Core view
China Feed Industry Association announced the national feed production situation in April. According to the data of sample enterprises, in April 2022, the total output of industrial feed in China was 22.49 million tons, a month on month decrease of 3.7% and a year-on-year decrease of 10.8%. In terms of sub items, the growth rate of pig feed decreased significantly, with a month on month decrease of 4.7% and a year-on-year decrease of 15.2%, both higher than the overall decline of feed; Egg poultry and meat poultry decreased by 4.0% and 3.3% month on month respectively; Aquatic feed increased by 2.7% and ruminant feed decreased by 7.8%. From January to April 2022, the total output of industrial feed in China was 89.69 million tons, a year-on-year decrease of 0.8%.
The decline of pig feed has expanded significantly, reflecting that the stock may decline. In April, the output of pig feed was 9.63 million tons, a month on month decrease of 4.7% and a year-on-year decrease of 15.2%. The year-on-year decrease of pig feed output in March was 2.2%. The trend decline of pig feed output may reflect the decline of current industry stock. From the data of fertile sows, fertile sows showed the first month on month decline in July 2021, corresponding to the marginal decline in pig supply after 10 months. At the same time, pig prices have continued to rise since April, and many factors reflect that the current industry supply has shown signs of decline. In April, the number of fertile sows decreased by 2% month on month. We estimate that the year-on-year decrease is about 4%, which is further expanded compared with the year-on-year decrease in March. We believe that the subsequent pig supply center may gradually respond to the decrease of sows in the early stage, and the pig price may gradually reverse upward.
The prosperity of poultry and ruminant materials is under pressure, and aquatic products continue to increase. In April, the output of egg and poultry feed was 2.52 million tons, down 4.0% month on month and 9.4% year-on-year; The output of meat and poultry feed was 7.05 million tons, a month on month decrease of 3.3% and a year-on-year decrease of 12.1%. In April, the poultry feed failed to continue the restorative growth momentum in the early stage and fell down year-on-year. We believe that it is mainly due to the relatively flat increase in the price of poultry and the continuous rise in the price of raw materials, which restricts the demand for poultry feed. Ruminant aquatic products showed differentiation. In April, the output of aquatic feed was 1.9 million tons, with a month on month increase of 2.7% and a year-on-year increase of 25.2%, maintaining a relatively high boom; The output of ruminant feed was 1.15 million tons, down 7.8% month on month and 4.4% year-on-year.
Raw materials are still at a high level, and the ex factory price of feed continues to increase. In April 2022, the ex factory price of main compound feed and additive premixed feed products increased steadily and slightly month on month, and the ex factory price of main concentrated feed products decreased month on month. As the price of main raw materials is still high compared with the same period last year, the ex factory price of products continues to increase year-on-year. In April 2022, corn accounted for 40.8% of the compound feed produced by feed enterprises, with a year-on-year increase of 0.7 percentage points; The consumption of soybean meal in compound feed and concentrated feed accounted for 15.0%, with a year-on-year increase of 0.2 percentage points.
Investment proposal and investment object
We believe that the reversal of pig price will still come as scheduled, and the leading targets will gradually realize their performance with the rise of pig price. It is suggested to actively pay attention to the allocation opportunities for leading stocks with clear cost advantages and improvement trend and high certainty of listing volume expectation to enter the second stage of the cycle.
Risk tips
Shenzhen Agricultural Products Group Co.Ltd(000061) price fluctuation risk, epidemic risk, policy risk, industry competition and product risk
