It took only one year for the pig industry to go from making money lying down to losing 10 million yuan a day.

According to the 2021 performance forecast, among the top ten listed pig companies in terms of slaughter volume, only Muyuan shares are expected to be profitable.

At the same time, listed pig companies may fall into the situation of "the more they sell, the more they lose." Among the top five pig companies in terms of slaughter volume, in addition to Muyuan shares, Zhengbang Technology, Wen's shares, New Hope and Tianbang shares are expected to The total amount of losses exceeded 45 billion yuan.

Industry insiders said that the current large pig farmers are only relying on "family wealth" for support, and it is still unknown when the losses will be filled.

Losses are gradually expanding

　　Judging from the 2021 performance forecast announced by the listed pig companies, it has become a "normal thing" to lose 10 million yuan per day.

Among the top ten listed pig companies in terms of slaughter volume, Zhengbang Technology and Wen's shares both have pre-loss amounts of over 10 billion yuan. Among them, Zhengbang Technology will become the most-losing listed pig in 2021 with a pre-loss of 18.2 billion to 19.7 billion yuan. Enterprise.

New Hope and Tianbang shares followed closely, with pre-loss amounts of 8.6-9.6 billion yuan and 3.5-4 billion yuan respectively.

　　"According to the performance forecast data, most pig companies have losses to varying degrees, with losses ranging from 200 million to 19 billion yuan, and very few companies can maintain positive performance growth." Li Ming, a pig analyst at the Agricultural Products Division of Shanghai Ganglian, told China A reporter from the Commercial Daily said that compared with the same period last year, the reason why pig-raising companies have shown losses and reduced profits as a whole is mainly due to changes in the supply and demand of live pigs in 2020 and 2021. The rapidly recovering stock of reproductive sows has provided a solid foundation for the supply of live pigs.

　　According to reports, at the end of March 2021, the number of breeding sows in fixed-point monitoring has increased by 45.3% year-on-year, and the average growth rate of breeding sows in 2021 will be positive. Under the environment of continuous recovery of production capacity, the supply of live pigs is gradually increasing, and the contradiction between supply and demand is also In the continuous repair, the price of live pigs has fallen, and the loss has gradually expanded.

　　The person in charge of a pig company in Jiangxi told a reporter from China Business Daily that the biggest feeling in 2021 is the drop in pig prices in September, the industry suffered deep losses, and some farmers left the farm passively.

Another person in charge of a pig company in Henan also said frankly: "In our business, we have to follow the cycle, a four-year cycle, only one year is profitable, and the remaining three years are not bad. It cannot be inflated, and it is necessary to quickly reserve funds for 'wintering', otherwise it will not be able to survive losses."

　　Entering 2022, the losses in the pig industry will continue.

According to the data of Shanghai Ganglian-My Agricultural Products Network, according to the average slaughter price of live pigs in January 2022, the loss of self-bred and self-raised fattening pigs in January is 135.81 yuan/head, and the outsourcing (purchased piglets 6 months ago) will be slaughtered. The loss of fattening pigs is 172 yuan/head.

Muyuan Co., Ltd. said that it is expected that the relationship between supply and demand of live pigs will gradually improve after the second quarter of 2023.

Wen's shares also said that it is optimistic that the price of live pigs may enter an upward channel after the second half of 2022; it is pessimistic that the pig industry can enter the next cycle of upward channel in 2023.

Start to compete for "family assets"

　　After researching the markets in many regions of the country, a researcher of agricultural products from an institution told a reporter from China Business Daily that in October 2021, some pig farmers no longer lost money, and even started to make profits, and the industry's losses were not as serious as imagined.

Overall, pig farming will still be profitable in 2021.

　　"The profitability of different breeding entities is different." Li Ming also admitted that the different profits of breeding entities are determined by changes in the cost of piglets, and the cost of piglets is affected by factors such as the cost of breeding sows, production performance indicators, and site depreciation. .

According to the monitoring data, in 2021, the profit of the outsourced piglet model will be -278.63 yuan/head, and the profit of the self-propagating and self-raising model will be 597.28 yuan/head.

　　When the self-propagation and self-raising model is still profitable, why are the losses of pig enterprises so huge?

The above-mentioned person in charge of a pig company in Henan said that most domestic pig companies adopt the model of outsourcing piglets. In addition, some companies pursue expansion after making money in pig raising, so that the cash flow of the company is very easy. problem appear.

The pig industry is one of the industries most prone to cash flow disruption.

Once you make money in one year, you will invest in expansion. When the investment expansion is completed, the market will be at a low point again. At this time, you have to fight for your money. Without a lot of money, you can't bear losses.

　　The faster the expansion, the more serious the loss of pig enterprises?

Taking Zhengbang Technology, which has the largest pre-loss amount, as an example, in this pig cycle, its live pig slaughter volume increased from 5.78 million in 2019 to 14.93 million in 2021, an increase of more than 158%.

After the speed of business expansion accelerated, the price of live pigs was not high.

Zhengbang Technology stated in the 2021 performance forecast that due to the decline in the domestic pig market price, the company's average sales price of a single pig was 16.6 yuan/kg, a year-on-year decrease of 16.1 yuan/kg, and the single-head revenue fell by 1653 yuan. The increase in sales is superimposed on the sales price. The decline in profit affected 8.873 billion yuan.

　　"Currently, enterprises are faced with the reality that the price of live pigs is constantly falling and the price of feed raw materials remains high, and at the same time, it is necessary to strengthen the work of biosafety and epidemic prevention, which means increasing the investment in breeding costs. In the middle of 2021, it is unavoidable that losses will expand and profits will shrink." Li Ming said.

Market trend is unclear

　　Pig companies are undoubtedly "struggling for the bottom line" at present.

The general manager of a listed pig company told a reporter from China Business Daily: "For companies, the most difficult thing is the financial pressure they have to face when the market is in a downturn, and now they are 'struggling for the bottom line'. Live pigs need to eat feed every day, and other The difference in the industry is that this industry cannot stop production and go out of business to avoid the downturn. In this case, the only way is to passively eliminate sows. Enterprises still have to do what they can, do not blindly expand, do a good job of capital planning, and ensure the safety of the capital chain.”

　　Possibly in order to supplement their "family assets", listed pig companies will also focus on financing at the end of 2021.

At the end of 2021, Muyuan Co., Ltd. stated that the board of directors has passed the additional issuance plan for the controlling shareholder. The additional issuance amount will not exceed 6 billion yuan, and all the funds raised will be used to supplement working capital; Wen's Co., Ltd. also stated that in April 2021, 9.297 billion yuan was issued. Yuan convertible bonds; as of the end of the third quarter, the inventory of cash and cash equivalents exceeded 12 billion yuan. According to the capital stress test, there is sufficient confidence and confidence to successfully pass the bottom of this round of the pig cycle; New Hope also said that the recently issued convertible bonds Convertible bonds will substantially supplement monetary funds, making it about 20 billion yuan in size, laying the foundation for a smooth ride through the pig cycle.

In addition, the management team and the core backbone have completed the increase in holdings, with a total increase of about 19.7 million shares, with a total amount of 256 million yuan.

　　At present, the trend of the pig industry is still unclear.

Li Ming said that the reduction in losses and the phased turnaround occurred in October 2021, when there were fewer pig sources, low secondary fattening and low weight for slaughtering, which were the reasons for the bottoming out of live pig prices.

At present, the body weight and slaughter volume have only declined slightly, which does not meet the turning point conditions. In the environment of reduced pork demand after the year, losses are also normal.

As of the end of December 2021, the number of breeding sows in the country has reached 43.29 million, equivalent to 105.6% of the normal population. From the perspective of supply, the supply of live pigs will continue to increase in 2022.

　　"In the short term, it still depends on whether there is a large room for the decline in the body weight and fattening volume of live pigs, but the mere drop in the number does not mean that the market has changed, and there is no continuity." Li Ming said that under the premise of stable slaughter volume, The improvement of the hog market may be after August 2022, and if market speculation affects the stability of slaughtering, it may be delayed until 2023.

(Reporter Ma Jia)