Releasing 200,000 tons of reserve meat in a single month, the pig market welcomes the emphasis on control...

With the National Day approaching, pork has entered the peak consumption season, and the trend of the pig market has once again become the focus of
attention.

Wind statistics show that in June this year, most of the breeding enterprises in the pig industry achieved profits, and the loss margin in the second quarter narrowed
significantly.

Fu Linghui, spokesman for the National Bureau of Statistics, said at a press conference on September 16 that the current pig production capacity is generally at a reasonable level, and pork prices in the next stage do not have the basis for
a sharp rise.

The pig breeding industry has entered the profitable stage

At the press conference of the State New Office held on September 16, Fu Linghui, spokesman of the National Bureau of Statistics and director of the Department of Comprehensive Statistics of the National Economy, said that the current pig production capacity is generally at a reasonable level, the profitability of pig breeding is better, and most farmers are expected to be good, which is conducive to the overall stability
of pig supply.

Since the beginning of this year, domestic pig prices have experienced a process of
falling first and then rising.

Zhu Zengyong, a researcher at the Beijing Institute of Animal Husbandry and Veterinary Medicine of the Chinese Academy of Agricultural Sciences, told the Beijing News that the pig breeding industry has entered the profit stage since late June this year, and September is at a medium or above profit level, and the net profit obtained by a pig (120 kg) is more than
600 yuan.

Combined with the financial reports of listed companies, Makihara shares in the second quarter of this year reduced losses by about 71% compared with the first quarter, and basically achieved breakeven
in May and June.

In addition, Hefeng Shares, Shennong Group, Tang Renshen, Luo Niushan, Juxing Agriculture and Animal Husbandry and other listed companies all achieved profits
in the second quarter.

Small and medium-sized farmers have also benefited from
this round of market recovery.

Wen's semi-annual report quoted experts as saying that the pig price is mainly restorative, seasonal changes, superimposed on some special factors, the main influencing factors include corn, soybean meal and other prices in recent years have continued to rise, which has a certain conduction effect on pig prices; The prevention and control of the new crown epidemic has been effective, schools have reopened, factories have resumed work, social catering has been gradually liberalized, and pork consumption has increased significantly; Some small and medium-sized farmers pressure fence and secondary fattening, pork imports reduced and other factors, resulting in a phased reduction
in pork supply.

Record stockpile meat controls prices

In the second half of the year, the trend of the pig market is still the focus of
social attention.

Judging from the monthly data released by major pig breeding enterprises, in July this year, the price of live pigs stood in the range of 20 yuan / kg, but there was a correction
in August.

Fu Linghui said at the press conference of the State Council New Office on September 16 that under the influence of last year's low base, pork prices in August this year changed by 22.

Meng Wei, deputy director of the Political Research Office of the National Development and Reform Commission and press spokesman, said at a press conference held by the National Development and Reform Commission on September 19 that domestic pig prices have recently fluctuated in the range of 22 yuan to 24 yuan per kilogram; The pig food ratio in the latest week was 8.

For the late pig market situation, the Price Department of the National Development and Reform Commission has organized relevant parties to analyze and judge
many times.

"The state attaches great importance to the work of ensuring supply and price stability in the pig market, and the goal of regulation and control is to promote price operation within a reasonable range
.
" Meng Wei revealed at the press conference that in the first half of the year, when the price of live pigs was low, the state accumulated 13 batches of 520,000 tons of central pork reserves, which boosted market confidence
.
In order to increase the supply of the festival market, the National Development and Reform Commission and relevant departments have released two batches of central pork reserves, and a third batch of reserves
will be released in the near future.
"According to the number of releases and the later release plan, it is expected that the total number of pork reserves released by the state and various localities in September will be about 200,000 tons, and the number of single-month releases will reach the highest level in history, and the release price will be lower than the market price
.
"

Meng Wei also said that considering that the current pig price is at a high level, the average profit of pig breeding head is also significantly higher than the historical average, if the price rises further, it may lead to an excessive increase in production capacity and a sharp decline in prices in the later period, which is not conducive to the long-term healthy development of
the industry.
Therefore, in the next few months, the focus of the national pig price control work is to prevent the price from rising
too quickly.

Zhu Zengyong believes that boosted by the consumption of the Mid-Autumn Festival, the temporary reserves and pressure fences driven by the local epidemic, the price of live pigs began to rise from the third week of August.

However, in the third week of September, the growth rate has dropped significantly, which is related
to government regulation.
"From September 2019 to March 2021, the government has been investing in reserve meat, which is the highest cumulative release
.
If in September

The release of 200,000 tons will be the highest level
in the history of single-month stocking.
Many people think that the amount of reserve meat is not large, but all the regulation is four or two thousand pounds, which plays a role in reasonably guiding production and exiting the column and stabilizing market sentiment
.
”

For the trend of the pig market in the fourth quarter of this year, Zhu Zengyong judged that the supply of domestic commercial pigs is relatively abundant, and the import volume of pork may increase significantly, so under the premise of seasonal increase in supply and demand, the market is generally in a narrow range of
shocks.

Retail investors mostly take a wait-and-see attitude towards the supplementary column

Although the domestic pig market has passed the bottom of the last cycle, both giants and retail investors are more cautious
about increasing production capacity.

The above-mentioned Hebei pig farmer Mr.
Wang said that the reason why his pig farm has recently been able to cross the break-even line is related to the feed industry, one is more professional in animal nutrition and other feeding, and the other is that the feed cost has certain advantages over other simple pig enterprises, "I will continue to raise pigs in the future, but there is no expansion plan, and it is better
to be conservative at this stage.
" ”

When the head of New Hope accepted an investor survey on August 31, he said that the current industry supplement column is not particularly positive
.
"Some large or small and medium-sized enterprises do not have funds to supplement the fence, especially the reserve pigs, from 50 kg to 140 kg breeding, to weaning, fattening, about 14 months no cash flow inflow, unless selling piglets, otherwise all cash outflow
.
" Supplement 3,000 sows to form a set of cycles, buy pigs, staff, buy materials, feed these links need to invest at least more than 50 million yuan
.
"For some enterprises, especially in the Sichuan-Chongqing region, pig farms with 1,000-3,000 sows in the past were very cautious
.
"

"Judging from the survey data of retail investors, the average dematerialization rate is more than 50%, the Shandong retail households that raise dozens of sows are basically 70%, and the pig farms that raise hundreds to 3,000 sows are more than
50%.
At present, the column filling is in progress, but the overall progress of the column is not fast
.
There are many
fewer people who can breed sows than those who do secondary fattening and self-fattening.
The head of New Hope said
.

Wen's shares also recently replied to investors that at present, free-range farmers mainly carry out secondary fattening by purchasing stock piglets, and their supplementary columns do not affect the short-term supply of the entire industry, which is the redistribution
of stock piglets.
"Only the addition of the number of sows will affect the overall capacity supply of the market, but the sow still has a long time
to go before the pig is out of the barn.
"

Wen's share analysis believes that at this stage, the pig price recovery time is short, the price of feed raw materials is high, the early investment of pigs is higher, and the existing interest rate differential is less
attractive to free-range farmers.
At the same time, the pig market is more risky, environmental protection policy requirements are becoming stricter, and the market has been sluggish in the past two years, and retail investors are cautious about entering the industry again
.
"Combining the above factors, superimposed on the market price trend that cannot be accurately predicted, free-range farmers are mostly in a wait-and-see state
.
"

According to the data of the Ministry of Agriculture and Rural Affairs, as of the end of June 2022, there were 42.
77 million breeding sows in the country, which is 104.
3% of the upper limit of the target of 41 million heads set by the Ministry of Agriculture and Rural Affairs to regulate the number of fertile sows, and the pig production capacity returned to the green and reasonable area
of regulation.
According to third-party market data, since August, the price of piglets and the price of binary sows have dropped from the previous month, and according to the normal growth rate of pigs, most of the piglets in the current stage cannot be out of the pen before the Spring Festival, and the enthusiasm of free-range households to supplement the fence is weak
.

As far as the head pig breeding enterprises are concerned, compared with the previous high-speed expansion of production capacity, the attitude at this stage is more low-key and pragmatic
.
In the first half of 2022, the sales volume of live pigs in Makihara increased by 79.
39% to 31.
28 million heads, ranking first among
listed pig enterprises.
In late July, Makihara resumed construction of a small number of pig breeding projects, involving a production capacity of about 3 million heads, but the company said that it still does not have the conditions for large-scale new capital expenditure in the short term
.

"The amount of output is not necessarily the largest, but it is hoped that each pig can maximize the value, mainly through the extension of the industrial chain to achieve the goal
.
" Tianbang Food recently said in an investor survey, "There is no need to increase production capacity
next year.
" If it reaches 400,000 heads by the end of this year, there will still be idle
capacity.
At present, there is a plan for the intelligent upgrading and comfort transformation of pig farms, we are currently using our own funds for emergency transformation projects, and if the follow-up is completed after the approval of the fixed increase, this part is the focus of
capital expenditure next year.
”

Zhu Zengyong believes that after entering a new round of cycles in the past, pig prices will fluctuate at a low level within a year, but this round of cycles is a rapid rebound in the short term, and the industry has quickly entered a medium profit
from a moderate loss.
Starting from May, the number of fertile sows ended a continuous 10-month decline, with 4 consecutive months of month-on-month growth, which means that the supply of commercial pigs will show a continuous increase trend after the second quarter of next year, the entire supply side will continue to improve, and the price of live pigs will remain at a good level next year, but there will be no short-term sharp rise, and the overall situation will show a narrow range of shocks
.