When will the falling pig price cycle end?

　　Monitoring data from the Ministry of Agriculture and Rural Affairs shows that on January 20, the average price of pork in the national agricultural wholesale market was 21.81 yuan/kg, down 5.87% from 23.17 yuan/kg on December 30, 2021.

　　At the beginning of the new year, what is the situation of pork supply in the country?

What is the profit and loss situation of the pig industry?

Has the upward inflection point of pig prices come?

With these questions, the reporter interviewed relevant people in the industry.

　　Pork supply remains plentiful

　　"In the first half of 2022, the supply of commercial pigs across the country is still obvious, and there may be an obvious oversupply in some time." Zhu Zengyong, a researcher at the Beijing Institute of Animal Husbandry and Veterinary Medicine, Chinese Academy of Agricultural Sciences, told reporters.

　　After the national breeding sow inventory reached a peak of 45.64 million in June 2021, due to the fall in pig prices, the farms actively reduced production capacity, and began to decline for 6 consecutive months in July. However, in November, the price of pigs rebounded significantly. , the rate of production capacity reduction of reproductive sows began to slow down significantly.

Therefore, although the current year-on-year growth rate of live pig production has narrowed, it is still increasing.

Since most of the ternary sows with backward production capacity and binary sows with lower production capacity are eliminated, the performance of the existing breeding sows can be optimized and improved, and the abundant supply of commercial pigs in the first half of 2022 is still obvious.

　　In Beijing Xinfadi Agricultural Products Wholesale Market, the average daily listing volume of white striped pigs in December 2021 was 1,952.48, an increase of 53.32% from 1,273.48 in the same period in 2020, an increase of 22.22% from 1,597.55 in the same period in 2019, and an increase of 22.22% from 1,597.55 in the same period in 2018. 1902.10 head increased by 2.65%.

　　"2018 was the year with the most abundant supply of live pigs, and it was also the year with the most prosperous meat transactions in Beijing Xinfadi market. In December 2020, the sales of white striped pigs exceeded that of the previous year with the most abundant supply of hairy pigs, indicating the current level of sufficient supply of live pigs. There is no obvious difference from the years of excess supply," said Liu Tong, manager of the statistics department of the Xinfadi Agricultural Products Wholesale Market in Beijing.

　　Zhu Zengyong told reporters that since September 2021, the monthly slaughtering volume of live pigs in designated slaughtering enterprises across the country has exceeded 25 million heads. will be higher than December 2021.

Affected by the rebound in pig prices in October and November 2021, many farms are reluctant to sell, and the number of large pigs is large. In December, large pigs began to be released one after another, which also increased the supply of pork.

　Self-propagation starts to lose money

　　From the perspective of the cost of pig breeding, self-propagation has historically been lower than that of purchased piglets, but recently there has been a strange phenomenon of small losses from self-propagation and self-raising, and a small profit from outsourced piglets. The cost of self-propagating and self-raising farmers is still high.

　　Zhu Zengyong told reporters that since June 2003, the price fluctuation of live pigs in my country has gone through 4 complete cycles.

The 4 full cycles are June 2003 to May 2006, June 2006 to May 2009, June 2009 to April 2014, and May 2014 to May 2018.

The 4 full cycle durations were 36 months, 36 months, 59 months and 49 months.

Each complete cycle includes a rising phase and a falling phase, and the time span is gradually elongated.

　　Judging from the monthly average price peaks of live pigs in different cycles, the high point of live pig prices in the first cycle was 9.59 yuan/kg in September 2004.

The high price of live pigs in the second cycle was 16.87 yuan/kg in April 2008, up 76% from the highest price in the first cycle, and higher than the previous cycle high for 24 months.

The price of live pigs in the third cycle reached a high of 19.68 yuan/kg, up 17% from the high of the previous cycle, and was higher than the high of the previous price cycle for 10 months.

The high point of the price of live pigs in the fourth cycle was 20.45 yuan/kg, up 3.9% from the high point of the previous cycle.

The 5th cycle is currently running.

　　In March 2021, outsourced piglet farmers began to lose money, hitting a high of 1,400 yuan per pig in June; self-propagating and self-raising piglets began to lose money in June, and the loss reached about 780 yuan per pig in mid-to-early October.

From the perspective of the whole year of 2021, the self-propagating and self-raising piglets will make a small profit of more than 300 yuan per head, and the outsourced piglet farmers will lose more than 500 yuan per head.

　　However, affected by the fall in pig prices, the price of piglets continued to fall, and fell to a low level during the year in early October 2021. The price of a piglet weighing about 10 kg only costs about 150 yuan, which has driven the cost of purchasing piglets to fall significantly.

Since October, the cost of outsourcing piglets has been lower than that of self-propagating and self-raising farmers.

At the end of the year, the price of piglets has rebounded, and the cost is about 200 to 400 yuan per head. The cost of purchasing piglets is still lower than the cost of self-propagating and self-raising farmers.

Affected by the fall in pig prices in December 2021, a 120-kg commercial pig was released in the middle and late December, and self-breeding and self-raising farmers began to make a small loss, while outsourcing piglets farmers still made a small profit of about 200 yuan.

　　"Due to the low cost of purchasing piglets for the outsourced piglet farmers in the fourth quarter, from the perspective of market risks in 2022, the loss risk of outsourced piglet farmers will be less than that of self-propagating and self-raising farmers." Zhu Zengyong said.

　　When will the upswing cycle come?

　　"The new round of pig cycle may have to wait until the first half of 2023." Zhu Zengyong said about the question of when the pig price will get out of the falling cycle, which is generally concerned by the pig breeding industry.

　　Since the second week of October 2021, the national pig price has rebounded significantly for 8 consecutive weeks, rebounding from 11.54 yuan/kg to 18.33 yuan/kg.

Some farmers believe that the cycle of falling pig prices is over and they are reluctant to sell.

Zhu Zengyong said that since June 2003, the price of live pigs in my country has gone through four complete cycles, and each cycle lasts for several years.

The main reasons for the rebound in pig prices after October 2021 are: first, the oversold price; second, the country’s two rounds of frozen pork purchase and storage boost; third, the advance of bacon marinating and household food reserves have increased the consumption demand of big pigs; fourth, pork imports have declined .

　　At present, the prices of live pigs and pork have successively corrected after a sharp rebound.

The price of live pigs in the 500 bazaars monitored by the Ministry of Agriculture and Rural Affairs has dropped continuously since the second week of December 2021. By the first week of January 2022, the price was 16.59 yuan/kg, down 2.0% month-on-month and 53.9% year-on-year.

The main reason for the decline in pig prices is that the situation of the obvious increase in the supply of live pigs in the fourth quarter of 2021 has not changed.

Since mid-December, large-scale pig farms, especially listed companies, have increased the number of live pigs to complete the annual slaughtering task, and small and medium-sized households have also begun to focus on slaughtering large pigs in the early stage.

Slaughtering companies took advantage of the opportunity to increase the number of slaughtered slaughterhouses and began to lower prices. At the same time, the curing of bacon was gradually coming to an end. In addition, the release of frozen products impacted the fresh sales market, and the support of consumption on market prices weakened.

　　"From the perspective of the Xinfadi market in Beijing, the number of baitiao pigs on the market will reach an annual high during the period before the Spring Festival each year. Judging from the current supply capacity of Baitiao pigs, the twelfth lunar month will exceed the demand this year, and meat prices will rise before the Spring Festival. The probability is not high." Liu Tong said.

The price of live pigs has been in a state of sluggish rise recently, and it is good to be able to maintain near the break-even point of the farm.

Farms can take advantage of the relatively stable price of live pigs to properly eliminate those low-capacity sows and change the oversupply situation as soon as possible.

　　Zhu Zengyong said that due to the high level of breeding sows in the second quarter of 2021, the supply of piglets continued to remain high, indicating that the market supply will still show a significant increase in the first half of 2022. After the Spring Festival, pig prices may be too fast in stages. downside risk.

The cycle low may appear in April and May, and the price may be about 30% lower than the industry average cost line.

In view of the fact that the production capacity of reproductive sows has started to decline since the end of the third quarter of 2021, it is expected that the excess pork supply and demand situation will gradually improve from the third quarter of 2022, and the first half of 2023 may enter a new round of pig cycle.

　　Our reporter Huang Junyi