The overall loss of the pig industry has exceeded the previous two times. When will this pig cycle be possible?

 　　Behind this, on the one hand, pig prices have been declining, and at the end of the holiday, they have begun to rebound weakly.
On the 8th, northern pig prices have "rised across the board
.
" On the other hand, 30,000 tons of frozen pork will be purchased and stored on October 10, and the supply and demand pattern is expected to ease
.
n4t China Feed Industry Information Network-Based on feed, serving animal husbandry

　　However, in this round of the pig cycle, pig prices have continued to fall, pig production capacity is still in the release stage, and the breeding structure of sows has been optimized, production efficiency has improved, and the pattern of loose supply is difficult to change
.
n4t China Feed Industry Information Network-Based on feed, serving animal husbandry

　　According to the analysis of CITIC Construction Investment, in terms of the absolute price space, the space for the live pig spot to continue to decline is becoming more and more limited
.
The current environment is too pessimistic to be more pessimistic; in this context, there is a slight positive, which may be amplified by market sentiment, but this does not represent a cycle reversal
.
n4t China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Pig prices have been falling for a long time, thinking about rising and the cold air is comingn4t China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Entering the November holiday, the price of pigs continued to bottom out
.
However, after bottoming out on October 6, there was a "two consecutive rises"
.
On October 8th, although the price of pigs did not increase much, the area of ​​increase was obvious, and the entire northern region was even more popular
.
According to industry analysts, the root cause is the long-term decline, and the direct cause is the cold air
.
n4t China Feed Industry Information Network-Based on feed, serving animal husbandry

　　A few days ago, many places in the north ushered in a new round of cold air, with continuous heavy rainfall
.
Among them, in Hebei and some parts of Beijing, the first snowfall since the beginning of autumn this year occurred, and the temperature in many places has dropped sharply, which has hindered the pace of farmers' slaughtering, and the trend of tight slaughter by farmers has aggravated the low-cost pig source of slaughter enterprises.
The acquisition is difficult, and the distribution of live pigs is also affected.
In order to ensure the daily slaughter volume, butcher companies have to raise prices to collect pigs
.
n4t China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Feng Yonghui, chief analyst of Sozhu.
com, said that from the perspective of consumption, the enthusiasm for pork consumption in the market has rebounded, and the phenomenon of "post-autumn fat" has increased
.
Some places took advantage of the low price of pork and began to marinate bacon, prompting the market to increase the volume of pork.
The market for large-weight live pigs has gradually become "sweet and sweet", and a new round of 30,000 tons of pork is expected to be collected and stored.
The panic has weakened, the market's reluctance to sell has become stronger, and the supply of live pigs has shown a decrease, which has helped the market to stop falling and rise
.
n4t China Feed Industry Information Network-Based on feed, serving animal husbandry

　　On October 10, the second round of the first central reserve of frozen pork in 2021 will be opened, and 30,000 tons will be listed for bidding
.
This is the fourth time the central government has started pork purchasing and storage this year
.
n4t China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Since July 2021, in order to cope with the excessive fall in the prices of live pigs and pork, the National Development and Reform Commission and relevant departments have carried out three batches of central frozen pork reserves in the first round, with a total of 50,000 tons listed for purchase and storage, and guided all regions to synchronize purchase and storage.
Stabilize market expectations
.
n4t China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Frozen pork procurement and storage measures have effectively curbed the trend of excessively rapid hog prices, and hog prices have rebounded significantly
.
n4t China Feed Industry Information Network-Based on feed, serving animal husbandry

　　CITIC Construction Investment Futures believes that although it does not believe that purchasing and storage can reverse the actual supply and demand, it is like an important signal light for previous pig cycles.
Although the market is still swaying in the waves, the coast seems to be getting closer and closer.
Up
.
n4t China Feed Industry Information Network-Based on feed, serving animal husbandry

　　The overall industry loss in this cycle has exceeded the previous two cycles.
Of course, the level of early profitability is much higher than before.
Just like the expansion of production capacity in a good period, the current loss-making environment is going down and the production capacity is fully opened
.
n4t China Feed Industry Information Network-Based on feed, serving animal husbandry

　　It is worth noting that according to data released by the National Bureau of Statistics, as of June 2021, there were 439 million live pigs, which was basically the same as the 440 million at the end of 2017
.
Among them, there are 45.
64 million breeding sows, which has exceeded the level of 44.
72 million at the end of 2017
.
This means that China's live pig production capacity has been fully restored
.
It is precisely because of the large increase in pork supply that it has entered the peak consumption season, and the price of pigs is still falling
.
n4t China Feed Industry Information Network-Based on feed, serving animal husbandry

　　In order to cope with the market downturn, most pig farms (households) choose to slow down the pace of production and optimize their sow inventory adjustments
.
According to monitoring, in July, the national reproductive sow stock increased for 21 consecutive months before the end of the previous period, a decrease of 0.
5% month-on-month, and the month-on-month decline expanded to 0.
9% in August
.
Large-scale pig farms are more aggressive in pursuing the poor and retaining the best.
All low-yielding sows are eliminated, and all high-yielding sows are left.
The overall production efficiency is significantly improved
.
n4t China Feed Industry Information Network-Based on feed, serving animal husbandry

　　At present, production is still growing inertially
.
In August of this year, the live pig inventory increased by 1.
1% month-on-month, which was an increase for six consecutive months.
In particular, the number of new born piglets each month was still increasing sharply
.
From February to August, the average monthly growth rate of newborn piglets in large-scale pig farms was 2.
5%
.
This means that the number of pigs for slaughter from September this year to February next year will continue to increase
.
n4t China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Especially in August, the number of new born piglets in large-scale farms was 33.
48 million, a new high since the resumption of pig production in the current cycle, a year-on-year increase of 31.
1%
.
This means that the number of live pigs for slaughter in February next year will increase by about 30% year-on-year, and the price of pigs is likely to fall
.
n4t China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Five "pig cycles" since the new millenniumn4t China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Under the regulation of the market economy, coupled with the cyclical characteristics of pig production, there is a "pig cycle" phenomenon in the world's pig industry.
Since China's pig industry has always been dominated by small and medium-sized pigs, this phenomenon has been common in China.
The performance is more obvious
.
n4t China Feed Industry Information Network-Based on feed, serving animal husbandry

　　The marketization of China’s pig industry can be traced back to January 1985, when the Central Committee of the Communist Party of China and the State Council issued the "Ten Policies on Further Encouraging the Rural Economy", which decided to abolish the distribution of pig farming, implement free listing, free trading, and follow the market.
Price is based on quality, and the unified pricing of most livestock products is cancelled
.
The reform of the livestock product circulation system initially broke the situation of exclusive management of livestock products, and activated the urban and rural meat, poultry, and egg markets, and specialized markets for livestock products began to appear and increased
.
n4t China Feed Industry Information Network-Based on feed, serving animal husbandry

　　With the comprehensive transition of China's rural reform to a market economy in 1992, animal husbandry production has developed rapidly.
By the mid-1990s, a historical leap in the basic balance of supply and demand for animal products was achieved, and the status of animal husbandry as a pillar industry of agriculture was established
.
n4t China Feed Industry Information Network-Based on feed, serving animal husbandry

　　In the new century, the "pig cycle" phenomenon has become more pronounced
.
Zhang Fu, Director of the Comprehensive Division of the Animal Husbandry and Veterinary Bureau of the Ministry of Agriculture and Rural Affairs, wrote an article that from 2000 to 2021 (2021 is the average price of the first July), the average annual increase in the price of live pigs was about 7%
.
Marked by an annual average price increase of more than 20% year-on-year (about 3 times the average increase), there have been 5 abnormal fluctuations since the new century, which occurred in 2004, 2007, 2011, 2016, and 2019.
The average live pig price increased year-on-year by 35.
6%, 64.
5% (25.
7% in 2008), 22.
1%, 46.
7%, and 62.
2% (61.
6% in 2020)
.
n4t China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Among them, the two rounds of "pig cycles" in 2007 and 2019 have both seen price "double peaks" for two consecutive years, which are two rounds of "pig cycles" with relatively large fluctuations since the new century
.
The "Pig Cycle" in 2019 was also the most volatile in general
.
n4t China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Lin Guofa, the research director of Brink Agricultural Products Collection Network, told China Business News that the pig cycle is an objective phenomenon and has always existed objectively.
The difference is the length and amplitude of the cycle
.
n4t China Feed Industry Information Network-Based on feed, serving animal husbandry

　　He said that in the nearly five pig cycles, except for the continuous loss of production during 2011-2015, and pig prices entered a new upward cycle, other cycles have two major factors of "loss + large-scale epidemic" to complete the reduction of production capacity.
Rise
.
n4t China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Analyzing the basic data of 5 rounds of "pig cycle", Zhang Fu said that the cycle length of each round of "pig cycle" is 3-5 years, and there is no obvious trend of cycle extension yet
.
At the same time, each round of "pig cycle" basically bottoms out in the April-May period after the Spring Festival.
It is expected that this round of "pig cycle" may also hit the bottom after the Spring Festival in 2022
.
n4t China Feed Industry Information Network-Based on feed, serving animal husbandry

　　In this round of "pig cycle", from the perspective of profit and loss alone, the conversion speed of this round of "pig cycle" may accelerate, after all, the depth of the loss exceeds any previous cycle
.
However, CITIC Construction Investment Futures analysis stated that there are three reasons for the delay in cycle conversion
.
n4t China Feed Industry Information Network-Based on feed, serving animal husbandry

　　First, the previous "pig cycles" have some additional driving factors.
This round of "pig cycle" has entered the normalization stage of African swine fever, and no obvious external driving factors have been seen;n4t China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Second, the current structural changes in the pig breeding industry are very obvious.
Large-scale breeding companies have increased the scale of breeding.
Compared with the flexible strategy of retail investors, it is more protracted
.
The competition in the aquaculture industry has gradually shifted from the mode of large enterprises versus small retail investors to the hand-to-hand combat of large enterprises;n4t China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Third, compared with historical data, the official inventory data is relatively high.
At the same speed, it will take more time to reduce production capacity
.
n4t China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Judging from the historical characteristics of industrial development, these rounds of "pig cycle" have common internal factors
.
For example, China's live pig production has a low level of scale and a large number of practitioners.
The rapid industrial upgrading process will inevitably be accompanied by certain market fluctuations and the survival of the fittest
.
n4t China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Since the 1980s, the United States has taken about 30 years to complete the process of large-scale production.
The number of pig farms (households) has been reduced from 650,000 to about 60,000, and the annual share of more than 5,000 pigs has reached 91.
5%.
1700 heads in stock
.
n4t China Feed Industry Information Network-Based on feed, serving animal husbandry

　　According to industry statistics, the number of pig farms (households) in China at the beginning of this century exceeded 100 million, and it has been reduced to about 20 million in 2020.
Among them, 2006-2007 and 2019-2020 were two rounds of violent fluctuations.
During the year, 17 million and 15 million pig farms (households) were eliminated
.
At present, only 25.
4% of the country’s annual slaughter scale is over 5,000, and the average pig farms (households) in the country have about 15 pigs
.
It is foreseeable that for a period of time in the future, the "pig cycle" will still be one of the performance characteristics of industrial upgrading and development
.
n4t China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Lin Guofa said that the "pig cycle" will not be eliminated, but it can extend the duration of a single cycle and reduce the range of cycle price fluctuations
.
If the industry information is accurate, the increase in the concentration of production scale will lead to the transformation of management and decision-making methods, which can reduce purely relying on operations to make production decisions, reduce irrational expansion and eliminate production capacity
.
n4t China Feed Industry Information Network-Based on feed, serving animal husbandry

　　He said that at present, the agricultural authorities are accelerating the construction of industrial information, especially the monitoring of breeding pig stock data.
As the core of pig production capacity, breeding pigs have stable stocks, stable pig supply, and timely epidemics.
As long as the seed source is not damaged, 6 pigs will be supplied.
May get better recovery
.
n4t China Feed Industry Information Network-Based on feed, serving animal husbandry