Chapter 140: Cut off

Chapter 140: Cut off

Chapter 140: Cut off (Medium Cup)
The spring breeze in February is like scissors.

In this biting cold wind, something began to ferment rapidly among the South China F4, mainly from Lingnan, southern Fujian, Guangxi Province, and Qiongzhou.

Starting from February 5th.

The prices of fish feed, shrimp and crab feed, pig feed, and chicken and duck feed in South China have fallen slightly.

This is the first time that domestic feed market prices have fallen since the beginning of 2025.

Among them, eel fattening feed fell by 15%, juvenile shrimp and crab feed fell by 12%, adult shrimp and crab feed fell by 9%, piglet and chicken feed fell by 3%, and sow and laying hen feed fell by 1.5%.

The prices of other high-protein fish feeds also fell by 10-15%.

The main force behind lowering the market price of feed this time is Haida Group.

Since signing a cooperation agreement with Hailufeng Company, they took quick action in November last year, planting 6 mu of Egyptian catfish seedlings that month, and then increasing by 2 to 3 mu every month.

As the first batch of Egyptian catfish reached the collection standards in February this year, Haida Group immediately started the fish meal and fish oil production line.

In just five days, Haida Group produced 5 tons of fish meal and 1.65 tons of fish oil.

These fish meals and fish oils are used in the production of various feeds, reducing costs to varying degrees.

For example, the cost of eel fattening feed with 60% crude protein content has dropped from 1.3 yuan per ton to about 0.7 yuan per ton.

Therefore, Haida Group dared to lower the wholesale price by 15% at once. At present, the wholesale price of eel fattening feed of Haida Group has been reduced from 1.36 yuan per ton to 1.15 yuan per ton, a decrease of 2100 yuan.

Nansha District, Yangcheng.

As a large number of market breeders near the headquarters of Haida Group, they are the first to buy freshly made low-priced feed.

At this moment, the feed wholesale point of Haida Group was crowded and bustling, which was a rare situation.

A middle-aged man in a down jacket, smoking a cigarette, shouted, "Da Zhang, give me 20 tons of fresh eel feed."

"Lao Mo, didn't you just buy feed a few days ago?" The store owner Dazhang came over with a small notebook.

Upon hearing this, Lao Mo also looked depressed: "Hey! You are so dishonest! Can I return the feed I bought a few days ago?"

"Don't think about it. I don't know what the headquarters has decided. Do you want new feed?" Da Zhang spread his hands, indicating that he was powerless.

"Yes, of course." Lao Mo was just saying that in anger. He knew how high the price of feed was in the market now.

Last year, not only did the prices of fish meal and fish oil soar, but the prices of soybean meal and corn also increased significantly. This caused major domestic feed manufacturers to have to increase their wholesale feed prices at the same time.

"20 tons, Nansha, Lao Mo, address...phone number... OK, I'll deliver it this afternoon." As he was talking, Da Zhang suddenly remembered something and took out a booklet from the job application counter and handed it to Lao Mo:

"Lao Mo, take this technical manual. This new feed uses a new formula. The eel breeding cycle is the same as that of Hailufeng Company. Do you know that?"

"Nonsense, of course I know that." Lao Mo took the brochure and asked, "But your prices are so cheap, won't Hailufeng Company cause trouble for you?"

Da Zhang reminded again: "Our company has cooperation with them, and you need to buy feed from Hailufeng Company to remove the fishy smell in the future."

"What? Their feed is so expensive, why don't you produce it? And it's hard to get it! All the eel feed from Hailufeng Company is monopolized by those Chaoshan and Fujianese people." Lao Mo complained.

Da Zhang smiled and shook his head: "What do you think? Don't worry! This time, Hailufeng Company will not make ordinary fattening feed. Their products can be used by eel farms across the country."

This market segmentation situation is also a tacit understanding between Haida Group and Hailufeng Company.

Haida Group has no right to reject Hailufeng Company's request. After all, providing a market for fattening feed is already taking care of Haida Group.

Hailufeng Company must occupy the high-end products in the feed industry in order to maintain its high profits.

This kind of product does not require a large output but has high profits. It is not only very profitable but also not easily affected by sudden market changes.

For example, now the price of eel fattening feed has dropped to 1.15 yuan per ton, but the price of eel fishy removal feed is still as high as 1.7 yuan per ton, however, the production costs of the two are similar.

Lao Mo is only considering it from the perspective of a breeder. Naturally, he hopes that the price of feed will be as low as possible.

It’s a pity that Hailufeng Company is reaping the benefits of technology.

I can monopolize the market, so why should I lower prices for promotions?

Lao Mo was just about to continue complaining.

But Da Zhang had already turned around to receive another guest.

"Boss! What kind of feed do you want?"

The middle-aged man in a leather jacket frowned and asked, "Will your new feed add an earthy smell?"

Da Zhang explained with a smile: "Don't worry! As long as you stop using it for two months before releasing the fish from the market or the pond, it will basically be normal and there will be no obvious earthy smell."

"Is it true?" The man in the leather jacket was still doubtful.

"How dare a company as big as ours do something that damages our reputation?"

The man in the leather jacket scratched his head. "We have to stop using chicken feed too? My yellow-feathered chickens have only been raised for more than 50 days!"

"It would have been better if you had said earlier that you didn't even raise chickens." Da Zhang smiled bitterly and shook his head: "Then, the yellow-feathered chicks No. 3 and No. 4 are cheaper than before, 100 yuan cheaper per ton, just feed them normally."

"Can it be cheaper?"

"Brother, our feed is already the cheapest in the market. If you go to other feed factories, you will find that they are generally more expensive than ours."

The two men argued for more than ten minutes before they ordered 50 tons of feed.

Although the new feed can only be used temporarily, it is like a blessing after a long drought for farmers and even large-scale breeding farms who have suffered from high feed prices for a long time.

Especially the 271 medium and large pig farms in Lingnan region with a pig inventory of more than heads, many of them have direct cooperative relations with Haida Group.

Haida Group also knows that these big customers are the core, and it notifies these medium and large pig farms in advance as soon as the new feed comes out.

Of course, Haida Group would not go after those pig farms that already have their own feed mills.

Although a large part of pig feed is extruded corn feed, pigs cannot eat only corn or soybean meal during the breeding process, otherwise they will suffer from malnutrition, which will affect their growth rate and quality.

Pig farms are certainly very welcome to cheap feed.

Haida Group also sent people to provide technical guidance to prevent them from using it indiscriminately, which would increase the earthy smell of the pork.

Over time.

In South China, Haida Group's new feed quickly replaced the products of other feed manufacturers. Only some feed products that Haida Group did not involve, such as ornamental fish, golden coin turtles, pet feed for cats and dogs, or special feed produced by Hailufeng Company, were not affected.

Haida Group, which has multiple production bases across the country, has only expanded its presence in South China because the breeding of Egyptian catfish is currently limited to South China.

Other feed production bases must wait until the fish meal is transported before they can start producing feed with new formulas.

But the South China region alone brings terrible pressure to other feed manufacturers.

Originally, everyone's prices were very close to the cost line, but Haida Group's product prices were reduced significantly.

Especially for aquatic product feed, the reduction range is between 10% and 15%, which has suddenly shocked other feed factories in terms of aquatic product feed.

Among domestic feed manufacturers, several of the top ten are headquartered in the Lingnan region, such as Hengxing Group, Guangdong Ocean Shipping Group, and China Aoyuan Group.

All we can say is that they are too insensitive to market changes.

It was not until Haida Group’s new feed was launched on the market on a large scale that they discovered the problem and are now in a passive position.

A port city on the Leizhou Peninsula.

The headquarters of Hengxing Group is located here.

"Chairman, this is the information our market research department has just collected. Please take a look." Looking at the report in his hand, Chen Dan's face became more and more solemn: "Haida Group? Hailufeng Company? Oh... So it's the company that developed the artificial breeding technology for eels..."

Deputy General Manager, Chen Gang, who is also Chen Dan’s son, also had a very serious expression on his face: “Dad, although we have our own aquaculture industry, feed is also the core industry of Hengxing. If we don’t find a solution, our feed will be overwhelmed by Haida Group.”

"It seems that the key to this matter lies in Hailufeng Company. Breeding Egyptian catfish as feed raw materials? This is indeed a good idea." Chen Dan put down the document and squinted his eyes to think.

"Dad, we can also raise Egyptian catfish." Chen Gang suggested anxiously.

Hearing this, Chen Dan shook his head: "You think things are too simple. Why would Haida Group choose to cooperate with Hailufeng Company?"

Chen Gang frowned and said, "Huh? It shouldn't be difficult to breed Egyptian catfish, right?"

Du Haitang, the other deputy general manager in charge of aquaculture, quickly explained to the young master: "Deputy General Manager Chen, you don't know that Egyptian catfish are indeed very easy to breed, especially for our Lingnan region, but the only way to achieve a yield of 12 to 15 tons per mu in three months is to use Hailufeng Company's No. 4 feed."

Chen Gang didn't even think about it and blurted out: "Then why don't we buy their feed and imitate it?"

Du Haitang couldn't help but complain in her heart, but she still explained with a smile on her face: "Vice President Chen, Hailufeng Company has registered hundreds of patent formulas for special feed formulas for feeding Egyptian catfish. We are not a small company. Once we start large-scale production, even if we use it ourselves, the other party will find out and we will be sued by them."

"Hundreds of patented formulas?" Chen Gang's eyes widened. "Damn! Have they blocked all the formulas for the Egyptian catfish?"

"Yes! Even if we make minor adjustments, there is no way to avoid it. In the confirmation of infringement of feed formula patents, as long as there is a high degree of similarity and specific ingredients are used, it will be considered an infringement." Xiao He, another deputy general manager in charge of the feed industry, is more clear about it as a professional.

Whether patent protection of feed formula constitutes infringement depends mainly on the similarity of ingredients and feeding efficacy.

It is not the case that just by adding some soybean meal, corn or the like, you can say that this is a new formula.

The trace ingredients are very critical.

This is also the key means for Hailufeng Company to build a patent moat, which is to incorporate all similar special trace functional ingredients into the patented formula.

Among hundreds of patented formulas, there is always one that can block other companies' imitation formulas. If you want to bypass the ingredients of the patented formula, you can only do so by weakening the efficacy of the feed.

But the purpose of a copycat formula is to achieve the same effect, so what’s the point in changing it to a low-end version?

Chen Dan opened his eyes and made a decision on the spot: "Xiao He, go to Shanmei as soon as possible to negotiate with Hailufeng Company. We can accept the same conditions as Haida Group."

"Okay, Chairman." Xiao He nodded.

In addition to Hengxing Group, Guangdong Ocean Shipping Group and China Aoyuan Group also responded and, taking advantage of their proximity to Shenzhen, dispatched negotiation teams to Shantou first.

As the instigator, Haida Group certainly knows that other feed manufacturers will not sit idly by. However, Haida Group, which has already seized the initiative, is not too worried.

Because the first bite of this opportunity will be taken by Haida Group.

Even if other feed manufacturers obtain the technical authorization of Hailufeng Company, it will take at least three or four months to adjust the production line and research new formulas.

Moreover, Haida Group is very cunning. They learned from Hailufeng Company and quickly registered hundreds of patents in the past few months. These patents all use related feed formulas of Egyptian catfish meal and fish oil.

By then, if other companies want to produce feed using Egyptian catfish fish meal and fish oil, they will most likely infringe on Haida Group's relevant patents.

Other feed manufacturers will soon discover this problem. In order to quickly produce new feed, they can only come to Haida Group for help. Although this is a bit excessive, when doing business, sometimes you have to do whatever it takes.

Of course, Haida Group also knows that this kind of thing cannot be taken too far. When the time comes, they can just let other feed manufacturers pay patent fees. Their company can make money without doing anything and avoid pushing these feed manufacturers to the opposite side.

In fact, patents are a double-edged sword for large groups.

If used well, it can provide support for the company's development.

If used improperly, it can easily arouse hostility from competitors and may also lead to laziness within the company.

It was only in the past twenty years that China began to pay attention to patents.

If it was more than a decade ago, many companies did not pay attention to patents. They not only copied information from domestic companies, but also copied patents from foreign companies.

But that era of wild growth is long gone.

Nowadays, if you copy other companies’ patents casually, the consequences will be very serious.

Just when major domestic feed manufacturers sent negotiation teams to Hailufeng Company or Haida Group.

There has also been some reaction in the international market.

Although Haida Group currently only produces 5 tons of fish meal.

But don't forget, these are only the first five days of February and production will continue.

Although Haida Group has already controlled the scale of catfish farming in Egypt, it will still produce 15 to 20 tons of fish meal every month and 180 to 240 million tons of fish meal every year.

This scale accounts for about one-third of the world's total fishmeal production capacity.

The amount of fish meal imported into China each year is approximately 140 to 180 million tons.

In other words, the country will no longer need to import fish meal on a large scale in the future, and may even be able to export it in the opposite direction. This will be a fatal blow to the global fish meal market.

Even last year, due to the sharp drop in production in Peruvian fisheries, the global fishmeal production capacity dropped by 30%. Now, in response to the fishmeal production capacity of Haida Group, the international fishmeal price has also fallen.

Whether it is Hokkaido fish meal, Peruvian fish meal, Newfoundland fish meal or North Sea fish meal, prices are plummeting.

In just less than a week, the international fish meal price was cut in half.

Peruvian fish meal with a crude protein content of 67% has plummeted from 1.7 yuan per ton at its peak last year to around 8300 yuan per ton. However, this price has not stabilized, but has shown a trend of continuing to fall.

The reason for this situation is that China is the world's largest fishmeal importer, consuming one-third of the global fishmeal production capacity each year. Now this market suddenly no longer needs it, and the consequences are very serious.

Lima, the capital of Peru.

Many fishmeal producers were planning to go out to sea to fish in advance to avoid extreme weather and the same huge production cuts as last year.

However, dozens of companies engaged in deep-sea fishing all stopped at the same time.

Inside the office building of a fishmeal production company in the port of Lima.

The head of its international market research department knocked on the door in a hurry, holding a document that had just been sent back from East Asia. He said with an extremely serious expression: "Mr. Oster, I think it is necessary to reduce the scale of sea fishing this year."

As the general manager of the Peruvian branch of Austral Group SAA, Austin Oster also had a headache after reading the documents.

After holding the document and looking at it left and right for more than ten minutes, Austin Oster knew that trouble was coming and quickly prepared to call back to headquarters.

However, the headquarters called in advance.

Ring ring ring…

"Hi, I'm Austin."

"Austin, headquarters has decided to reduce the catch in the Peruvian fishing grounds this year by 50%."

"So many?" Austin was shocked.

"The headquarters has just studied the prospects of new technologies in East Asia and found that their production costs are very low. We cannot win a price war. We must respond. Reducing production in advance can slow down the decline in fishmeal prices."

"I understand."

Also in the port of Lima, Copeinca, Diamond Fisheries and Exalmar Fisheries have decided to reduce production.

Other major fishmeal producers in the world, including Norebo Group in Lucia; Colpesca AG in Chile; Skagen FF in Denmark; Omega Protein in America; Nissui Corporation in Japan; and United Group in Siam, have all made decisions to reduce production to varying degrees.

Even some fish meal manufacturers that produce and sell their own fish meal are considering adjusting their product structure, and at the same time they must be prepared to be impacted by large amounts of cheap fish meal and fish oil.

After all, fish meal and fish oil are highly related industries. Even those engaged in the deep processing of fish oil will probably find it difficult to remain immune to this market impact.

In order to survive, many companies are already looking for ways to further process their products.

(End of this chapter)