Main points:
There is a resurgence of enthusiasm for pig breeding, and the inflection point of pig cycle in 2022 still needs to be observed.
① Looking back on the past three complete downward cycles of pig prices, the loss duration and loss range of each cycle are very different. From April 2008 to April 2010, foot-and-mouth disease broke out in the late stage of pig price decline, and the pig food ratio was lower than 5.5 for 17 weeks; During the downward period of pig prices from May 2016 to may 2018, due to the outbreak of non plague in August 2018, the pig food ratio was lower than 5.5 for only 7 weeks. Different from the above two downward cycles, there was no serious epidemic in the downward period of pig prices from September 2011 to April 2014. The pig food ratio was lower than 5.5 for 39 weeks, and the pig food ratio was between 5.5-6.0, and the breakeven point was 64 weeks. In the current downward cycle, from January 2021 to now, the pig food ratio is lower than 5.5 for only 9 weeks. If there is no serious epidemic in the later stage, the loss time is insufficient. ② From October 2019 to May this year, the stock of fertile sows in China continued to rise month on month, corresponding to the rise of pig sales before May next year, and pig prices are expected to continue to fall after the Spring Festival. In June this year, the number of fertile sows in China was at an inflection point, and the number of fertile sows decreased by 5.7% month on month from July to October; However, since October, pig prices have risen more than expected, resulting in a resurgence of enthusiasm for making up fences, which can reduce or reverse the month on month decline trend of breeding sows. In addition, with the clearance of inefficient sows, the efficiency of breeding pigs continues to improve, and a large amount of pork imports need to be digested for two consecutive years, and the inflection point of pig cycle still needs to be observed. We judge that if there is no serious epidemic in the pig industry, the pig price will be relatively low in 2022, the industry is still in the stage of capacity clearing, and the investment opportunities in the pig breeding sector need to trade time for space.
The production capacity of white feather and yellow feather has decreased, and the price of bird chain is expected to rise moderately in 2022.
① In 2020, the ancestral renewal of white feather broilers in China will be 1 million sets, with a year-on-year decrease of 18%. The price of white feather broilers is expected to stabilize and recover in 2022; However, from January to October this year, the ancestral renewal of white feather broilers in China reached 1047100 sets, a year-on-year increase of 31%, and the chicken price may decline again in 2023. ② Affected by the covid-19 epidemic, increased production capacity and other factors, the loss of the yellow feather broiler industry in 2020 was second only to that in 2013 impacted by the "human infection h7n9 epidemic", and the stock in the ancestors began to decline from the middle of 2020. From 2020 to 2021, the yellow feather chicken industry suffered an overall loss, and the industry continued to lose production capacity. As of the 46th week of this year, the stock of yellow feather's parents' generation was 13.436 million, and the sales of yellow feather's parents' generation chicken seedlings were 1.098 million, all at the lowest level since 2018. The price of yellow feather chicken is expected to rise moderately in 2022.
Raw material prices may remain high, and the commercialization of GM is gradually approaching.
① Corn and soybean meal prices may remain high. According to the prediction of the market early warning Expert Committee of China's Ministry of agriculture and rural areas, the national corn balance in 21 / 22 is 240000 tons. We expect that the corn price is expected to remain relatively high in 2022. China's soybean is highly dependent on imports. Since the global soybean warehouse consumption ratio in 21 / 22 is at the low level since 16 / 17 and the global soybean meal warehouse consumption ratio is at the low level since 11 / 12, the prices of China's soybean and soybean meal are expected to remain relatively high in 2022. ② We judge that the commercialization of genetically modified maize is gradually approaching, and the specific effects are as follows. (i) Genetically modified corn seeds may be sold in the second half of 2023. Some green channel varieties can be sold in the second half of next year. The revised draft is estimated to be approved within this year or early next year. According to the revised draft, if it is within the suitable planting area, only one-year productive experiments should be carried out. Therefore, seed production should be carried out as soon as 2023, and then in the second half of 2023 Start sales; (II) the corn seed industry is expected to expand. The promotion area of genetically modified corn in China is expected to eventually reach 400-500 million mu. If the gene patent fee of 10 yuan per mu can correspond to a revenue of 4-5 billion yuan, the corn seed industry is expected to expand; (III) the leaders of the seed industry are expected to benefit fully. Beijing Dabeinong Technology Group Co.Ltd(002385) , Yuan Longping High-Tech Agriculture Co.Ltd(000998) the traits of genetically modified corn have obtained biosafety certificates; Shandong Denghai Seeds Co.Ltd(002041) It has high-quality maize germplasm resources, and the quality of germplasm resources is very important to the quality of transgenic varieties; As a global agricultural technology giant and China's national seed team, Syngenta ranks third in seed business and first in plant protection business in the world. Syngenta is one of the companies with the richest seed product portfolio in the world. It has developed more than 6000 seed products with independent intellectual property rights, and established more than 100 breeding and germplasm improvement centers in major seed markets around the world, The annual R & D cost is nearly 10 billion yuan. We judge that Beijing Dabeinong Technology Group Co.Ltd(002385) , Yuan Longping High-Tech Agriculture Co.Ltd(000998) , Shandong Denghai Seeds Co.Ltd(002041) and Syngenta are expected to stand out in the commercialization process of China's transgenic seed industry. As it will take time for production experiment, variety approval and performance fulfillment, we judge that the seed industry sector will fluctuate upward.
China's pet market has great potential, and the epidemic has dragged down the gradual end.
From 2010 to 2020, the scale of China's pet consumption market rose sharply from 14 billion yuan to 206.5 billion yuan, with a compound annual growth rate of 30.9%. In 2020, the scale growth of China's pet consumption market slowed to 2%, and it will still maintain a low growth rate in 2021. We believe that the main reason for the slowdown in growth from 2020 to 2021 is that the outbreak of covid-19 has significantly increased the downward pressure on the economy and delayed the entry of potential PET consumers into the market. In the medium and long term, the penetration rate of pets in China is 17%, while that in the United States, Australia, Britain and Japan is as high as 68%, 62%, 45% and 38% respectively; The number of dogs and cats per capita in China is 0.03 and 0.04 respectively. The annual consumption expenditure of pet dogs and cats in China is US $869 and US $679 respectively, which are lower than that of major pet breeding countries. China's pet consumption market has great growth potential. It is recommended to Yantai China Pet Foods Co.Ltd(002891) and Petpal Pet Nutrition Technology Co.Ltd(300673) .
Risk statement
Epidemic situation; The reversal of pig price was later than expected; Grain prices fell more than expected.
