Farmer's Daily: Understanding the dimensions of the current situation of the pig industry

 　　On October 21, the "2021 China Agriculture and Animal Husbandry Industry (Derivatives) Conference Pig Forum and the First China Pig Trade Conference" co-sponsored by the Dalian Commodity Exchange, the National Pig Market, and the National Pig Technology Innovation Center was held in Chongqing
.
With the theme of "Combining Expectations and Currents with Dual Drivers to Help Break the Pig Cycle", the conference arranged keynote speeches such as "China's economy moving forward under severe and complex conditions" and "China's pig industry status and future prospects"
.
Speakers came from all levels of the industry and delivered the latest views representing the current development of China's hog industry
.
These views have also been highly recognized by the participants and are worthy of industry attention
.
MYr China Feed Industry Information Network-Based on feed, serving animal husbandry

　　1.
Too much porkMYr China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Regarding the current situation and future prospects of China's hog industry, Zhu Zengyong, chief expert of international livestock production and trade monitoring and early warning of the Ministry of Agriculture and Rural Affairs, believes that the slowdown in GDP growth and the aging population in the past five years have significantly changed hog production
.
At the beginning of the "13th Five-Year Plan" period, the overall pork consumption trend has declined, mainly due to the substitution of poultry meat
.
From the perspective of factors such as meat production structure, population and urbanization rate, the overall and per capita pork consumption demand in the future will steadily decrease
.
50 million to 52 million tons per year can be satisfied
.
MYr China Feed Industry Information Network-Based on feed, serving animal husbandry

　　In 2021, especially in the second half of the year, the entire pork supply will be loose and will not change in the short term
.
The industry must have a clear understanding of this and must have a rational judgment on the current situation
.
The demand for breeding sows of 43 to 44 million heads will also decline in the future, and the advantageous production areas have a tendency to shift to the southwest
.
Since June this year, the number of reproductive sows has been reduced for three consecutive months, and the reduction has been increased, but the number of reproductive sows has remained high
.
From the perspective of breeding subjects, retail and small households have stepped up efforts to eliminate breeding sows from June
.
However, July and August were still at the peak of breeding sows.
The supply of piglets continued to increase from January to September, and reached the peak of this year's piglet supply in September
.
The pig price bottomed out on October 7 and rebounded, but this rebound was phased
.
Maintain a rational attitude towards the fourth quarter market
.
It is estimated from the whole year's sales volume that there will be a significant growth trend overall in the fourth quarter
.
The latest warning information from the Ministry of Agriculture and Rural Affairs predicts that the price downturn will last until the first half of next year, and the current breeding entities must control the stock
.
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　　From the perspective of different main breeding structures, many companies have undergone light-asset expansion after the epidemic.
This type of enterprise suffers large losses when the pig price is low; and a large number of ultra-high single-scale breeding plants have appeared in some places.
Rare situation
.
The average cost of the entire industry has increased from last year
.
Starting in June, the entire industry started to lose money
.
The current capacity reduction has just begun, but this reduction is only two to three months, and the reduction in capacity will increase after the loss in September
.
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　　Zhu Zengyong believes that when many farmers, including enterprises, face market fluctuations, especially after the long-term high price stimulus in 2020, it is difficult to treat the current adjustment with a normal attitude
.
MYr China Feed Industry Information Network-Based on feed, serving animal husbandry

　　2.
Too much poultry meatMYr China Feed Industry Information Network-Based on feed, serving animal husbandry

　　According to Cai Huiyi, director of the National Biological Feed Engineering Center, the feed industry has been at a relatively stable plateau in the past ten years, with an annual growth rate of close to 5%
.
The increase has been significant since last year, with total output increasing by 10% year-on-year
.
The total output of industrial feed reaches 250 million tons
.
Among them, concentrated feed increased by 22%, and additives and premixes increased by nearly 10%
.
It shows that large-scale farming is growing
.
The actual total feed consumption is nearly 400 million tons, except for 250 million tons of industrial feed, the rest is self-made by the breeding enterprises
.
Among them, the growth of pig feed is still the first place, but the meat and poultry feed jumped to the second place, a record high
.
With the fluctuation of the breeding industry cycle, in addition to the pig cycle, the broiler has also formed a cycle, because the relationship between supply and demand has changed greatly
.
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　　Chen Wei, Executive Vice President and Secretary-General of China Meat Association, gave a speech on the forum with the title "China's pork processing consumption status and development trend", but he said, "The meat industry cannot take out the pigs alone.
I still want to report.
The overall development of the meat industry
.
” It can be seen that insisting on “sluggish consumption” is actually a misunderstanding
.
Now it is understood that "pig food will secure the world" should mean "every grain will secure the world"
.
The era of "pork" dominating the meat market supply is over
.
The balanced development of "many" meats is the fundamental change brought about by the normalization of the "two epidemics"
.
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　　Chen Wei said that with the decline in pork production caused by the disease, the production of poultry meat has increased significantly, and a good complementary effect has been formed between pigs and poultry
.
It can be seen that poultry meat is worth considering at the strategic level
.
China's meat consumption has exceeded the global average consumption of 50 kg per capita, reaching 60 kg, but the basic meat consumption per capita in developed countries is 80 to 85 kg
.
The main gap lies in pork processing
.
Shuanghui pork cuts more than 400 kinds, but Danish Crown can make more than 600 kinds
.
From the perspective of the overall consumption structure, our pork consumption is more than twice the world average.
This is the potential to reduce pork and increase beef and mutton to stabilize poultry
.
Structural changes have taken place in meat consumption under the dual epidemics.
For the first time, pork consumption has fallen below 60%
.
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　　It is obvious to all that poultry processing is a model for pork
.
MYr China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Three, more lossesMYr China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Qin is a former secretary of Board of Directors of animal husbandry, food / Chief Strategy Officer
.
He believes that the root cause of the soaring pig price is the problem of industrial structure, the problem of decentralization, and the problem of pricing model
.
High-quality development is the fundamental solution to alleviate the drastic fluctuations in the pig cycle
.
He pointed out that looking at the profit margin from the self-reproduction and self-raising pig breeding model, the price of pigs has fallen to the present period and the price is similar to the beginning of 2018 to the beginning of 2019, but the company's loss is far greater than that at that time.
What is the reason for this? ?MYr China Feed Industry Information Network-Based on feed, serving animal husbandry

　　He believes that there are two main points.
The first is that the average cost of the industry's production process has increased after the normalization of African swine fever prevention and control
.
The increase in the price of corn (2595, 5.
00, 0.
19%) has caused a 30%-35% increase in feed, and the entire industry has paid higher breeding costs
.
Looking at the pig sales and operating income in the seven quarters since 2020, Muyuan’s operating income in the first three quarters of 2021 was 13.
7 billion, which is almost the same as the income in the second quarter of 2020
.
However, the difference in the sales of live pigs has doubled, that is, double the number of pigs sold this year to achieve the same income
.
In the third quarter, Muyuan's monthly income was less than 5 billion, with an average monthly decrease of 3 billion
.
It was the rapid fall in pig prices that caused such a large fluctuation
.
The second is the question of meat consumption structure
.
The proportion of fresh meat consumption in the United States is only 20%, and processed products are also rich in forms and evenly distributed
.
China's meat consumption structure is 80% of hot fresh meat and cold fresh meat
.
The high proportion of fresh meat has a small buffer between production capacity and consumption in pro-cyclical conditions, which will inevitably lead to a sharp rise in industry prices
.
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　　Qin Jun believes that African swine fever has brought rapid and profound changes to the industry
.
The proportion of production capacity of the top ten enterprises in industry concentration has changed from 67% to 13% in the past few years, and it will definitely increase in the future
.
At the same time, the trend of industrial chain integration has also emerged
.
At present, the cost of large-scale enterprises is no longer advantageous compared to retail investors
.
For many companies, the cost is nearly 20 yuan or even higher, and the retail cost is about 14 to five yuan
.
There are also doubts in the industry whether large-scale enterprises have made pig costs so high? Our view is that this is only a temporary phenomenon, and rapid expansion will inevitably bring about loss of management efficiency
.
Behind the high-quality development of the industry must be the investment in research and development, the upgrading of equipment, the improvement of management, and the construction of talent echelon
.
Last year's high pig prices brought rapid progress, and the entire industry had to pay tuition for this
.
This is a normal phenomenon .
We are full of confidence in the future and remain optimistic
.
MYr China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Four, more modelsMYr China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Rural Credit Union began to do the intelligentization of the number of pigs in 2015
.
Wang Ke, vice president of Beijing Rural Credit Interconnection Technology Group Co.
, Ltd.
, understands that the digital intelligence of China's pig industry is that the entire pig industry is a process of business risk, including procurement risk, breeding risk, price risk, operating risk, and management risk
.
In the past two years, the industry has changed faster and deeper, from pigs to meat, from breeding to food, from loose to joint
.
At this time, don't worry about whether digital intelligence is necessary or unnecessary, but how you use it well
.
MYr China Feed Industry Information Network-Based on feed, serving animal husbandry

　　For pig companies, it means choosing a platform
.
The current platform construction is very hot
.
Rural Credit Union has been working on the "Pig Networking" platform since 2015, with pigs as the core, linking pig-raising related resources together, aiming to solve five problems: management, trading, veterinary services, financial services, and smart pig raising.
The big data of pig farming is formed through five levels
.
With the help of pig raising companies' deep understanding of the pig industry and the continuous accumulation of digital IT capabilities in pig raising in the past six years, a pig raising platform suitable for large enterprises has been built
.
MYr China Feed Industry Information Network-Based on feed, serving animal husbandry

　　He believes that the value of pig companies in the future comes from two sources.
One is how much data the company can generate during the entire process
.
Pig raising is not raising pigs, pig raising is raising data
.
Although the pig is dead, it lives in the enterprise's system and can provide value excavation for the enterprise
.
The second is how much data the company uses in the entire process
.
The amount of slaughter in the future may be an indicator to measure, but the possession and use of data is also an indicator of the value of a pig farming company
.
In short, digital intelligence is already a very clear trend
.
MYr China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Since the listing of live pig futures on the Dalian Commodity Exchange on January 8th, the operation has been stable and the market scale has steadily expanded.
From the initial day of listing of 10,000 lots and 20,000 positions, it has steadily grown to the current 50,000 lots and 100,000 lots
.
The functions of price discovery and risk management have initially emerged
.
MYr China Feed Industry Information Network-Based on feed, serving animal husbandry

　　According to the relevant person in charge of the DCE, China’s live pig production capacity has accelerated this year, and market prices have dropped rapidly.
Live pig futures have been in line with the spot price trend, and the fluctuations have become more rational.
This objectively reflects the market expectation of a restorative increase in the supply of live pigs, and provides for the breeding industry.
A clear price reference
.
At present, more than 2,000 corporate clients have participated in live pig futures trading, and more than ten listed companies have issued announcements that they plan to use the futures market for risk management auxiliary operations
.
In particular, since May, the price of live pigs has entered a rapid downward channel.
Some large-scale breeding companies have successfully used the futures market to hedge their value, lock in slaughter prices, stabilize production, and ensure the profits of their main businesses
.
Farming companies have a clearer understanding of the role of the futures market, and their enthusiasm for participation has been further improved
.
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　　This year DCE strongly supported small and medium-sized farmers to use "insurance + futures" to achieve stable income and increase income, and invested a total of about 132 million yuan to develop aquaculture "insurance + futures" projects
.
131 live pig "insurance + futures" projects have been established in the "DCOM Farmers' Income Guarantee Plan", covering 27 provinces across the country, with a maximum compensation rate of 405%
.
MYr China Feed Industry Information Network-Based on feed, serving animal husbandry

　　The above viewpoints are not "spattered", they are mutual cause and effect, and are deduced from each other
.
Things are spiraling upwards, and new trends are conceived in the trend
.
MYr China Feed Industry Information Network-Based on feed, serving animal husbandry