Tears ran!

 　　Introduction:fBm China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Since the African swine fever epidemic in 2018, the price of live pigs has fluctuated greatly, and the head companies have expanded rapidly
.
It's very prosperous, but a handful of fine sand
.
Up to now, several families are happy and a few are sad
.
The price of live pigs has continued to fall since the beginning of this year, and the time and magnitude have exceeded market expectations
.
We believe that there is little room for the price of live pigs to continue to fall, and the price turning point needs to be tracked month by month, and relevant indicators can be verified in time
.
fBm China Feed Industry Information Network-Based on feed, serving animal husbandry

　　"The increase in the pig stock has led to the growth of feed consumption
.
Wang Zongli, head of the National Animal Husbandry Station and executive vice chairman and secretary-general of the China Feed Industry Association, stated that the national feed grain consumption is expected to exceed 200 million tons
.
From January to August this year, the total national feed output reached 190 million tons, an increase of 19.
1 year-on-year.
%, of which pig feed output increased by 62.
6% year-on-year
.
fBm China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Ability to exist indicatorsfBm China Feed Industry Information Network-Based on feed, serving animal husbandry

　　In August, the number of reproductive sows released by the Ministry of Agriculture and Rural Affairs fell 0.
9% month-on-month, and the decline continued to expand compared with the July data
.
At the same time, the stock of reproductive sows in the sample in August decreased by 2.
88% month-on-month, which was the third consecutive month of decline
.
From the perspective of breeding profits and breeding pigs, we believe that the number of breeding sows will definitely decrease in a certain quarter, and the current proportion of breeding sows is relatively conservative
.
It can be used as an important reference signal when there is a sharp drop in the growth rate in a single month
.
fBm China Feed Industry Information Network-Based on feed, serving animal husbandry

　　The total number of breeding sows has decreased, but the quality of breeding sows will be significantly improved
.
For example, as of the end of June, the New Hope can breed about 1.
1 million heads, and the three yuan accounted for about 10%.
The plan is to gradually eliminate the three yuan sows in the second half of the year; the Wen's breeding population is about 1.
1 million heads, which is inefficient.
The proportion of sows is also about 10%, and it is also planned to eliminate them all in the second half of the year
.
 fBm China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Farming costs and profitsfBm China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Integrating the current dynamic piglet price and feed cost calculation, the current loss of purchased piglet fattening head is 1,000-1200 yuan/head
.
According to the current piglet price, estimated feed cost and pig price of 13 yuan/kg after 5 months, the profit of the purchased piglet heads after 5 months is 105 yuan/head
.
fBm China Feed Industry Information Network-Based on feed, serving animal husbandry

　　We believe that the piglet price is a very good leading indicator.
If the piglet price bottoms out and stabilizes, the market price will continue to fall less likely
.
At the same time, considering that feed costs account for a low proportion of the value of live pigs and the fluctuation is relatively small, the price change of piglets largely determines the cost of purchased fattening commercial pigs after 5 months, which in turn affects the price of pigs
.
 fBm China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Average weightfBm China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Pork supply is affected by two factors: one is quantity, and the other is weight
.
We believe that the two are positively correlated, so the elasticity of pork supply will exceed market expectations
.
We believe that the decline in the number of breeding sows is relatively slow, but the rate of weight loss is very fast
.
The average slaughter weight is another indicator for us to verify the inflection point of the pig price
.
fBm China Feed Industry Information Network-Based on feed, serving animal husbandry

　　As can be seen from the figure below, the current national average weight of pigs for slaughter is about 126 kg, which is much lower than the 135 kg in April
.
We believe that due to the high piglet prices in the first half of the year and the current pig price level, there is room for further reduction in the average weight of live pigs for slaughter
.
From March to September 2019, Central China and South China were affected by the African swine fever epidemic, and the average weight of pigs slaughtered was at an abnormal value, which is of little reference
.
fBm China Feed Industry Information Network-Based on feed, serving animal husbandry

 fBm China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Reasons behind the excessive drop in pig pricesfBm China Feed Industry Information Network-Based on feed, serving animal husbandry

　　‍ 1.
Production capacity may be underestimatedfBm China Feed Industry Information Network-Based on feed, serving animal husbandry

　　The current pig price ignores various positive signals and keeps falling.
One cannot help asking: How much is the production capacity of live pigs? This should be viewed from two aspects
.
fBm China Feed Industry Information Network-Based on feed, serving animal husbandry

　　First, according to statistical data, the production capacity of live pigs has been fully restored
.
However, data statistics are often for farms and enterprises, and individual data are often inaccurate
.
The pig farming has always been dominated by retail households.
Although the country has vigorously developed large-scale breeding in recent years, and the scale rate has been rising, the proportion of retail households is still very large, so the real production capacity may be much larger than the statistical data
.
fBm China Feed Industry Information Network-Based on feed, serving animal husbandry

　　The second is to focus on stamping
.
Because the proportion of retail investors is relatively large, and often retail investors are the least able to withstand fluctuations
.
Pig prices continue to fall, and retail investors suffer serious losses.
Many are forced to slaughter and withdraw from the market.
As a result, it is easy to step on slaughter and the price of pigs continues to fall
.
fBm China Feed Industry Information Network-Based on feed, serving animal husbandry

　　2.
Consumption may be overestimatedfBm China Feed Industry Information Network-Based on feed, serving animal husbandry

　　As we said before, the boost to consumption has generally been limited since the beginning of this year, but the second half of the year is better than the first half.
Take the Mid-Autumn Festival and National Day as examples.
With the boost in consumption, the price of beef and mutton has risen, indicating that the market is still there.
Certain spending power
.
But why the consumption of pork may be overestimated? Aside from eating habits and other issues, there are also two considerations:fBm China Feed Industry Information Network-Based on feed, serving animal husbandry

　　One is that the slaughter leads to more meaty pigs
.
When the price of pigs is high, a pig will sell for more money for every pound heavier, so in order to chase profits, many farmers start to put down the pens, and some even directly buy adult pigs and then fatten them to big pigs
.
This has caused the market to bear more meat under the same production capacity
.
Obviously, consumption has fallen and meat has increased, so the boost is not obvious
.
fBm China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Second, the price of pork and other dishes is not low
.
For example, meat buns, pork dishes in restaurants, etc.
, have all increased their prices because of the high price of pork at the beginning.
However, the current pork prices have fallen, but these products have not yet reduced their prices
.
In addition, the epidemic has led to a general decline in food and beverage consumption, and restaurants are the main source of pork consumption, and the decline in food and beverage consumption has also led to a difficult recovery in pork consumption
.
fBm China Feed Industry Information Network-Based on feed, serving animal husbandry

　　3.
Has the price of pigs fallen to the end?fBm China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Another aspect of the deep drop in pig prices is that the breeding side is intensifying the reshuffle
.
But anyway, this wave of pig cycle is too violent and tragic
.
The Ministry of Agriculture and Rural Affairs recently issued the "Implementation Plan for Pig Production Capacity Regulation (Interim)", which stipulates that the production data of the country’s pork production at 55 million tons in a normal year shall be used as a reference to set a target for the regulation and control of the stock of sows capable of reproducing sows.
The normal population of pigs has stabilized at about 41 million
.
This also means that subsequent localities will follow the plan to regulate and control the breeding stock of sows
.
fBm China Feed Industry Information Network-Based on feed, serving animal husbandry

　　The state has taken control.
Does this mean that the current pig price has reached the end and that it will stop falling and stabilize? This may not be necessary
.
The control plan is aimed at the whole and the whole cycle, and its purpose is to prevent the production of breeding sows from being damaged when the price of pigs drops excessively, which will lead to a decline in production capacity and high pig prices in the coming year
.
On the one hand, the current excess production capacity depends on the successive development of purchasing and storage work in various places, and on the other hand, it depends on the market itself to eliminate and reshuffle
.
Therefore, the current pig price of 4-5 yuan may be lingering for a while
.
　fBm China Feed Industry Information Network-Based on feed, serving animal husbandry

 fBm China Feed Industry Information Network-Based on feed, serving animal husbandry

　　What is more worrying is probably not only the current pig price.
The price trend of pigs from March to May next year may be more difficult, because according to the calculation of the breeding sow stock, the slaughter will still be at a high level at that time, and it will be full at that time.
In the low season of consumption this year, the price of pigs is likely to be challenged again
.
fBm China Feed Industry Information Network-Based on feed, serving animal husbandry

　　in conclusionfBm China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Considering the elimination progress of reproductive sows and the average weight of slaughter, it will take some time for the price of live pigs to stabilize and rebound, and we will focus on the time node in May next year
.
In addition, the piglet price is a good leading indicator, which helps us to judge the market price in the next 5 months in advance
.
fBm China Feed Industry Information Network-Based on feed, serving animal husbandry