The Spring Festival is approaching. It is the time when every family prepares for the new year’s goods. It is also the traditional peak season of pork consumption. So how is the pork price this year? Is consumer demand strong?
pork prices halved in a year
has experienced five rounds of cyclical ups and downs in the past 20 years
Liu Changli is a pork retailer in Nanyang farmers’ market in Henan Province. She has been selling pork for 30 years. According to her, pork prices are still falling near the Spring Festival. Compared with the eve of the Spring Festival last year, pork prices have fallen sharply.
Not only are retailers sensitive to pork prices, but wholesalers also feel that after the decline in meat prices, sales have increased significantly.
Xiong Chenying, a consumer of Hanye farmers’ market in Nanyang City, Henan Province: I bought more pork this year because it was cheap. You may buy one twice or three times a week, and you may buy it once a week last year.
According to the latest data of the Ministry of agriculture and rural areas, the price of pigs in the third week of January 2022 decreased year-on-year and month on month. The average purchase price of pigs in China was 15.98 yuan / kg, down 2.1% month on month and 56.0% year-on-year. According to insiders, pig prices fluctuate periodically. In the past 20 years, China’s pig prices have experienced five rounds of cyclical ups and downs.
Muyuan Foods Co.Ltd(002714) Secretary Qin Jun: there are two reasons for the fluctuation of pig price. One is related to China’s consumption structure, because the consumption proportion of fresh meat in China’s consumption structure is particularly high. Second, small and medium-sized producers account for a large proportion in the industry, which has brought fluctuations in supply.
According to insiders, this round of pig cycle started in May 2018, and the upward cycle lasted for 27 months. The pig price rose from about 10 yuan / kg to nearly 40 yuan / kg. The downward cycle lasted from January 2021 to now, and the pig price fell from 40 yuan / kg to the lowest below 10 yuan / kg. The decline in pig prices has led to losses for breeding listed companies, Tech-Bank Food Co.Ltd(002124) announced that the net profit attributable to the parent is expected to lose 3.5 to 4 billion yuan in 2021, and another listed company Wens Foodstuff Group Co.Ltd(300498) announced that the net profit attributable to the parent is expected to lose 13 to 13.8 billion yuan.
pigs are eliminated, and the pigsty is empty
farmers “empty warehouse” to avoid pig cycle
Pork prices fell by half in a year, of course, consumers received tangible benefits, but on the other hand, from the perspective of industry, listed companies raising pigs began to lose money, and some small and medium-sized farmers also fell into a loss situation. It is understood that in order to reduce losses, many farmers have eliminated pigs and reduced production capacity.
When the reporter came to Wang Taifeng’s pig farm, he found that the pigsty was empty and couldn’t see a pig. Wang Taifeng switched from veterinary to pig raising in 2009, with 6000 pigs per year at the peak. Now, he emptied the piglets, sows and fattening pigs. According to his estimation, there will be a loss of about 1 million yuan in 2021.
The reporter met Ding ye at another pig farm in Nanyang City, Henan Province. He said that his pig farm can slaughter 60000 pigs at the peak, but now the slaughter volume has been cut to 30000. Like Wang Taifeng, he has the trouble of losing money.
Wang Taifeng and Ding ye are not the only farmers who have reduced their pig production capacity. Many farmers are eliminating fertile sows. According to the latest statistics of the Ministry of agriculture and rural areas, the number of fertile sows in China reached a peak of 45.64 million in June 2021, and then decreased to 43.29 million in December. Since raising pigs for more than a decade, Wang Taifeng has experienced three rounds of pig cycles and made overall profits after deducting losses. He concluded that the wind vane for making up fences is to observe the stock of fertile sows.
Industry insiders pointed out that the decline in the number of fertile sows since June last year is a positive wind vane, indicating that farmers are losing production capacity, and the relationship between supply and demand will be improved this year.
Muyuan Foods Co.Ltd(002714) Secretary Qin Jun: the stock of sows has decreased continuously, the whole pig price is in a relatively low position, and the consumption is slowly returning to the normal level. It is expected that the relationship between supply and demand will gradually improve after the second quarter or may and June next year, and the price can be expected to be more optimistic gradually.
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