Chicken nuggets are 1 yuan, burgers are 8.8 yuan, KFC and McDonald’s suddenly launched big promotions, the truth is unexpected

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: Lu Xiangyong

KFC Golden Chicken Nuggets 9 yuan 9.9 yuan, McDonald's McDonald Chicken 1 yuan 1 yuan, Grilled Chicken Drumsticks 8.8 yuan... Recently, many careful netizens have discovered that McDonald’s and KFC The two fast food chain giants have successively set off a wave of discounts and promotions, with continuous discounts every day.

Chicken nuggets are 1 yuan, burgers are 8.8 yuan, KFC and McDonald’s suddenly launched big promotions, the truth is unexpected - Lujuba

McDonald’s China CEO Zhang Jiayin introduced that the total discounts for this year’s Golden Powder Festival will exceed 200 million yuan.

Why do these fast food brands suddenly start big promotions? One of the reasons may surprise you: chicken is cheaper!

Chicken nuggets are 1 yuan, burgers are 8.8 yuan, KFC and McDonald’s suddenly launched big promotions, the truth is unexpected - Lujuba

Image source: Photograph.com

Chicken prices have fallen against the trend. Compared with the high-profile prices of pork and beef, chicken has obviously been "unbearable to look straight" recently. According to data released by China Feed Industry Information Network, on August 28, the price of white feather meat chicken was 3.93 yuan per catty, which was a drop of 20% compared with 4.95 yuan per catty on April 1. According to data from the China Animal Husbandry Association, white feather broiler chickens are the largest source of chicken meat in my country's terminal consumer market, accounting for more than 50% in 2017.

In contrast, pork and beef prices are a different story. According to data from the Ministry of Agriculture and Rural Affairs, on August 28, the wholesale price of pork in the agricultural market was 48.41 yuan/kg, up 4.5% from 46.31 yuan at the beginning of April, and it has broken through 50 yuan/kg. During the same period, the average wholesale price of beef in the national agricultural product market rose from 71.66 yuan per kilogram to 74.28 yuan, an increase of 3.7%. Recently, beef prices have even been on the hot search due to the 10 consecutive weeks of rising.

According to Jiemian News, from the analyst's point of view, the weakening of chicken prices is the result of supply and demand.

Chicken nuggets are 1 yuan, burgers are 8.8 yuan, KFC and McDonald’s suddenly launched big promotions, the truth is unexpected - Lujuba

Image source: Photograph.com

According to data from China Industry Information Network, in 2017, the year before the outbreak of swine fever, my country's chicken consumption was 11.475 million tons. In 2019, national chicken consumption rose to 14.273 million tons. With rising prices and increasing profits, broiler farmers are naturally active in replenishment. But the problem is that analysts pointed out that the chicken-raising cycle is much shorter than that of pigs, and the concentration of replenishment in the short term will lead to a relative oversupply.

On the demand side, catering consumption has not fully recovered until now, and the demand for chicken is not so great. The latest statistics from the National Bureau of Statistics show that in July, domestic catering revenue was 328.2 billion yuan, a year-on-year decrease of 11.0%. From January to July, catering revenue dropped by 29.6% year-on-year.

China Food Industry Analyst Zhu Danpeng said that the price of chicken meat in the future will mainly depend on the leverage of supply and demand. If farmers feel that they cannot make money and the supply is less, the price will rise again. Zhu Danpeng said that with the arrival of the school season in September, the demand for chicken meat may improve slightly, but at present, due to the oversupply situation has not changed, the room for the price of chicken to rise is relatively small.

Listed chicken raising companies don’t want to highlight the moment.

On August 5, the leading chicken farming company Minhe shares released the 2020 semi-annual report. In the first half of 2020, it achieved a net profit of 232 million yuan, a year-on-year decrease of 73.26%.

This is not the case. In addition to the performance of Xiangjia, the leader of the company's ice-fresh yellow feather chicken, bucking the trend, the performance of chicken companies in the first half of this year has declined to varying degrees. Among them, the chicken-raising leader Shengnong Development’s net profit attributable to the mother in the first half of this year was 1.332 billion yuan, a year-on-year decrease of 19.4%; Xiantan shares achieved a net profit of 279 million yuan, a year-on-year decrease of 30.82%; Yisheng shares net profit in the first half of the year 2.04 Billion fell by 77.42%. Image source of

Chicken nuggets are 1 yuan, burgers are 8.8 yuan, KFC and McDonald’s suddenly launched big promotions, the truth is unexpected - Lujuba

: Photograph.com

In the first half of the year, Wen's shares, whose net profit attributable to their mothers increased by 200% year-on-year, also encountered "Waterloo" in the chicken business. According to Wen's disclosure, the production capacity of the poultry industry has gradually reached its historical peak since the fourth quarter of 2019. The live poultry market has experienced a phased oversupply. Coupled with sluggish consumption, the company's poultry business profit has fallen sharply year-on-year, resulting in large losses. In the first half of the year, the company set aside 717 million yuan for the price drop of broilers and ducks.

In contrast, in 2019, under the influence of African Swine Fever, the alternative demand for poultry meat for pork has brought about a boom in the poultry industry. Chicken farming companies have made a lot of money, and Minhe shares made a huge profit of 1.61 billion yuan throughout the year. Profit increased by more than 3 times; Yisheng shares annual profit exceeded 2.1 billionYuan, an increase of nearly 5 times.

Xiantan shares said that the main reason for the decline in profits was that the company's chicken product sales prices fell year-on-year due to the impact of the new crown pneumonia epidemic. With the gradual improvement of the epidemic prevention and control situation, enterprises and schools have gradually resumed work and school, the catering industry has begun to recover, and the chicken product market will gradually pick up. It is expected that chicken prices will rise in the second half of the year.

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