Equity Analysis /

Thailand: Agro & Food - Persisting shortage of livestock breeders through 2023

  • Sustained high breeder prices due to persisting breeder shortages

  • Stronger provincial prices but softer Bangkok prices due to rain

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Bualuang Securities
1 December 2022

The sustained high piglet and day-old chick prices reflect the ongoing breeder deficit which will continue through 2023. Provincial livestock prices have inched up since the flooding stopped but the Bangkok prices have softened due to the short-term return of rain. GFPT, TFG and CPF valuations are attractively cheap.

Sustained high breeder prices due to persisting breeder shortages

The day-old chick price has been high at Bt19.25/bird since Jul 19 to now, while the piglet price has sustained high at Bt3,600/head since May 17. We believe that these price levels reflect the persisting breeder shortages. According to internal sources from various Thai livestock operators, the sow pig herd is currently 30-35% below the pre-ASF level. Hence, we expect the number of piglets and fattening pigs ready for slaughtering to remain low at least through mid-2023 (the conservative scenario) or through YE23 (the likely scenario). Even if there could be some additional supply kick-in from small-scale pork operators in 2H23, we believe that it will be insignificant given the sustained high feed costs which are discouraging them from entering the market or expanding their capacities. The domestic corn price hit its high of Bt12.7/kg again while the SBM price reached its new high of Bt23.5/kg in Nov.