April 24, 2019 / 11:00 AM / 2 months ago

UPDATE 1-Top China pig farmer falls into red on weak hog prices, hygiene costs

* Poultry producer Shandong Yisheng’s 1Q profit rises 36 times

* Pig farmer Tech-bank Food also posts big 1Q and 2018 losses (Adds detail on Shandong Yisheng, Tech-bank; chart on prices)

BEIJING, April 24 (Reuters) - China’s biggest pig and poultry producer, Wen’s Foodstuff Group, said on Wednesday it recorded a loss of 460.5 million yuan ($68.6 million) for the first three months of the year as weak hog prices eroded earnings and it spent more on protecting its herds from disease.

The firm, which produced 22 million pigs in 2018, reported a profit of 1.4 billion yuan in the same quarter a year earlier.

Also on Wednesday, Shandong Yisheng Livestock & Poultry Breeding, Asia’s largest breeder of white-feathered broiler chickens, said its first-quarter profit rose to 36 times the year-earlier figure at 381.9 million yuan as prices for breeding birds surged.

The diverging fortunes highlight the dramatic shift taking place in China’s farm sector, triggered by an outbreak of the worst swine malady ever to reach the country.

As African swine fever spread across China in the second half of last year, farmers rushed to slaughter pigs while others were unable to move livestock to market, pressuring prices in most areas until March this year.

Demand for poultry, however, has risen in response to concerns about the impact of the disease. African swine fever is fatal to pigs but does not harm people.

Wen’s Foodstuff sold 5.96 million pigs in the first quarter, almost 20 percent more than a year earlier, but low prices in the first two months of the year pushed its hog business into a loss, it said, even though prices rose in March.

The livestock producer also invested in new facilities and measures to prevent African swine fever, increasing costs.

Tech-bank Food Co Ltd, another fast-growing pig farmer, reported a first-quarter loss of 335.3 million yuan late on Tuesday and losses of 572 million yuan for 2018.

Wen’s, which also raises yellow-feathered chickens, encompassing many of the breeds native to China, said sales volumes of its broilers jumped 20 percent in the quarter to 184 million birds, but prices were down 14.78 percent over the prior year’s first quarter amid growing supplies in the market.

Still, Wen’s said it would stick to its strategy of producing more pigs and chickens, and plans to boost its broiler output by at least 10 percent this year.

As many as 200 million pigs could be culled or die in China this year because of African swine fever, according to one estimate, causing a severe shortage in pork and other meats.

($1 = 6.7150 yuan)

Reporting by Dominique Patton; Editing by Tom Hogue

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