This round of pig cycle may usher in a turning point
Experts believe that as long as there are no emergencies that have a significant impact on production capacity, this round of pig cycles may enter a decline channel, and the inflection point may come. Affected by the epidemic situation, the threshold of pig breeding in my country will increase in the future. At the same time as scale up, industrialized production methods driven by mechanized, intelligent and industrial pig breeding have started. In the future, China's hog industry will accelerate into the era of industrialized production. Although the production main body is still diversified, integrated enterprises and leading enterprises Will accelerate development and become the main force affecting market development
According to monitoring data from the Ministry of Agriculture and Rural Affairs, on June 18, the average pork price in the national agricultural wholesale market was 42.72 yuan/kg, which was double the 21.36 yuan/kg on June 18, 2019. The national pig price has been on the rise since June 2018, and it has been 24 months since.
Prices continue to be high, increasing the consumer's burden of life. At the beginning of the Chinese New Year, domestic pork prices were loosened and fell for 14 consecutive weeks, but rebounded again last week. The international pig price has been sluggish for a long time. When will the high domestic pig price usher in a downward cycle? Has the turning point of this round of pig cycle arrived? To address these issues, the reporter interviewed relevant experts.
Two days of ice and fire in the pig market
"At present, the purchase price of wool pigs is 34 yuan/kg. If they are self-breeding and raising each pig, the profit is about 1600 yuan. If they are not self-breeding and selling, each profit is only 300 yuan. The main reason is that the piglets are too expensive. It takes more than 1,000 yuan for a piglet." June 19, said Huang Pengcheng, a farmer in Lianhua Village, Liuhe Town, Qichun County, Hubei Province. Huang Pengcheng was born as a veterinarian. A small pig farm was built ten years ago. He breeds and raises himself and keeps 200 hogs all year round.
Although the price of pigs continues to be "high fever", the "bull market" lasts a long time, but the industry feels very different. It is quite appropriate to use the "two days of ice and fire" to summarize.
Small farmers such as Huang Pengcheng are "ice". Since this year, Huang Pengcheng has stopped raising pigs. The previous African swine fever epidemic has given him a lingering fear. "Don't look at the high profit and risk of raising pigs now. If the disease occurs, the pigs that had been in good condition will die out one by one in a few days." Huang Pengcheng said. In the spring of this year, he switched to try to raise chickens. He currently has 200 chickens. If the benefits are achievable, he plans to expand the scale.
National leading pig breeding enterprises are "fire". Wen's annual report shows that net profit in 2019 was 13.906 billion yuan, an increase of 251.38% year-on-year. New Hope Liuhe Co., Ltd.'s net profit in 2019 was 5.04 billion yuan, a year-on-year increase of 195.78%. The Muyuan Group successfully withstood the severe test of African swine fever, and its net profit increased by 1075.37% in 2019.
"This round of pig cycle superimposes the new coronary pneumonia epidemic situation, environmental protection policy, pig product transportation policy and production cycle factors, which is very different from the previous cycles." Zhu Zengyong, associate researcher of Beijing Institute of Animal Husbandry and Veterinary Medicine, Chinese Academy of Agricultural Sciences. He told reporters that since 2006, China has experienced three complete pig cycles, from June 2006 to May 2009, June 2009 to April 2014, May 2014 to May 2018, The duration is 36 months, 59 months and 49 months, and the rising time from the valley to the peak is 23 months, 28 months and 26 months. This round of upswing has been 24 months since June 2018.
In Zhu Zengyong's view, the rising cycle of this round is different from the previous cycles. The first is that the inventory of live pigs and the number of capable sows has declined deeply, and the production of all farming entities has been affected to varying degrees. If there is no African swine fever epidemic, pork prices are expected to continue to decline in 2018, and there may be cyclical lows in the first half of 2019. However, the African swine fever epidemic disrupted the normal fluctuation rhythm of the pig cycle. Since October 2018, the number of energy-producing sows has fallen by more than 5% of the warning line and the decline has continued to increase. As of September 2019, the nationwide number of capable sows has declined by 38.9% year-on-year, and the number of live pigs has fallen by more than 41%.
The large decline in production capacity has caused the pig price to continue to rise rapidly, the increase rate is much higher than the previous cycle, and the increase cycle is short. Judging from the average monthly price, the high price of pigs since 2006 has been 16.87 yuan/kg, 19.68 yuan/kg, 20.45 yuan/kg and 37.11 yuan/kg. The price of pigs in February 2020 increased from the high point in June 2016 81.5%. It took only 14 months from the trough to exceed the previous price high, and the first two rounds were 25 months and 24 months.
Inflection point may be coming
"As long as there are no emergencies that have a significant impact on production capacity, this round of pig cycles may enter a decline channel, and the inflection point may come." Zhu Zengyong said.
The main influencing factors of pig price inflection point are supply and demand. From the perspective of supply, the inventory of live pigs and capable sows is the most important indicator to judge the inflection point of pig prices. Since October 2019, the number of capable sows in the country has rebounded for eight consecutive months. From the perspective of production cycle, the supply of live pigs has recovered at the fastest 10 months. The stock of pigs and the supply of piglets have been recovering for 4 consecutive months, which indicates that the supply of pigs will increase significantly after 5 months.
From the perspective of consumption, pork consumption demand in the first half of this year is expected to decline by 30% to 40%, which is higher than the decline in pork supply. The recovery rate of supply in the second half of the year is expected to be greater than the recovery rate of consumption. Therefore, looking at the high price of pigs in general, it may be over, and it will gradually return to a reasonable price level in the later period. It is expected that the national supply of live pigs will increase significantly in 2021, which will further accelerate the recovery of pig prices to a reasonable price level.
"Affected by factors such as the level of biosecurity, capital, technology, management, etc., the speed, time and scale of the expansion of small and medium-sized retail investors' supplementary fences are much slower than those of large-scale enterprises and large-scale farmers. The leading companies are expanding rapidly through the'company + farmers' method. At the same time, the upstream and downstream enterprises in the breeding industry chain such as feed and slaughtering have also accelerated their entry into the field of breeding.
Take the Muyuan Group as an example. Since the occurrence of the African swine fever epidemic, the company has accelerated its deployment across the country. It is expected that the number of live pigs slaughtered in 2020 will be increased to 20 million.
Zhu Zengyong believes that under the influence of the epidemic, the threshold for pig breeding in my country will increase in the future. At the same time as scale up, industrialized production methods driven by mechanized, intelligent and industrial pig breeding have started. In the future, China's hog industry will accelerate into the era of industrialized production. Although the production main body is still diversified, integrated enterprises and leading enterprises It will accelerate development and become the main force affecting market development.
Policy guidance should keep up
"Pig cycle is a product of the market, not unique to China. To improve the stability and competitiveness of hog production and reduce the fluctuation of the price of pigs in each round of the pig cycle, the relevant departments should do it." Zhu Zengyong said.
First of all, we must base on domestic pork supply and make reasonable use of both domestic and foreign resources. Pork imports are an effective means of regulating the supply and demand of my country's pork market. In particular, the current production capacity is still in the process of recovery. Reasonable pork imports can help prevent excessive rises in pork prices. Relevant departments should continue to improve the domestic pig industry early warning system, provide producers with more access to market information resources, timely release pork import early warning information to the society, and reasonably guide the market to import pork, so as to both stabilize pig prices and prevent excessive The purpose of imports hitting the domestic market.
Second, the use of medium- and long-term discount loans, insurance and other financial instruments to stabilize pig production.
Zhu Zengyong said that if government departments issue targeted medium- and long-term low-interest and discount loans, they can help farmers to solve financing problems and ensure a moderate reduction in production capacity when pig prices are low. For small and medium-sized farmers, they can be guided to establish breeding cooperatives, or implement the "company + farmers" model, thereby forming a scale advantage, ensuring the supply of production materials, effectively establishing production and marketing docking, and reducing operating risks. (Economic Daily·China Economic Net reporter Huang Junyi)