On February 8, according to the monitoring of the National Development and Reform Commission, from January 24 to 28, the national average pig grain price ratio was 5.57:1, which was between 5:1 and 6:1 for three consecutive weeks. The Pork Reserve Adjustment Mechanism shall do a good job in the pre-plan for ensuring supply and price stability in the pork market” (hereinafter referred to as the “pre-plan”) to set the second-level warning range for excessive declines.
The National Development and Reform Commission will work with relevant departments to start the purchase and storage of pork reserves as appropriate, and guide local governments to carry out the purchase and storage work in accordance with regulations.
This means that if the pork reserve purchase and storage is started, it will be China's first pork purchase and storage in 2022.
Lin Guofa, research director of Brick·Agricultural Shopping Network, told Yicai.com that the state’s regulation of pig prices, whether it is purchasing or stockpiling, is to stabilize the domestic supply of live pigs and prevent excessive declines or excessive increases in pig prices. .
He said that since 2022, the price of pigs has fallen, triggering early warnings, and macro-control at the national level can effectively reduce market panic and prevent panic selling, which will lead to the emergence of nervous pigs in the medium term (the next 2 to 4 months). condition.
At the same time, this move is also conducive to stabilizing the price of pigs and giving confidence to breeding enterprises and farmers.
Pig prices in 2021: all the way down, bottoming out
Overall, pork and hog prices in China both fell sharply in 2021 from the previous year, but bottomed out in the fourth quarter.
There were two bottoming outs throughout the year last year, and the magnitude and time of the rebound in mid-to-late October were much higher than the first rebound in late June and early July.
According to the data of the Ministry of Agriculture and Rural Affairs, starting from February 2021, with the seasonal decline in consumer demand and the increase in the number of live pigs, pork prices will continue to decline. 57.6%, bottomed out after falling to 22.40 yuan/kg in October, and rebounded to 28.41 yuan/kg in December, up 3.5% month-on-month and down 42.8% year-on-year.
From the weekly price point of view, the national hog price has obvious characteristics of rapid decline in stages.
Since 36.01 yuan/kg in the third week of January 2021, the high level has begun to fall; in the fourth week of June, it has fallen to 13.76 yuan/kg.
In June 2021, the National Development and Reform Commission and other departments jointly issued the above-mentioned "Plan", which aims to "give full play to the important role of the government's pork reserve adjustment as a key starting point". Push the price down to a reasonable range to avoid excessive expansion of live pig production capacity; when the price is too low, purchase and storage will be initiated to support the market, giving farmers a "reassurance" to avoid excessive elimination of live pig production capacity.
Therefore, when the price ratio of pig grain fell to 5:1, my country started the first round of frozen pork purchase and storage.
Affected by this, in the fourth week of July last year, the price of pigs rebounded to 15.93 yuan/kg.
However, due to factors such as the prevention and control of the new crown pneumonia epidemic, consumption has not been effectively boosted, and the pig price is not prosperous in the peak season. The pig price continued to fall in August last year, and fell to the lowest price of the year in the first week of October, at 11.54 yuan/kg; Since then, affected by factors such as the boost of the second round of frozen pork purchases and storage starting in the second week of October, consumption support and other factors, the price of live pigs rebounded to 18.33 yuan/kg in the first week of December, but began to decline in the second week of December, 12 In the last week of the month, it was 16.92 yuan/kg, down 0.9% month-on-month and 49.8% year-on-year.
At the same time as the price of pigs is falling, the cost of breeding is at a historically high level, and the income of breeding is facing the double squeeze of falling pig prices and rising costs.
Zhu Zengyong, a researcher at the Beijing Institute of Animal Husbandry and Veterinary Medicine of the Chinese Academy of Agricultural Sciences, told the First Financial Reporter that in general, the income of pig raising in 2021 will be better in the first half of the year, with a significant loss in the third quarter and a small profit in the fourth quarter.
For self-propagating and self-raising farmers, the average profit level of a 120 kg fat pig is more than 300 yuan.
In 2021, self-propagating and self-supporting farmers will make profits from January to May, start to lose money in June, and achieve a small profit again from November to December.
Among them, the profit level was the highest in January, about 2,300 yuan per head, and the most serious loss in October, with an average loss of more than 550 yuan per head, and turned into profit in November, about 350 yuan per head, and fell to more than 200 yuan in December. /head.
For outsourced piglet farmers, the average annual loss of a 120kg fat pig is more than 500 yuan.
Last year, the outsourced piglet farmers remained profitable from January to February, about 780 yuan per head in January, and began to lose money in March and continued to expand. In June, the loss was the most serious, with an average loss of more than 1,400 yuan per head. The price of pigs in November The recovery has driven the profit to rise to more than 200 yuan per head, which is higher than the profit level of self-propagating and self-raising farmers.
Cost reduction and efficiency increase waiting for the "next spring"
Pig prices will fall in 2021, mainly due to the continuous recovery of production capacity, and the growth in demand is lower than the recovery rate of production capacity. However, farmers and enterprises generally believe that the price of pigs will continue to repeat the trend in 2020. This led to the outbreak of contradictions in the oversupply of pork throughout the year.
Although pig prices will continue to decline in 2021, 2021 will still be a bumper year for pig farming in terms of income from pig farming.
On January 20, Tang Ke, director of the Department of Marketing and Information Technology of the Ministry of Agriculture and Rural Affairs, said at a press conference of the State Council Information Office that in 2021, except for losses from June to October, the remaining seven months will be more profitable, according to the number of slaughtered. According to the weighted average calculation, there is still a profit of 564 yuan per slaughtered pig in the whole year, which is higher than the profit level of about 200 yuan in normal years.
This means that only the loss from June to October is short, and the loss period is not enough to complete the production capacity reduction. The huge profits accumulated in the early stage also prevent farmers from entering the stage of passive production capacity reduction, and the freezing point of production capacity reduction has not yet reached.
Entering 2022, the demand for pork food processing will decrease, and the price of pigs will start to fall.
The so-called demand for pork food processing refers to the rapid decline in pig prices in the first three quarters of 2021, which stimulated the early outbreak of demand for bacon and sausage production.
This factor has led to the continuous rise of pig prices starting from the second half of October 2021. Due to the rapid increase in pig prices in a short period of time, farmers have once again actively suppressed the slaughter. Before December, the demand for pig prices supported the price.
After the Spring Festival in 2022, farmers were worried that the price of pigs would plummet similar to that after the Spring Festival in 2021, so they began to focus on slaughtering, and the price of pigs fell rapidly.
The national pig price has dropped to 12 yuan/kg, and pig farming has once again suffered losses.
From the perspective of the whole year, pork supply will continue to grow inertialy in 2022.
Zhu Zengyong said that in 2021, the number of fertile sows will reach a high level. Although it has been reduced in the second half of the year, it is still higher than the normal level. In 2022, pork production is expected to increase slightly, and it is expected to be between 55 million and 56 million tons.
As for the trend of pig prices, in the first half of 2021, the production capacity of fertile sows will be at a high level, which means that the supply of live pigs will continue to grow in the first half of 2022, and there is a risk of rapid decline in pig prices. As the growth rate of slaughter volume slows down , it is expected that pig prices will rebound slightly in the second half of the year, but the rebound space is limited.
Zhu Zengyong said that although the number of reproductive sows has been slightly reduced since July 2021, the overall reduction is relatively mild.
Judging from the current changes in the inventory and production capacity of the entire breeding sow, it is not enough to drive the inflection point of pork prices in the second half of 2022.
"The pig cycle inflection point is not expected until 2023 at the earliest."
This also means that the focus of the pig industry in 2022 is still cost management.
Lin Guofa said that under the downward trend of pig prices, it is necessary to recognize the current industrial situation, and do not follow the trend or panic selling. Reducing costs and increasing efficiency is still the key to the pig breeding industry waiting for the "next spring".
(Author Shao Haipeng)