Every pig that raises a loss of more than 500 yuan, the price of pigs has fallen to the end...

Has the price of live pigs fallen to the end? On the one hand, the sales performance of listed pig companies in April was sluggish, and many leading companies are looking for a way out to reverse the decline in performance; on the other hand, the breeding end has already suffered losses, and raising a commercial pig will lose 500-600 yuan
.

It is worth noting that the price of live pigs may still have downside

Loss at the breeding end

The price of live pigs has been steadily falling, so do you have to lose money when raising pigs? According to data from Zhuochuang Information, a commodity analysis agency, as of May 11, the national average price of live pigs (foreign three yuan) for slaughter was 18.
52 yuan/kg, a cumulative decline of 15.
28% since May
.

The average profit of breeding and self-raising at the breeding end was 584.

On the other hand, the losses of the farmers who purchased piglets are also increasing
.

Zhu Zengyong, an associate researcher at the Beijing Institute of Animal Husbandry and Veterinary Medicine, Chinese Academy of Agricultural Sciences, told China Business Daily that from the perspective of the profitability of outsourced piglet fattening farmers, starting from April, a 115 kg commercial pig will cause a loss of about 500 yuan.

Some listed pig companies have stopped purchasing piglets
.

Chen Xingyao, vice president and chief financial officer of New Hope Liuhe, stated in the 2020 online performance meeting: “It turned out that the company purchased a large number of piglets and breeding pigs, resulting in higher cost of fat pigs

Affected by the fall in the price of live pigs, the sales performance of listed pig companies in April this year fell
.

The sales prices of commercial pigs at the top listed pig companies are falling

There is still downside for live pig prices

Li Jinghui, deputy secretary-general of the China Animal Husbandry Association, told the China Business Daily: "At present, the average cost of the pig breeding industry is 16-17 yuan/kg, while the price of live pigs is 19 yuan/kg.
There is still more than 10% of the price difference.
Gross profit space
.

This means that the current amount of live pig production capacity recovery is still less than the demand for pork, and there

Zhu Zengyong believes that the current price of live pigs is still higher than the cost line of self-reproduction and self-raising, which means that the current live pig market has not yet reached the balance of supply and demand
.

If it is a periodical oversupply, then under normal circumstances, the price of live pigs will fluctuate around 20% of the cost line, and then rebound after a period of time to enter the next cycle

It is worth noting that for self-reproductive and self-raising companies, there is still a certain profit margin for piglets
.

"For a long time, the pig breeding industry in China has been a "three-legged" pattern of breeding pigs, fat pigs, and slaughter.

Zhu Zengyong said that the price of live pigs is still in the downward stage, while the price of piglets is still at a high level, and the cost of feed is still high
.
For the breeding end, if the management level is not well controlled and the fattening cost is high, then the future market risk faced by the outsourced piglet farmers in the downward channel of pig prices will be higher
.

Self-propagation and self-support are more popular?

At the stage of declining live pig prices, the actions of large pig companies have attracted attention from inside and outside the industry
.
In order to reverse the current decline in performance, listed pig companies have begun to reduce costs
.
The industry generally believes that compared to the "company + farmer" model, the self-reproduction and self-raising model adopted by Muyuan shares has certain advantages in cost control, and the biggest feature of the self-reproduction and self-raising model is that the company does not need to purchase piglets out of the box.

.

Reducing the dependence on externally purchased piglets has become a key task for current companies to reduce costs
.
Chen Xingyao said that the large number of purchased breeding pigs made the company's self-breeding piglet fattening cost close to 20 yuan/kg in the first quarter of this year.
At present, the purchased fattening has caused the company a loss
.
New Hope’s current stock of reproductive sows is about 1.
1 million, about half of which are from outsourcing, and all sows will be replaced by self-produced sows
.

Wen's shares, whose net profit fell by more than 40% in the first quarter, stated on the investor interactive platform that some of the company's purchased piglets were fattened and listed in the first quarter because the cost of purchased piglets was higher than that of self-produced piglets, which dragged down the performance.

.
The company will quickly reduce the number of outsourced piglets.
When the number of self-produced piglets increases and the company's production capacity is released, the cost will be greatly reduced
.

It is worth noting that at this stage, many listed pig companies have adopted the "company + farmer" model, and it may be difficult to fully realize self-reproduction and self-support in the short term
.
In addition, for China's current pig breeding industry, relying on large-scale enterprises alone is not enough to achieve the sound development of the overall industry
.

"Holding together for warmth" or the direction of the industry

At present, the most serious losses are the small and medium-scale breeding enterprises and retail investors, and these enterprises and retail investors are the key to determining whether the pig breeding industry can develop in our country
.
For large-scale enterprises and small-scale aquaculture enterprises, and retail investors, "group for warmth" may become the future development direction of the industry
.

He Xintian, secretary general of the China Animal Husbandry Association, told a reporter from China Business Daily: "The large-scale breeding of more than 500 pigs per year accounts for about 50% of the entire pig breeding industry, and nearly half are relatively scattered retail investors.
We still need to improve standardization.
The level of large-scale breeding
.
Our leading enterprises still need to strengthen cooperation with small and medium-sized breeding enterprises, and establish a mutually beneficial benefit connection mechanism, so that these small and medium-sized breeding enterprises can become a part of the production of large enterprises
.
"

In the past few years, leading pig companies such as Wen's Co.
, Ltd.
and Zhengbang Technology have helped tens of thousands of small and medium-sized farms through the methods of "company + farmer", "company + family farm", as well as trusteeship and lease and franchising
.
In the long run, improving the level of large-scale breeding is still the direction of the development of the pig breeding industry
.

"Some time ago, the African swine fever epidemic led to a reduction in the supply of live pigs, and the price of pork was too high.
At this time, it is precisely these small and medium-scale breeding enterprises and retail investors who withdraw from the breeding industry
.
If the leading enterprises can provide feed, technology, and epidemic prevention, they will be unified.
Acquisitions can play a positive role in stabilizing the market for live pigs, thereby boosting the healthy development of the industry
.
" He Xintian said
.