China’s chicken industry is suffering overcapacity, which is causing losses for producers and processors. Chicken consumption grew at a 4.4% annually for 10 years to 2011, and industry players were betting the trend would continue when they invested in expansion, said Rich Herzfelder, a speaker at the Gira Asia Meat Club.
Instead, consumption stagnated starting in 2012 due to a series of safety issues and outbreaks of avian influenza. But politics and local government support make it extremely difficult to close down redundant capacity, and consequently inefficient and money-losing facilities continue to operate.
Source: asian agribiz