Author: Shao Haipeng

　　The average profit per head ranges from 1,050 to 1,100 yuan, and in the end it can only stop the profit at 350 yuan. The experience of raising pigs from small-scale pig farmers in North China Li Dazhuang (pseudonym) is comparable to "stock speculation". The trend of pig prices and the timing of slaughtering determine The ultimate benefit of raising pigs.

From the beginning of September, I bought more than 100 live pigs for secondary fattening. Benefited from the rising price of pigs, after less than 2 months, the net income could have easily reached more than 100,000 yuan, but because the price of pigs then turned down, it took 3 months It had shrunk to 35,000 yuan when it was released.

　　After 3 months of hard work, compared with less than 2 months, the net income has dropped by nearly 70%.

Li Dazhuang's experience is a microcosm of the price trend of pigs from September this year to the present - the recent rise in pig prices began at the end of September, at 24 yuan per kilogram, and it rose to 28.4 yuan around October 20 in just over 20 days.

Then it began to fall, and in November, it fell even more rapidly and sharply, falling to the current price of around 22 yuan, a drop of more than 20%.

While falling below the starting point, it became the low point in the last half year.

　　Originally expected to rise, but encountered a decline in reality.

Feng Yonghui, chief analyst of Sozhu.com, told the first financial reporter, "every winter, especially before the Spring Festival, is the peak season for bacon consumption. If consumption can be effectively recovered at present, it will stabilize the confidence of the pig industry. If consumption cannot recover for a long time , the pig industry will very likely produce a 'barrier lake', that is, the longer the pigs are kept in the pen, the more big pigs will be, and the more pork will be, which will lead to a further drop in pig prices next year."

　　Unpredictable price drop of pigs

　　At the end of each year, supported by the demand for bacon, the price of pigs generally shows an upward trend.

Coupled with the fact that a new round of the pig cycle has started in March this year and is currently in an upward phase, it is especially important to be optimistic about the macro situation in late October and after. .

　　In early September, Li Dazhuang purchased more than 100 pigs for secondary fattening.

At that time, the weight of live pigs was about 110 kg, and the price of pigs was 22.5 yuan/kg.

After one and a half months of fattening, until the end of October, the price trend of pigs was in line with expectations.

Around October 16, the weight of live pigs reached about 145 kg, and the local pig price was 28.5 yuan/kg at that time.

If the pigs are slaughtered at this time, after deducting the cost of buying pigs and feed, the average profit per head will exceed 1,000 yuan.

　　Such gains are already substantial.

In comparison, before the outbreak of African swine fever, under normal circumstances, the profit of pig farmers buying piglets outdoors for fattening and slaughtering was 250 to 400 yuan.

The average profit per head will reach 1050-1100 yuan, which will exceed the sum of the profits of the farmers raising 3 purchased piglets in the past.

　　However, at that time, the market generally expected that the price of pigs would exceed 30 yuan/kg in mid-November.

If this is the case, the average profit per head will further rise to 1,800 yuan, a 60% to 70% increase.

Although Li Dazhuang is an "veteran" in the pig industry, he couldn't resist the temptation. He got hotheaded for a while and didn't stop profit.

　　But in late October, the price of pigs fell instead of rising.

Entering November, it has shown a trend of rapid and large decline.

Despite many reluctances, Li Dazhuang slaughtered all the pigs around November 25.

At this time, the average profit per head is only 350 yuan.

　　From the original possibility of earning more than 100,000 yuan to now only 35,000 yuan in his pocket, Li Dazhuang is still the lucky one.

On the one hand, the breeding level and management level are relatively high, and there is no phenomenon of stress death of live pigs;

　　Lin Guofa, research director of Brick Agricultural Products Jigao.com, told the first financial reporter that farmers who engage in secondary fattening can still obtain the same profit per head as in normal years if they start early.

It is recommended that pig farmers put out the slaughter as soon as possible, otherwise, the longer they stay on the fence, the more difficult it will be for the "cow pigs" (big pigs exceeding the standard weight for slaughter) to be slaughtered. If the demand is still weak and cannot be supported by then, it will easily cause the price of pigs to fall further , It is also possible that the average profit per head will turn from positive to negative.

　　The phenomenon of "difficulty selling pigs" has already appeared.

Pig farmers who started later than Li Dazhuang complained endlessly.

Some farmers buy "standard pigs" (hogs with a standard weight of 220 catties) for second fattening at a price of 24 yuan per kilogram, hoping that the price of pigs will rise to 28-30 yuan before selling.

As a result, the price of pigs suddenly dropped to the current 22 yuan.

　　Judging from the trend of pig prices, from the end of September to around October 20, the price of pigs rose by 4 yuan/kg in more than 20 days.

However, since October 20, the price of pigs has dropped for more than a month, with a cumulative drop of more than 6 yuan/kg.

　　Feng Yonghui said that the increase is not as good as the decrease, and pig farmers who blindly chase higher during the rising stage are bound to fall below the cost line.

If it is said that falling below the cost line makes pig farmers panic, they can still sell them at first. However, due to the impact of the new crown epidemic in some places, pig carts cannot collect pigs normally.

"The price of pigs fell to 6 yuan per kilogram, and 600 yuan per pig was lost. What makes pig farmers even more psychologically broken is that they can't throw away even if they want to." He said.

　　Poor demand takes hog prices out of support

　　In fact, pig farmers who are fattening for the second time are like "takers" in the stock market. The judgment they make is based on the expectation that the price of pigs will continue to rise.

　　In order to speculate on the future rise of pig prices, in the pig industry, secondary fattening is a common phenomenon, specifically referring to large-scale pig farming companies selling live pigs at or near the standard weight (110 kg), and small farmers buying back for secondary fattening , and then go out to the slaughter when the pigs are of larger weight.

According to feedback from the industry, pig farmers who have the same idea as Li Dazhuang have actually started second fattening since August, and this phenomenon reached its climax in late September and early October.

This phenomenon is concentrated in the Northeast and North China regions.

　　Before Li Dazhuang started the second fattening, the rise in pig prices was related to the low supply of pork.

The reasons include, pigs being put on the silo, secondary fattening, and a reduction in pork imports.

　　Lin Guofa said that since July, the production of pig feed has remained at an absolute high level and increased month-on-month, which contradicts the low supply of pork during the same period.

The main reason is that the pigs are delayed in slaughtering, resulting in a decrease in feed conversion ratio and the pork production has not been reflected in the slaughtering situation.

　　From the perspective of imports, customs data show that in the first eight months of 2022, my country imported 1.06 million tons of pork, a year-on-year decrease of 1.75 million tons.

　　The rise in pig prices from September to mid-October was interpreted by the industry as the demand for pork in the fourth quarter will increase significantly, and the price of pigs is bullish. Pig farmers choose to press the stalls and secondly fatten, resulting in a periodic decrease in the number of live pigs sold in the current period. Pig prices are strong.

　　Regarding the sudden drop in pig prices from late October to November, the industry said that this was an expression of "extreme joy and sorrow" in the market.

Lin Guofa said that the weight of live pigs in the early stage is getting bigger and bigger, and a single live pig can supply more pork.

Feng Yonghui even pointed out that pig farmers speculated on the price of pigs, which gave birth to a price bubble.

The second fattening began to appear in large numbers in September, and in October there was collective pressure on the stalls.

"There are pigs that are not sold, creating the illusion of a shortage of pigs, and the price bubble will burst sooner or later."

　　What is particularly important is that after late October, market expectations that pork consumption will pick up, thus supporting the rise in pig prices, have not been fulfilled.

From the perspective of resident consumption, such as family daily meals, external dining demand, and residents' seasonal homemade bacon and sausage demand have all declined; from the perspective of corporate consumption, the start of peak season production has been postponed, and it is still in the small batch production test market.

In addition, because chicken is more competitive than pork, some companies choose to adjust the production structure of products, reduce the production of products with high pork content, or adjust the formula of raw materials to appropriately reduce the content of pork in products containing pork and chicken.

In addition, as the price difference between beef and pork narrows, production enterprises will appropriately increase the development of beef products.

　　The persistently sluggish demand has caused the price of pigs to stagnate, and there will be a certain decline.

Under such a switch of expectations, the main farmers are worried that the price of pigs will fall further in the future, the willingness to sell live pigs increases, and the price of pigs falls rapidly.

　　Although the price of pigs has fallen, the feelings of urban consumers are not obvious. The price of pork in supermarkets has not been significantly lowered, and even slightly increased.

　　Lin Guofa believes that the drop in pig prices would have led to a drop in pork, but on the one hand, the logistics at the retail end are limited, which has led to an increase in pork transportation costs. On the other hand, operating costs have increased since June this year, making it difficult to make profits. .

Feng Yonghui said that the catering industry usually wholesales pork from the farmer’s market, which is more sensitive to the transmission of the price relationship of the slaughtering company, while consumers buy pork from the retail side. The price of pork in supermarkets is generally stable for a long time, and some cities are also under epidemic control. Consumers have limited choices.

　　New features of this pig cycle

　　The rise and fall of pig prices experienced by Li Dazhuang is actually not outstanding if you look at the trend of pig prices throughout the year.

Since the end of March this year, the price of pigs has officially confirmed its upward trend after falling to 11.5 yuan/kg.

The industry regards it as the opening of a new round of pig cycle.

　　In the current pig cycle, the sharp rise and fall of pig prices has become a prominent feature.

For example, similar to the rapid rise in pig prices from the end of September to mid-October and the rapid decline from late October to the present, there has also been a sharp rise from the end of June to the beginning of July, and a decline from the beginning of July to the end of July.

　　Since March, the price of pigs has risen as a whole.

Especially at the end of June and early July, the market generally expects that the supply of live pigs will be tight from July to August, and the price of pigs will continue to rise without any correction during the period, with a single-day increase of more than 1 yuan/kg.

Taking the first week of July as an example, continuing the rising trend in late June, the price of pigs first broke through the important threshold of 20 yuan/kg, and then rose by 20% within a week. The national average price approached 24 yuan/kg, breaking through in many places in China. 25 yuan/kg.

In early July, the country carried out powerful macro-control, and the price of pigs began to fall.

From 23.9 yuan/kg on July 5, it quickly fell back to 21.5 yuan/kg on July 8.

However, it rose again to 23.5 yuan/kg on July 10, and then fluctuated and fell for 20 consecutive days.

On July 27, it fell back to 20.5 yuan/kg, and fell below 20 yuan/kg in some provinces.

After hitting a low point, it oversold and rebounded to more than 21 yuan/kg in early August.

　　Behind the rise in pig prices, although it is indeed related to the tightening relationship between supply and demand, the sharp rise in prices is related to market sentiment and capital speculation.

In the process of policy and market game, phenomena such as weight gain and secondary fattening have increased significantly.

　　In response to this feature, Lin Guofa suggested that raising pigs is a business, the core of which is to continuously improve the level of breeding, reduce the cost of unit breeding, treat the price of pigs with a normal mind, and not over-speculate on the price of pigs.

Once the speculation fails, it is likely to face huge losses, or even break the cash chain.

　　Feng Yonghui also suggested that pig farmers should be less speculative and more rational.

For example, hog futures have been on the market for the past two years to stabilize cyclical fluctuations at the macro level. More attention should be paid to hog futures, and production rhythms should be arranged according to the price trend of hog futures medium and long-term contracts to avoid rushing in and out.

At the same time, since self-media hype will exacerbate short-term fluctuations in pig prices, we must learn to avoid being misled by some self-media.