use alternative raw materials and feed sources. Again this has been affected by industrialisation trends and costs.. On the basis of livestock and poultry inventory and feedstuff in 2007, this study gives an in-depth analysis of demand, production and product structure in the feed industry in 2007. It also provides some outlook of the feed market based on changes being seen in the breeding sector and feedstuff market in 2008. It is, say the authors, a reliable reference to relevant enterprises within decision-making processes.