Since 2021, with the decline of pig price and meat price, the slaughter volume of pigs has been expected. Although the slaughter volume increased year-on-year in 2020, the fourth quarter, which should be the peak season, showed the second highest point in the whole year in mid October. The follow-up from November to December was insufficient, and the demand peak was overdrawn in advance.
According to the monitoring of Zhuo Chuang information, from November to early December, the average daily pig slaughter volume of China's key slaughtering enterprises was 168700, down 20.6% compared with the peak in October. Wang Yanan, an analyst at Zhuo Chuang information, told the Securities Daily that the decline in pig slaughter was due to changes in pig supply and product demand, and the main reason was still the low demand.
The Spring Festival in the year of the tiger is coming. Generally speaking, the Spring Festival will be the most prosperous time for pork consumption. What kind of market will pig slaughter and pork consumption go out next year?
the slaughter volume of pigs has eased and the peak season of recovery has not appeared
Looking back on 2021, under the background of centralized cashing of China's pig production capacity, both pig prices and pork prices are in a volatile downward trend. In this context, the pig slaughtering industry has been able to achieve a slow recovery.
Especially for companies without pig breeding business and with a high proportion of slaughtering business, the continuous decline of pig and pork prices since this year has brought good results to the company to some extent.
Taking Shandong Delisi Food Co.Ltd(002330) as an example, the company's financial data show that in the first three quarters of this year, Shandong Delisi Food Co.Ltd(002330) achieved an operating revenue of 2.761 billion yuan, a year-on-year increase of 6.94%, and a net profit attributable to the parent company of 41.08 million yuan, a year-on-year increase of 53.47%. The company said that the performance improvement was mainly due to the sharp decline in pig prices since this year, which led to the reduction of the company's procurement costs. At the same time, the company actively developed deep-processing business and improved market share and profitability.
In an interview with the Securities Daily, Liu Peng, the Secretary of the board of directors, said that although the price factor is important for slaughtering enterprises, the scale of slaughtering business is becoming more and more important. "On the whole, this year, the number of pigs stored and sold has been growing. For Shandong Delisi Food Co.Ltd(002330) such enterprises that have realized large-scale pig slaughter, there will certainly be better improvement and promotion."
According to the data monitored by Zhuo Chuang information, the average daily slaughter volume of national key slaughtering enterprises in 2021 was 142600, which recovered to a certain extent compared with the special period of high market and low consumption in 2020, with a year-on-year increase of 60.16%.
However, since October, it was originally the peak season of pork consumption, but there was a special situation that the slaughter volume of pigs rose against the trend in the early stage and "not prosperous in the peak season" in the later stage.
According to Wang Yanan's analysis, October originally belonged to the connection transition period between the off-season and the peak season, but the second highest point of the whole year appeared in advance. According to the monitoring data of Zhuo Chuang information, driven by the low price of pork and the centralized hoarding of consumers in the first half of October, the slaughter volume of live pigs rose against the trend, reaching a maximum of 212500 on October 14, with a cumulative increase of 16.63% in a week.
However, although the following November to December is the traditional peak consumption season, the slaughtering volume of pigs no longer has a momentum. Wang Yanan said that there was a brief reduction in supply in November, but the real reason for the decline in slaughtering volume in peak season is not the shrinkage of supply side production capacity. "At present, it is difficult to increase slaughtering volume, and the main reason is still the restriction of terminal demand." Wang Yanan said that in October, the popularity of consumers' follow-up sausage overdrawn part of the demand from November to December. In addition, the warmer pork price and low demand in the fourth quarter were also the reasons for the low slaughter volume in the fourth quarter.
pig prices may still decline in the first quarter of next year
The Spring Festival of the year of the tiger is coming. Will the next pork price rebound? What will be the development trend of the industry next year?
In this regard, Wang Yanan believes that from the perspective of slaughter volume, the first quarter of next year may show a trend of first rising and then falling and consolidation. It is expected that from mid to late January 2022, all localities will prepare goods for the Spring Festival, and the pig slaughter volume may rise to the high level of the whole year of 2022, and become the only consumption boosting factor in the first quarter of next year. "After the Spring Festival, the market demand shrinks, and the slaughter volume may fall rapidly. It may be adjusted at a low level from mid February to March next year."
At the same time, in the case of relatively sufficient pig production capacity, the number of pigs sold in the first quarter of next year is still at a high level, which has a double negative impact on the market. Zhuo Chuang information expects the pig price to fluctuate and fall in the first quarter.
So when will the "inflection point" expected by the industry come? In this regard, Li Jing, an analyst of Zhuo Chuang information industry, said in an interview with the Securities Daily that 2022 is undoubtedly a year for the continuous release of production capacity, but in the second half of 2021, farmers have eliminated backward production capacity, and some small households have reduced production and delisted. If calculated according to the process of eliminating sows, it is expected that the downward cycle or phase out will be completed in 2022.
However, some analysts in the interview believe that the slight rise in the price of pigs and pork at the end of this year may also slow down the process of eliminating sows. Therefore, whether the "inflection point" will come from May to June next year as expected by the industry depends on whether there will be other sudden factors in the market.
(Securities Daily)
