in the context of falling pig prices, breeding enterprises are facing another kind of suffering. Seeing the rise of feed prices such as soybean meal and corn, Sichuan farmer Zhu, like many local peers, changed the "diet" for his pigs. "Now we make our own feed. I use 4 tons of feed every day, which can save 6 Jiangnan Mould & Plastic Technology Co.Ltd(000700) 0 yuan a month."
China Securities News recently interviewed a number of farmers and market analysts to investigate the current breeding profit, market supply and demand and inflection point expectation of the pig market. It is learned that the current breeding enterprises are in a state of loss, and the market scale is on the rise. Analysts believe that the deviation between the stock of pig breeding sector and the price of pig futures deserves attention
"changing recipes" is not uncommon
Recently, a reporter from China Securities Journal interviewed a number of farmers and senior market researchers and learned that the phenomenon of "changing recipes" for pigs like Mr. Zhu is not rare among small and medium-sized breeding enterprises.
Mr. Zhu told the China Securities Journal that raising pigs is basically at the loss stage, and the more you raise, the more you lose. Now he consumes about 4 tons of feed for raising pigs every day. The prices of corn and soybean meal have risen all the way this year, hundreds of yuan (per ton) more than the same period last year. Feed is the largest part of the breeding cost. Now the pig price is not ideal, so we have to find ways to reduce the cost. "Many of our farms now use self ingredients, which can save 50-60 yuan per ton per day."
The reporter of China Securities Journal also contacted a breeding enterprise in Jiangxi Province, which usually has a breeding scale of about 400500 heads, and now only maintains a stock of more than 100 heads. Mr. Wang, the person in charge of the enterprise, said that feed accounts for about 40% of the cost of raising pigs. This year, feed prices have soared, and pig prices have been falling. "I buy piglets from outside to raise them. Now the overall breeding cost is about 7-8 yuan / kg, but the purchase price of pigs here has fallen to 6 yuan per kg. Raising a pig costs more than 400 yuan." According to Zhuo Chuang information statistics, as of April 13, the average selling price of Sanyuan pigs was 12.46 yuan / kg, up 1.32% month on month and down 46.02% year-on-year.
Soybean meal is the main raw material for pig breeding, followed by corn. Both prices have risen this year. According to Wenhua financial data, as of the closing on April 13, the main contract prices of soybean meal and corn futures in Dalian Commodity Exchange were reported at 3905 yuan / ton and 2917 yuan / ton respectively, with an increase of 20.45% and 9.17% respectively since this year.
According to the performance forecast or performance express of relevant listed companies in 2021, many listed pig enterprises such as Jiangxi Zhengbang Technology Co.Ltd(002157) , Wens Foodstuff Group Co.Ltd(300498) , New Hope Liuhe Co.Ltd(000876) and so on are in a state of loss in 2021.
"After the Qingming Festival, affected by the weak terminal demand, the operating rate of slaughtering enterprises in many places has decreased and more price reduction acquisitions have been made; at the same time, large-scale breeding groups have actively listed, which has jointly led to the decline of pig prices since the second quarter. However, due to the limited distribution of retail investors in some areas, the decline of pig prices is limited." Ma Liyuan, an analyst at Zhuo Chuang information, told the China Securities Journal.
scale up significantly
Mr. Zhu said that since last year, some small-scale farmers have withdrawn from the market, while large enterprises have more advantages in cost procurement and breeding technology, and the scale of the industry has been significantly improved.
\u3000\u3000 "The current pig cycle was launched in june2018. It will take about four years to the first half of 2022. The time span is similar to that of the previous pig cycles. The difference is that the price fluctuation in the previous pig cycle was mostly 10-20 yuan / kg, but the highest price in the current pig cycle rose to nearly 42 yuan / kg. Stimulated by the high price, large-scale breeding groups with strong financial strength actively expanded. The continued decline of pig prices in the later period led to the rapid withdrawal of retail investors and small and medium-sized farms, which accelerated the pig breeding in China "Large scale process." Ma Liyuan said.
From the current trend of pig price, since mid December last year, pig price has been in a continuous downward state. However, since March this year, the month on month decline of pig price has converged or even rebounded slightly. According to market participants, the state successively completed three rounds of collection and storage from March 3 to 4, March 10 and April 2 to 3 this year. In addition, the epidemic situation in some areas affected the slaughter and transportation of pigs, and the pig price rebounded slightly in early March. But after the Qingming Festival, pig prices weakened again.
"Recently, the listed pig enterprises have successively released the pig marketing data in March, and the market has some doubts about the current pig de capacity progress." LV pin, a pig analyst at Everbright futures, told the China Securities Journal that although the monthly slaughter volume of pigs of head enterprises performed well, the sales volume of most listed pig enterprises in March was less than one million. "At present, the market is still at the bottom of the fourth round of pig cycle since 2006. Large-scale pig enterprises have stepped up the marketing of pigs, the speed of pig production capacity is lower than expected, and there is no obvious improvement on the consumer side under the background of the epidemic. Many factors have lengthened the running time of this round of pig cycle."
capital "rush"
With the adjustment of pig price in the early stage, some smart funds have already "ambushed" the investment opportunities brought by the new inflection point of the cycle in advance.
Since this year, the A-share pig breeding sector has gone out of a relatively independent market. Data show that as of the closing on April 13, Shenwan pig breeding index has risen by 7.82% this year. If calculated from the starting point of this round of rebound last August, the index has increased by more than 40%.
The trend of pork stocks deviated from the price of pigs. According to Wenhua financial data, as of the closing on April 13, the main contract of pig futures of Dalian Commodity Exchange has fallen 17.5% this year and 28% since August last year.
"Although the current overall market sentiment is low, from the perspective of cashing in the production capacity of fertile sows, the current is the cashing time of the peak period of fertile sows, and the price is bound to be low. With the decline of the overall expected slaughter volume of pigs, the price center of gravity is still likely to move up and reverse the bottom." China Securities Co.Ltd(601066) futures pig industry senior analyst Wei Xin told China Securities Journal.
"As the weather turns hot and the demand decreases from April to June, it is expected that the pig price may still be low in the second quarter of 2022, and the inflection point of this round of pig cycle may appear in the third quarter of this year." Ma Liyuan said.
\u3000\u3000 "Since the beginning of this year, the price of pig concept stocks has risen as a whole. The stock market reflects the future development expectation of the industry and the valuation evaluation of the corresponding company. Funds make an improvement expectation for the company's profit in the second half of the year through the production capacity basis, but the spot price continues to be weak, and there is an obvious' split 'between expectation and reality. Stock market funds need to judge in advance and invest in the medium and long term, while the spot market is only aimed at the current supply and demand Judging from the situation, the trend of the two has been significantly differentiated. " Hubei Mailyard Share Co.Ltd(600107) futures pig industry researcher Zhang Ruihao said.
Market participants further pointed out that the rebound at the bottom of pig prices is often the beginning of the withdrawal of market funds and the decline of pork stock prices. Funds pursuing "short, flat and fast" will even withdraw before the rebound of pig prices.
