Pig prices have continued to rise modestly since the end of March.

According to the monitoring data of the Ministry of Agriculture and Rural Affairs of 500 county fairs and collection points across the country, the price of live pigs has been rising for 8 consecutive weeks. In the third week of May, the national average price of live pigs reached 15.45 yuan/kg.

  Shen Yuanbing, a researcher at Brick Consulting, told the First Financial Reporter that the recent continuous rise in pig prices was mainly due to the slowdown in the rhythm of slaughtering pigs at the breeding end and the tight supply of live pigs in some main sales areas under the influence of the epidemic.

  In the first quarter of 2022, pig prices fell sharply, with an average loss of 500 yuan per pig for about three months, resulting in tight cash flow for the entire pig industry.

During this period, some farmers increased their slaughter volume and exacerbated the price drop.

Entering April, the demand for pork has improved, and the price of pigs has bottomed out.

With the restoration of market confidence, the willingness to sell pigs began to weaken, and some farmers appeared to be overwhelmed to a certain extent, and slaughtering companies took advantage of the trend to raise prices.

  However, the recent weekly increase in pig prices has tended to fall back.

Zhu Zengyong, chief analyst for monitoring and early warning of the whole pork industry chain of the Ministry of Agriculture and Rural Affairs, told Yicai.com that as the temperature rises, slaughtered pigs are released one after another. Before the Dragon Boat Festival holiday, there is not much room for pig prices to rise, and overall stability is the main priority.

  Zhu Zengyong said that from the perspective of the supply side, the number of live pigs has been steadily declining since the Spring Festival, and it is changing from an oversupply to a balance between supply and demand.

In March this year, the price of pigs has reached the trough stage of the previous cycle, opening a new round of pig cycles.

Different from the past, this cycle will bid farewell to the era of high profitability, and the overall pig price may fluctuate within a narrow range.

The reason for this is that the capacity reduction in the early stage was relatively mild, the absolute decline in the number of reproductive sows was limited, and the deep loss period was short and discontinuous.

  Although the price of pigs has continued to rise recently, and the market has relatively consistent bullish expectations for the market outlook, the current pig industry still faces two major problems.

  Shen Yuanbing said, first, the domestic pig industry is still facing the contradiction between strong expectations and weak reality.

At present, the supply of live pigs and pork products is still relatively sufficient, and it will take time to reduce the production capacity of live pigs.

However, due to the impact of the epidemic, terminal consumer demand is still weak, and it will take time to restore to normal levels. Combined with factors such as weak economic operation and substitution of other meat consumption, it is difficult to increase pork consumption, and it is difficult to see new demand growth points in a short period of time;

  The second is the high price of feed raw materials.

Due to the large losses in the pig industry in the early stage, although the price of pigs has risen at present, the breeding industry is still in a loss-making stage.

In the medium term, the price of feed raw materials will remain high until the new year corn goes on the market.

  In addition, wheat prices have also increased across the board.

Through the auction of a large number of aged and reserve wheat from the fourth quarter of 2020 to 2021, coupled with the launch of new wheat in 2021, feed mills will purchase a large amount of wheat for feed, and wheat inventories are at a near ten-year low.

In addition, the international market continues to ferment the food crisis, and the cost of various agricultural materials has soared.

At the current price of wheat, it is unlikely that feed companies will purchase wheat for feed, except for low-quality wheat at a price.

  Regarding the operation of pig prices in the second half of this year, Zhu Zengyong believes that pig prices are expected to fluctuate in a narrow range on the whole, mainly due to seasonal rebound.

By the third quarter, it is expected that the overall pig industry will be above the breakeven line of the pig industry, and the industry is expected to achieve a slight profit; in the fourth quarter, the seasonal increase in consumption has led to a rebound in pig prices, and the pig industry is expected to make a small profit before New Year's Day and the Spring Festival.

The Ministry of Agriculture and Rural Affairs also organized live pig production monitoring and early warning experts, comprehensively considering production, consumption, import and other factors, and simulated and predicted the price trend of live pigs in the next six months. In June and July, it will exceed the breeding cost line of about 16 yuan; September and October Pig farming is expected to return to the normal profit range.

  Shen Yuanbing said that the pig cycle has completely reversed this year, and it is extremely unlikely that it will directly enter the rising cycle.

However, there are two points worth paying attention to. First, the price of pigs this year will be near the profit and loss line for a long period of time or will suffer a small loss, which will force high-cost farmers and enterprises to truly reduce production capacity; Judging by yourself, if the bullish expectations are too consistent, it will easily lead to a staged imbalance in the supply and demand structure of the market.

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