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With the development of China's economy and the government's high attention to agriculture in preferential policies, price support, grain subsidy and other aspects, the agriculture rapidly develops in general.
As for farming industry, the grain output of China increased for consecutive seven years from 2005 to 2011. In 2011, the grain sowing area and output of China all recorded high in 2011. The supply and demand of three grain, paddies, wheat and corn wholly balances. The profitability of paddy farming is relatively stable; wheat farming slightly decreases in fluctuation and that of wheat planting increases under the influence of demand expansion. With the increasing demand for downstream feed processing, the import demand of China's soybeans continuously rises. The profitability of domestic soybean farming enterprises and farmers will constantly weaken with the shock of imported soybeans.(Full report:http://www.cri-report.com/agriculture/4904-research-report-on-china-s-agriculture-and-animal-husbandry-2012.html)
In terms of animal husbandry, with the increase of meat consumption, domestic animal husbandry swiftly develops. Since 2008, the whole profitability of animal husbandry constantly improves. As the largest component of China's meat consumption, the pork price drastically fluctuates under the joint effects of live hog supply volume and feed cost prices. The substantial fluctuation of pork and feed prices aggravate the operation risk of enterprises.
With regard to feed industry, the feed produced by China's industry accounts for a low proportion in total feed consumption. The huge demand of animal husbandry provides feed industry with the broad development space. The competition in China's feed industry is intense, but the whole profitability is strong. Since 2005, the profit of feed enterprises constantly increases. During 2008 and 2011, China's agriculture and animal husbandry appeared a stable performance, but part of farming industries and enterprises relevant to seasonal consumption presented cyclic characteristics in profitability.
Since 2012, the stock consumption ratio of China's major grain crops is still within margin of safety. However, because of the decline in growth rate of domestic economy and decrease of consumption demand, the increase amplitude of agricultural products prices tended to be slow in the first half of 2012; however with the driving of external shock in the second half of 2012, the grain price was expected to rise.
In consideration of intensified policy support of China's government for agriculture and animal husbandry, meanwhile with the progress of science and technology, the expansion of enterprise scale and the increase of upstream and downstream M&A, the concentration of enterprises in China's agriculture and animal husbandry will gradually increase. It is predicted that in a future period, the profitability of excellent enterprises in the industry will be relatively stable, but that of some enterprises with sole business will be shocked by external and appears a fluctuation.
With the growth of China's economy and the improvement of people's living standards, the development prospect of China's agriculture and animal husbandry is bright.
by S. C.
20 september 2012, World News > Asia