Core view
The growth rate of pig feed dropped significantly, and the national feed growth rate in Q1 was 3.1%. In 2022q1, China's total feed output was 67.2 million tons, with a year-on-year increase of 3.1% and a month on month decrease of 14.0%. The overall level was at a high level since 2018, but the year-on-year growth rate was less than 20.7% in 2021. By item, pig feed, egg poultry, meat poultry, aquatic products and ruminant were + 1.2%, - 0.6%, + 2.0%, + 37.2% and + 7.9% respectively. Among them, the growth rate of pig feed decreased significantly, and the year-on-year growth rate reached 75.9% in 2021, so the growth rate of total output was under pressure.
The production capacity was reduced and the feeding of piglets and sows decreased significantly. 2022q1 pig feed output was 31.37 million tons, with a year-on-year increase of 1.2%, of which piglet feed and sow feed decreased by 8.8% and 22.3% respectively, and fattening pig feed increased by 17.9%. From the perspective of stock, the early production capacity is still releasing inertia. By the end of 2022q1, the stock of non breeding pigs reached 380 million, with a year-on-year increase of 2.1%; The continuous loss led to the reduction of production capacity. There were 41.85 million sows in stock at the end of 2022q1. The year-on-year growth rate ended the positive growth of nearly eight quarters, a decrease of 8.3% compared with the end of 2021q2. In terms of pig feed consumption in various regions, the Central South region increased by 7.9% year-on-year, and the southwest region was the same; The East, North and northwest decreased by 15%, 13.6% and 2.8% respectively year-on-year, indicating that the East and North regions are the first to enter the stage of capacity removal.
Poultry materials have warmed up, the peak season of aquatic materials has been advanced, and the demand for rumination has improved. In terms of poultry feed, the price of poultry eggs and meat has continued to pick up recently, driving the enthusiasm of poultry breeding to supplement the fence. The poultry feed has gradually come out of the downturn. In 2022q1, the feed output of egg poultry and meat poultry decreased by 0.6% and increased by 2.9% respectively. In terms of aquatic feed, the market is better than in previous years, showing the characteristics of early peak season. The output of aquatic feed in 2022q1 is 3.52 million tons, with a year-on-year increase of 37.2%; In terms of ruminant feed, the industrial benefits continued to improve, and the breeding enthusiasm increased. In 2022q1, the output of ruminant feed was 3.76 million tons, a year-on-year increase of 7.9%.
Raw materials rose sharply and feed costs rose to a higher level. Affected by the drought in South America, the conflict between Russia and Ukraine and other factors, the bulk Shenzhen Agricultural Products Group Co.Ltd(000061) prices outside China continued to rise, driving the rise in feed prices. In 2022q1, the price of compound feed for pigs, layers and broilers increased by 4.3% ~ 6.6% year-on-year, and the price of concentrated feed increased by 4.0% ~ 4.6% year-on-year. According to the calculation of China Feed Industry Association, the average price of corn in Q1 decreased by 49 yuan / ton year-on-year, and the average price of soybean meal increased by 486 yuan / ton year-on-year. Increase the cost of compound feed and concentrated feed by about 172 yuan / ton and 243 yuan / ton respectively. The feed cost per kilogram of pork, chicken and eggs will be increased by 0.6 yuan, 0.5 yuan and 0.3 yuan respectively.
Investment proposal and investment object
Judging from the feed output data in the first quarter, the current pig breeding industry is in a state of de production capacity and high supply. We believe that the short-term industry price is difficult to improve significantly, and the industry loss will continue. At the same time, the rising feed cost will further reduce the profit expectation. We still recommend the allocation opportunities of pig breeding sector under the weekly reversal expectation, and pay attention to Muyuan Foods Co.Ltd(002714) , Wens Foodstuff Group Co.Ltd(300498) , New Hope Liuhe Co.Ltd(000876) , Fujian Aonong Biological Technology Group Incorporation Limited(603363) . In addition, under the background of the bottom of the breeding cycle and the upward crisscross of the bulk Shenzhen Agricultural Products Group Co.Ltd(000061) cycle, the operating difficulties of small and medium-sized feed enterprises have increased, the advantages of leading feed enterprises in procurement and service are more prominent, and the market share is expected to continue to increase. Pay attention to Guangdong Haid Group Co.Limited(002311) , Wellhope Foods Co.Ltd(603609) .
Risk tips
Shenzhen Agricultural Products Group Co.Ltd(000061) price fluctuation risk, epidemic risk, policy risk, industry competition and product risk
