What is in this article?:
- Bird flu impact on corn not severe?
- Spread of virus?
- China's bird flu outbreak impact on corn demand may be less than initially feared.
Spread of virus?
If the virus continues for another month or two and spreads around the country, however, the effect would be more significant. China produces around 17 million metric tons of poultry meat, so a 5 percent reduction is 850,000 metric tons of meat.
The birds at live markets tend to be "high quality" traditional varieties with far less efficient feed conversion than modern chickens in the west, roughly 4:1 live weight, or 5.3 to 1 feed to meat, with corn comprising about half of that feed.
A 5 percent reduction in meat production would thus result in about 2.25 million tons (88.5 million bushels) reduction in corn feed demand, or only about 1.6 percent of China's 144 million tons (5.6 billion bushels) of corn feed demand for 2012/13 (USDA estimate), and 1.1 percent of USDA's estimated 207 million tons (8.1 billion bushels) 2012/13 total corn demand in China.
The substitution of pork for poultry that occurs is thus likely to limit any reductions in corn demand, and if a little more than half the poultry is substituted by pork, then corn feed demand will actually rise because of the higher corn input required to produce pork.
The effect of pork substitution for poultry will be somewhat lagged; increased pork consumption today will raise pork prices and cause inventories to replenish faster than otherwise, resulting in more feed demand over the summer. However, if fish is the primary substitute, this will do little to increase corn feed demand, but would mitigate the fall in protein meal demand brought about by the lower poultry production.
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