China’s poultry sector, one of the world’s largest, is undergoing a turbulent transformation. Despite technological advances and massive production scales, 2025 has marked the beginning of an era of consistently shrinking profit margins for poultry farmers in China.
This blog will give you an in-depth view of what’s causing this decline, its effects on global poultry trade, and how farmers in China and abroad can adapt. We will also share daily insights into the financial, production, and policy changes reshaping the Chinese poultry industry.
📉 1. The Profit Squeeze: Why Farmers Are Struggling
🐓 Rising Production Costs
Feed prices have skyrocketed due to global grain shortages and increased transportation expenses. Maize and soybean—staples of poultry feed—now cost 25–40% more than they did just three years ago.
💡 Electricity and Utility Prices
Increased energy costs due to China’s carbon neutrality goals are driving up utility bills in poultry farms, particularly those using climate-controlled systems.
🤒 Higher Disease Management Costs
Recurring avian influenza outbreaks, coupled with Marek's Disease, require continuous vaccination, surveillance, and sometimes culling. These add to the operational expenses without increasing output.
🌏 2. Overproduction and Market Saturation
🐥 Oversupply Issues
With thousands of new poultry farms entering the market since 2020, supply now outstrips demand in most urban zones.
📦 Cheap Supermarket Pricing
Retailers are demanding lower prices from suppliers, putting downward pressure on farmgate prices. Even large-scale producers can’t meet profit targets under these conditions.
📊 3. Weak Consumer Demand and Dietary Shifts
🥗 Urban Consumers Going Lean
Younger consumers are switching to plant-based diets, or choosing premium, free-range poultry options. This has affected bulk meat demand.
🐮 Competition from Other Proteins
Beef, fish, and plant proteins have become cost-competitive alternatives, particularly with aggressive marketing.
💹 4. Global Trade Barriers and Export Disruptions
🚢 Tariffs & Restrictions
Tensions with key poultry importing countries like the US and EU have led to tariff increases and stringent quality controls on Chinese exports.
🇷🇺 Russia and Brazil Step Up
Brazil and Russia have filled the gap in global markets, especially in Asia and Africa, affecting China's poultry export volumes.
🏛️ 5. Government Policy Challenges
🧾 Regulatory Overhead
The push for biosecurity and environmental compliance has led to increased paperwork, licensing fees, and inspections, especially in urban and semi-urban poultry units.
💰 Limited Subsidies
While pork farmers receive subsidies during price crashes, poultry farmers are often overlooked, resulting in deeper financial losses.
💼 6. Impact on Small-Scale and Backyard Poultry Farms
🧑🌾 Forced to Exit the Market
Thousands of smallholders are selling off flocks, as they can’t compete with the economies of scale enjoyed by large, vertically integrated companies.
🐣 Loss of Livelihood
Rural families depending on poultry income are turning to alternative income sources like crop farming or migration to urban areas for low-wage jobs.
👨👩👦 7. Demand Is Weakening Post-COVID
While consumption spiked during COVID-19 lockdowns, demand is plateauing in urban areas.
- Younger Chinese consumers are leaning toward plant-based alternatives.
- High-income consumers now prioritize food safety and traceability—hurting budget poultry brands.
- Hospitality and tourism sectors still haven’t fully recovered, lowering commercial poultry sales.
💬 A restaurant chain in Shanghai reduced chicken-based menu items by 40% due to lower footfall and changing preferences
📈 8. Strategies to Survive the Low-Profit Era
📉 Cost Optimization Techniques
- Use of local feed formulations
- Solar-powered temperature control systems
- Vaccination timing optimization
🌐 Digital Poultry Farming
Smart sensors, AI-based disease prediction tools, and IoT monitoring are helping large farms increase efficiency and reduce losses.
🤝 Forming Cooperatives
Poultry cooperatives are growing in response to market volatility, helping small farmers pool resources and sell in bulk.
🔍 Diversification
- Add value-added products like pre-marinated chicken, nuggets, or organic eggs.
- Explore dual farming—layer hens alongside broiler chickens.
📈 Market Niche Targeting
- Focus on local brands with traceability, hormone-free, or organic claims.
- Build direct-to-consumer (D2C) models using e-commerce and social platforms like WeChat.
🐔 9. How This Affects the Global Poultry Supply Chain
🌍 Rebalancing Trade Routes
- China’s import demand for poultry breeding stock has dropped.
- Southeast Asia and Middle East countries now rely more on Brazil and the US for chicken imports.
💵 Price Volatility
As China's buying decreases, global poultry prices may stabilize or drop—good for importers, risky for exporters.
🔮 10. The Road Ahead: What Can We Expect in the Next 5 Years?
🔧 Industry Consolidation
Only the most efficient farms will survive. Expect more automation, vertical integration, and AI-based production models.
🌱 Rise of Alternative Proteins
Government-backed research on lab-grown meat and plant protein could reduce poultry consumption further in cities.
🦠 11. Avian Influenza Outbreaks Continue to Disrupt
Every year, China reports several outbreaks of H5N1 or H7N9 variants. This reduces consumer trust and leads to mass culling:
- 2025 saw significant outbreaks in Jiangsu and Sichuan.
- Local governments impose lockdowns, delaying transportation and sales.
- Compensation to farmers is often delayed or below market losses.
🧠 Final Thoughts
The era of easy profits in China’s poultry sector is over—efficiency, resilience, and innovation are now the keys to survival. While it poses challenges, this shift may also lead to a leaner, more sustainable poultry industry in China and worldwide.
By understanding the forces at play and adopting smarter farming models, poultry producers can still thrive—even in low-margin environments.
❓ Most FAQs About China’s Poultry Profit Crisis
Q1. 🔍 Why are poultry farmers in China losing profits in 2025?
A: Due to rising feed costs, overproduction, low consumer demand, and stricter policies, profit margins have sharply declined.
Q2. 🐥 What’s the biggest challenge for small poultry farms in China?
A: Market saturation and lack of subsidies make it hard for small farms to compete with industrial producers.
Q3. 📉 How has global poultry trade changed because of China’s profit drop?
A: China’s export share has reduced, giving more space to countries like Brazil and Russia in Asian and African markets.
Q4. ⚙️ What technologies are helping Chinese poultry farmers stay afloat?
A: AI monitoring, smart sensors, feed optimization, and solar-powered systems are reducing costs and improving productivity.
Q5. 🌱 Are plant-based proteins affecting poultry demand in China?
A: Yes, urban dietary shifts toward health and sustainability have reduced the demand for traditional poultry meat.
Q6. 🌱 How can poultry farmers in China survive low profits?
By diversifying products, reducing production costs, and targeting niche consumer segments.
Q7. 📦 Are poultry exports from China still competitive?
A: Not as much. Brazil and the US dominate due to lower costs and stronger food safety standards.
Q8. 🦠 How is avian flu affecting China’s poultry industry?
A: Outbreaks lead to culling, price drops, and damaged consumer trust.
Q9. 💡 What are future trends in China’s poultry industry?
A: More consolidation, traceability, automation, and sustainable feed sourcing.