Since august, the price of raw pigs has risen favourably。
However, after the price of raw pigs rose to a high level, the acceptance of downstream slaughtering enterprises was limited and the price of raw pigs has fallen in recent days. As of 19 august, the national average price of skinny meat pig was $20. 33/kg, a cumulative decrease of $0. 83/kg from 15 days, or 3. 83 per cent. The re-entry of farmers from the north, the diversion of some of the pigs, and the growing upstream culture sentiment, which supports the price of pigs, are expected to stop and fall in the near future。
According to zhong zhongxian, the price of pigs in pig production is either short-term or phased in, but the basics of supply constraints in the industry remain unchanged and there is still an increase in kinetic energy at the end of the month. The recent upward trend in the price of raw pigs has been facilitated by seasonal retrenchment in high-temperature subdued industries, the widening of pre-fixed rates of fertilizer and quarantine tickets in the south, among other factors. However, as the difference in the price of the standard fertilizer has been reduced, the price of the pig is either subject to a phased adjustment because of the positive impact of the rounding。
The industry keeps warming
In july, the average price of a commercial pig in a listed enterprise increased by more than 30 per cent per year. With the recovery in the price of pigs, income growth in farming enterprises has become widespread. With the exception of the decline in revenue from positive iris technology and the non-disclosure of income by st proud farmers, the remaining 15 listed enterprises registered an increase of over 50 per cent over the same period in their july pig sales。
According to a joint monitoring by the information centre of the ministry of agriculture and rural development and shandong cheuk information co. Ltd., in july 2024, affected by the expected increase in hot weather and market-based events, the production of pigs generally slowed down in scattered and scale farms, with some professional households re-heavying them twice, increasing the cost of buying pigs from slaughtering enterprises and supporting the continued increase in pork prices; and low consumption of pork and slow sales by distributors, resulting in a limited increase in pork prices. In july, the average monthly index of the prices of skinny pork and white pork out of 16 provinces (the municipality directly under the administration) was 24. 74 yuan/kg, an increase of 2 per cent in the ring ratio or 32. 4 per cent over the same period; the market price of raw pigs was 18. 65 yuan/kg, an increase of 2. 8 per cent in the ring, or 30 per cent over the same period。
Since the second quarter of this year, the price of raw pigs has shifted upwards and is increasing month by month in connection with the deactivation of production capacity. According to the ministry of agriculture and rural development, the number of capable pigs dropped from 4,296 million in june 2023 to 3,986 in may 2024, equivalent to 102 per cent of the normal stock of capable pigs in the country, and the production capacity shifted from surplus to relative equilibrium. From may of this year, however, there was a small increase of 0. 43 per cent in the volume of the cortex in the sample enterprises of the shanghai federation of steel agricultural surveys, and the decomposed capacity of the industry had reached its end without excessive decomposition。
“as opposed to previous years, the reconciliation of capacity during the current cycle is relatively moderate.” zhu zhongyong, researcher at the beijing livestock and veterinary institute of the chinese academy of agricultural sciences, pointed out that the pig farming industry is now more transparent in terms of information guidance and that farmers can regulate production rationally on the basis of publicly available government data. This has been accompanied by an increase in industry size and a gradual increase in productivity stability. Compared to previous years, disease prevention and control capacity has improved and the disease has been relatively stable. As a result, the de-development of production capacity has not seen the same dramatic decline as in previous cycles, which has contributed to an improvement in the supply and demand situation。
The size of the firm is still up
Currently, the number of female pigs that can be turned over by enterprises of some size is still growing. At a teleconference in february of this year, win's shares indicated that by the end of 2023, the number of pigs in the company was approximately 1. 55 million, an increase of about 100,000 over the beginning of the year. By the end of 2024, the number of capable pigs will have increased by 50,000 to 100,000 over the current level。
In june, a number of publicly marketed pig enterprises also referred to capacity planning for the production of fertilizers in their investor studies. According to the greater north, the company is now able to fill the storage area of approximately 240,000 sows and, with the succession of reserve pigs, it is expected to increase by the end of the year by 30,000 - 40,000 basic pigs. New hope claims that there are currently about 730,000 such pigs, which are expected to reach around 800,000 by the end of the year. It was also revealed that in the near future the number of able-bodied pigs would be increased and the use of sow houses would be made more efficient。
According to pig workers, the price of pigs has increased significantly over the past five years and industrial concentration has accelerated. In 2023, the poor performance was affected by financial difficulties and swine disease, which led to a marked evaporation of the production capacity of small and medium-sized farming households, a partial exit from the market and a gradual decline in the right to speak in industry. Large enterprises are more resilient to risk and do not use price as the only criterion for capacity regulation, mostly combining their own farming capacity and corporate planning adjustments. Against the backdrop of improved behaviour, the modest increase in the size of the mother pig in the head enterprise reflects the fact that the proportion of the country's small-scale pig farming continues to increase。
According to zhang bin, with the expected increase in the price of raw pigs, the reduction in the phase-out of sows and the increase in high-performance sows by enterprises of scale could, on the one hand, increase the number of pigs and boars and raise the level of revenue, and, on the other hand, be in line with the direction of enterprise development, be important for market share and industrial influence. However, against the background of the widespread profitability of this year's farming industry, efficiency gains or the survival of pigs are fundamental. Increasing the level of farming and the capacity to prevent disease will be key to winning industrial competition。
Wynn shares also mentioned in the presentation of the sow production plan that in the future there would be no over-exploration of the number of pigs to grow, but rather a greater pursuit of the quality of the pigs, which would lead to more out-posting through efforts to improve the production performance of the existing herd。
Will the price of pigs keep warming? In his research, chengxik, a securities analyst, analysed the price of pigs, which, according to the stage rhythm, has been rising steadily since august, the willingness to raise the farm has been expected to increase, and the support of the superimposed consumer has remained weak, thus posing a risk that the price of pigs will fall again this month. However, supported by supply and demand and emotional conditions, the return is expected to be limited, with pig prices dominated by high-level shocks, “a gradual improvement in consumption demand during the season, pending a cooling of the weather”。
Increased production requires rationality
The view was also expressed that the expansion was not the primary consideration, and that debt servicing was the focus of the enterprise's future. Win's shares indicate that the pig farming industry is short-lived and that the company will give priority to servicing some interest-bearing debt and reducing its asset-liability ratio. This expansion will be considered once the profit has effectively covered prior periods ' losses。
“improving production is an acknowledgement of future market conditions and risks.” according to the head of the pig business, “it takes 10 months for the pig to grow up, and this part of the capacity cannot be realized in the short term, but the money invested in the feed and the pig farm is real silver and silver. At present, the financial pressure on pigs is real.”
Zhu yingyong stated that the pig industry was regulated by market mechanisms. If production capacity is restored to a certain level in the later period, both small and medium-sized farmers and large-scale enterprises will be adjusted to their own capacity. Even industry-led firms cannot afford long-term losses and adjust production plans in a timely manner, based on a prediction of the market situation, without a sustained and blind expansion of capacity。
Data from the ministry of agriculture and rural development show that at the end of june this year there were 4. 038 million female pigs in the country, a decrease of 6 per cent over the same period and an increase of 1. 1 per cent in the ring, still higher than the normal holdings of 39 million。
According to data from the shanghai steel federation, a large commodity analysis agency, as at the end of july this year, there were 4. 9485 million large-scale pig reserves, an increase of 1. 14 per cent. Shanghai steel union agricultural analysts similarly believe that the price of raw pigs has increased significantly in the last two months, that profits at the farm end are in good range, that there is less willingness on the farm side to proactively reduce production capacity, and that there has been a small increase in the storage column of large-scale pigs over five months in a row. In addition, the actual production capacity of pigs is currently higher than expected and the upward range of prices cannot be overestimated。
Source: ninkyo, chinese business, chinese livestock
