Before the Spring Festival, it was originally the peak consumption season of pork, but pig raising enterprises were not happy.
Pig prices have been falling since January. On January 10, for the first time since the breeding of captive pigs this year, it fell below the breakeven line; In addition, according to the monitoring of the national development and Reform Commission, from January 10 to 14, the national average pig grain price ratio was 5.75 ∶ 1, entering the three-level early warning range of excessive decline; The decline continued. On January 18, according to the monitoring of China pig breeding network, the average price of domestic pigs (foreign three yuan) fell to 14.23 yuan / kg, down 13.65% from the end of last year.
Pig breeding enterprises that recorded huge losses last year are still suffering in January this year. In this context, there is a rumor that Jiangxi Zhengbang Technology Co.Ltd(002157) one of the leading pig breeding enterprises has a tight capital chain. The main content is a group of pictures flowing out of the Internet, saying that the company can quickly obtain cash and pay suppliers by handling breeding loans in the name of employees.
On January 18, the above rumors once caused the stock price of Jiangxi Zhengbang Technology Co.Ltd(002157) to plunge. In response, Jiangxi Zhengbang Technology Co.Ltd(002157) responded that the online content was inconsistent with the facts, the company's overall cash flow was stable, and there was no risk of capital chain rupture. We will reserve the right to hold the fabricators and disseminators accountable.
Jiangxi Zhengbang Technology Co.Ltd(002157) : the online "breeding loan" is inconsistent with the facts, and the company does not have the risk of capital chain rupture
Recently, Jiangxi Zhengbang Technology Co.Ltd(002157) there are rumors of tight capital chain. In a well-known stock investment community, a picture of Jiangxi Zhengbang Technology Co.Ltd(002157) asking employees to handle "breeding loans" spread, saying that the company can quickly obtain cash and pay suppliers in the name of employees to ensure the normal operation and development of the company. At the same time, the company promises to provide cash rewards to participating employees, with a maximum reward of 15000 yuan.
Affected by the above rumors, on the afternoon of January 18, Jiangxi Zhengbang Technology Co.Ltd(002157) shares plunged by nearly 5% and finally fell by 3.28%. Since January 11, the stock price of Jiangxi Zhengbang Technology Co.Ltd(002157) has fallen nearly 12%, leading the decline of pork stocks.
On January 18, Jiangxi Zhengbang Technology Co.Ltd(002157) responded that after verification, the content of the online transmission was inconsistent with the facts. The company's overall cash flow is stable, and there is no risk of capital chain rupture. The company will reasonably arrange the business plan and development rhythm on the premise of ensuring its own cash flow safety. For the false information about the company on the network, the company will reserve the right to investigate the legal responsibility of the fabricator and disseminator.
at the same time, Jiangxi Zhengbang Technology Co.Ltd(002157) explains the business model of "company + farm + settlement":
The competition pattern of China's commercial pig market is characterized by the continuous improvement of the concentration of large-scale enterprises, while the number of high-quality farmers is relatively limited in the industry, and the industry competition is gradually intensified. In this context, in order to fully mobilize the enthusiasm and sense of responsibility of farmers, make better use of the company's high-quality production capacity and give full play to the company's large-scale, systematic and improved breed advantages, the company upgraded and iterated the pig breeding mode to the "company + farm + settlement" mode, that is, the company will provide self built farms to farmers for use, the company will charge relevant fees, and provide pig seedlings, feed Veterinary drugs, etc.
When farmers use the company's farm, the company collects part of the funds according to the scale of the fence in order to protect the company's assets. The overall working capital of farmers mainly comes from the loans they apply for with financial institutions. Compared with the traditional mode of "company + farmer", the mode of "company + farm + settlement" is more conducive to the company's resource allocation, control and centralized management, as well as the company's production and operation management, cost improvement and breeding efficiency.
pig prices continued to fall, and the pig grain price entered the three-level early warning range of excessive decline
From the industry level, less than two months after hitting the bottom and rebounding, pig prices started a callback journey again. Since January 2022, pig prices have continued to decline. According to the monitoring data of the National Bureau of statistics, in early January 2022, the price of live pigs (external three yuan) was 15 yuan per kilogram, a month on month decrease of 6.3%.
According to the monitoring of China pig breeding network, on January 18, the average price of three yuan at home and abroad was 14.23 yuan / kg, and the pig price fell by 0.09 yuan / kg compared with the previous day, down 13.65% compared with the price at the end of December last year. In addition, according to the data of pig Yitong, the average price of pigs in China this week was 14.01 yuan / kg, down 8.78% on a weekly basis.
In addition, according to the monitoring of the national development and Reform Commission, from January 10 to 14, the national average pig grain price ratio was 5.75 ∶ 1, entering the three-level early warning range of excessive decline set in the working plan for improving the regulation mechanism of government pork reserves and ensuring supply and price stability in the pork market. At present, the pig production capacity is generally in a reasonable range. It is recommended that farms (households) scientifically arrange production and operation decisions to maintain the pig production capacity at a reasonable level.
It is understood that in June last year, the national development and Reform Commission, together with the Ministry of finance, the Ministry of agriculture and rural areas and other five departments, jointly issued the "plan for improving the regulation mechanism of government pork reserves and ensuring supply and price stability in the pork market". According to the plan, the pig grain price ratio adopts the ratio of the weekly pig exit price monitored and counted by the national development and Reform Commission to the average wholesale price of second-class corn in major wholesale markets in China. According to the production cost data in recent years, the pig grain price ratio corresponding to the break even point of pig production is about 7:1.
When the pig grain price ratio is lower than 6 ∶ 1, the national development and Reform Commission will issue a three-level early warning; When the pig grain price ratio is 5:1 ~ 6:1 for three consecutive weeks, or the number of fertile sows decreases by 5% year-on-year in a single month, or the cumulative decline of fertile sows for three consecutive months is 5% ~ 10%, a secondary early warning will be issued; When the pig grain price ratio is lower than 5:1, or the number of fertile sows decreases by 10% year-on-year in a single month, or the number of fertile sows decreases by more than 10% for three consecutive months, a first-class early warning will be issued.
When pigs are sold in panic on a large scale and the prices of pigs and pork fall sharply, temporary reserve collection and storage shall be implemented to effectively "support the market". Specific starting conditions: at the national level, temporary reserve collection and storage will not be started when the three-level warning of excessive decline is issued; Start as appropriate when issuing level II early warning; When the level-1 warning is issued, start the temporary reserve collection and storage. The collection and storage conditions for local temporary reserves shall be implemented with reference to the practices at the national level.
when will the pig price bottom out? Can I buy pork stocks?
In 2021, listed pig breeding companies generally suffered losses. In the first three quarters, Wens Foodstuff Group Co.Ltd(300498) , Jiangxi Zhengbang Technology Co.Ltd(002157) , New Hope Liuhe Co.Ltd(000876) suffered losses of 9.7 billion yuan, 7.6 billion yuan and 6.4 billion yuan respectively.
At present, the pig breeding industry has once again entered the loss range. On January 14, the profit loss of outsourcing piglet breeding was 38.8 yuan / head, the profit turned from profit to loss, and the profit loss of self breeding was 269.8 yuan / head. The month on month loss has accelerated and has been in the loss range for five consecutive weeks.
Why the recent decline in pig prices? Some research institutions pointed out that the main reason for the "low peak season" trend of pork consumption before the festival.
In the early stage, the oversold of pig prices in October 2021 "overdrawn" some consumption before the Spring Festival, and the implementation of policies such as "local new year" has significantly suppressed the centralized consumption of new year pigs and other pork. In addition, the significant increase in pig supply in the first quarter was also one of the reasons for the decline in pork prices.
on the whole, on the premise that the supply side is relatively abundant, the pig price may continue to fluctuate before the Spring Festival, and the upward space is limited. The decline of pork consumption after the festival may drag down the second bottom of pig price.
Huishang futures believes that the pig production capacity in the first and second quarters is still in the release cycle, superimposing the off-season of seasonal demand, and the pig price may bottom again; In the third and fourth quarters, due to the impact of the elimination of fertile sows and the recovery of demand, the mismatch between supply and demand may lead to the strengthening of pig prices again. However, neither spot nor futures can reproduce the fluctuation range in 2021.
Huarong Rongda futures said that from the number of fertile sows on hand in 2021, the number of fertile sows peaked in June 2021 and began to decline from July, but the overall breeding capacity was slowly depopulated. Corresponding to the high number of pigs in the first quarter of next year, the pork supply was still at an excess level, and the consumption was off-season after the Spring Festival, Pig prices may fall again and fall below the breeding cost line. The spot price will temporarily be 13-15 yuan / kg in March next year.
Shenwan Hongyuan Group Co.Ltd(000166) said that due to the continuous growth of fertile sows in the first half of 2021 and higher than the official regulation range (41 million), the "double bottom" of pig prices driven by abundant supply in the first quarter of 2022 should be "certain", and the breeding loss may last for a certain time. "The accelerated arrival of the second bottom of pig prices" will become a "more clear fundamental stimulus for capacity de industrialization". Therefore, it is expected that capacity de industrialization will continue from the first quarter to the second quarter of 2022, or even further acceleration will not be ruled out.
Huaxi Securities Co.Ltd(002926) analyst Zhou Sha believes that the most pessimistic time in the current industry expectation has passed, the downward trend of pig price will continue to eliminate the stock of breeding sows, and the inflection point of pig cycle will accelerate. From the current time node, the market value of some high-quality pig breeding stocks has dropped to a historically low level, and the configuration window has been gradually opened. Meng Xin, an analyst at Guosheng securities, pointed out that the pig breeding industry is generally pessimistic about the market in the first half of 2022. The breeding profit has suffered a comprehensive loss and the range has deepened, and the capacity reduction may be expected to accelerate. It is suggested to pay attention to the opportunity of cycle reversal.
