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    Home > Food News > Food Articles > Increment is easy to increase income, it is difficult to "guarantee the bottom line" or become a pig enterprise 20...

    Increment is easy to increase income, it is difficult to "guarantee the bottom line" or become a pig enterprise 20...

    • Last Update: 2022-01-23
    • Source: Internet
    • Author: User
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    Production expansion is the first keyword for pig companies in 2021
    .
    Up to now, 12 listed pig companies have disclosed their sales report cards for 2021.
    It is a common phenomenon that it is easy to increase income and difficult to increase

    .
    After a period of rapid production expansion, "guaranteeing the bottom line" may become the focus of competition among pig companies in 2022

    .

    Incremental easy to increase income difficult

    According to the live pig sales briefing in December 2021, 12 listed pig companies will sell a total of 108 million live pigs in 2021.
    The four leading pig breeding companies, Muyuan, Zhengbang Technology, Wen's and New Hope, are stable in terms of sales.
    In the top four, a total of 78.
    3852 million live pigs were slaughtered, an increase of about 72% from 45.
    514 million in 2020

    .

    In 2021, almost all major pig companies are busy expanding production
    .
    Muyuan's annual slaughtering volume of live pigs reached 40.
    263 million, a year-on-year increase of 122.
    26%, ranking first in the industry; although Zhengbang Technology has not achieved the annual slaughtering target of 20 million, it still ranks second with 14.
    9267 million; Wen's shares have the highest completion rate of the annual slaughter target, with a slaughter completion rate of 110%-120%; New Hope has also completed its slaughter target set in early 2021

    .
    It is worth noting that among the 12 listed pig companies, although only Muyuan, Wen's and New Hope have completed their annual slaughter targets as planned, the sales of other pig companies have increased year-on-year.
    Tangrenshen's sales of commercial pigs in 2021 A year-on-year increase of 50.
    56%; Tianbang's sales volume increased by 39.
    06% year-on-year; Dabeinong's sales volume increased by 132.
    8% year-on-year

    .

    Compared with the sharp increase in sales, the income of pig companies has not increased significantly
    .
    Among the top five pig companies in terms of live pig production, only three have achieved positive revenue growth, and the growth rates are all lower than in 2020

    .
    Muyuan shares led the performance list with an operating income of 75.
    09 billion yuan and an income growth rate of 36.
    37%.
    Dabeinong and Tangrenshen achieved an income growth rate of 23.
    89% and 0.
    22% respectively, while the other pig companies whose sales increased significantly had a substantial income.
    slip

    .
    This may also mean that, according to the current sales form, pig companies may not escape the situation of "selling more and losing more"

    .

    Reasonable planning of production capacity may become the primary consideration for pig companies in 2022
    .
    Kong Hailan, a pig industry researcher at the Everbright Futures Research Institute, told the China Business Daily that the future development direction of the industry is to eliminate excess capacity

    .
    At present, the breeding cost of many large-scale pig enterprises is higher than that of individual retail investors, and the losses are also larger

    .
    According to the current loss situation, large-scale breeding enterprises may have plans to reduce production capacity in the future

    .

    Entering a "cooling-off period" after expanding production

    After pig enterprises experienced rapid production expansion, the breeding side may have encountered difficulties and had to enter a "cooling-off period", and "quantity is priceless", causing pig enterprises to face losses
    .
    Gao Yang, a pig analyst at the Agricultural Products Division of Shanghai Ganglian, told a reporter from China Business Daily: "According to the survey, the group of piglets purchasing mainly consists of the group's pig farms.
    At present, the group's pig farms are under great financial pressure, and the piglet purchase plans for some large-scale farms are basically suspended.
    , Piglet sales are difficult, and the market presents an embarrassing situation where there is no market for prices

    .
    In the case of a drop in the price of live pigs in the early stage, large-scale breeding enterprises suffered serious losses

    .
    "

    In the case of a sharp drop in the price of live pigs, the cost issue has brought the breeding side into a "cooling-off period"
    .
    The relevant person in charge of New Hope told a reporter from China Business Daily that the current pig industry is generally facing the problem of rising costs

    .
    First of all, the whole industry is facing a new round of development trend of pig raising, and everyone’s investment in fixed assets and environmental protection of pig farms has generally increased; second, the price of feed raw materials has risen significantly in the first half of 2021; During the rapid development of 2010, the breeding enterprises did not follow up the development of their own production management capabilities in time, and the problem of reduced production efficiency generally appeared

    .
    Various factors have contributed to the rising cost of farming in the industry

    .

    Affected by the low price of live pigs, the business model of high investment and low return may also make pig companies have to plan their production capacity reasonably
    .
    The relevant person in charge of Muyuan Co.
    , Ltd.
    also said that the company's capital expenditure per pig head has increased compared with the previous period.
    On the one hand, it is the reason for the statistical caliber of production capacity.
    At present, the production capacity disclosed by the company refers to the production capacity of the fattening house built by the company.
    Due to reasons such as differences in construction speed and changes in production-side demand, the company has large differences in the delivery time of different types of pig houses such as pregnancy houses, lactation houses, and fattening houses during the same period, so that the production capacity of other types of pig houses is larger than that of fattening houses; another On the other hand, due to factors such as epidemic prevention, the investment in auxiliary facilities and intelligent equipment of pig houses has also increased

    .

    "For New Hope, the two major industries of pig raising and white feather poultry will maintain their existing production capacity in 2022, improve their internal skills, improve production efficiency, and reduce production costs, and will not make too much investment in new production capacity
    .
    " The relevant person in charge of New Hope said

    .

    "Securing the bottom line" may become the top priority

    After the high-speed expansion period, the focus of competition among pig enterprises may change from "quantity competition" to "guarantee the bottom line", and seek reasonable development space in the downward stage of the pig cycle
    .

    The relevant person in charge of New Hope said frankly that in 2021, the live pig industry has experienced a sharp decline from the top of the cycle to the bottom of the cycle, and the price of live pigs has plummeted from more than 35 yuan/kg at the beginning of the year to about 12 yuan/kg in the second quarter
    .
    In 2022, the whole industry may still be at the bottom of the cycle.
    After the Spring Festival, the price of live pigs will first see a significant downward trend.
    It may reach the lowest point of the year in the middle of the year, and may usher in a trend reversal at the end of the year.
    into the upward range

    .

    "In terms of output, especially the number of pigs to be slaughtered, there will be a large increase
    .
    But this increase is more based on the existing production capacity.
    By improving production efficiency, the production full load rate, sow production performance, fattening Indicators such as pig weight gain efficiency have been improved

    .
    This increase in production also helps to reduce the allocation of various asset inputs and helps reduce breeding costs

    .
    It is not simply to seize market share to expand production

    .
    "New Hope is responsible for people said

    .

    The relevant person in charge of Muyuan Co.
    , Ltd.
    also said that the company will achieve a complete cost of 13 yuan/kg in stages as the goal of cost reduction in 2022

    .
    In the next step, the company will reduce the dispersion of the company's internal breeding performance and reduce the overall breeding cost by improving the operation of high-cost and backward farms and subsidiaries, and strengthening internal management and personnel empowerment training

    .
    The relevant person in charge of Dabeinong also told the China Business Daily reporter that the next step will be to highlight the development of industries such as biotechnology and crop breeding, and will also deploy the digital agriculture industry to expand development space in many fields

    .

    "If companies want to turn losses into profits or expand their profit margins, they will generally choose to reduce costs and increase efficiency
    .
    " Li Ming, a pig analyst at the Agricultural Products Division of Shanghai Ganglian, said, "Under normal circumstances, the management costs of enterprises account for a small proportion, and the decline is limited.
    , and the cost of feeding accounts for about 70% of the total cost.
    Many companies use futures, options and other financial derivatives to lock in the cost of purchasing raw materials, and then match with the continuous improvement of daily ration technology, adjust the formula ratio, and further reduce feeding costs.

    In addition, optimizing the production efficiency of sows, shortening the fattening days of live pigs safely and reasonably, and increasing the utilization rate of stalls are the main ways for enterprises to reduce costs
    .
    "

    The task of reducing costs is long and arduous
    .
    Zhu Zengyong, a researcher at the Beijing Institute of Animal Husbandry and Veterinary Medicine of the Chinese Academy of Agricultural Sciences, told the China Business Daily reporter: "When the price of live pigs is in a downward space, cost reduction and efficiency improvement are the primary tasks facing the future industry

    .
    However, cost reduction is a medium and long-term process.
    It depends on management and business strategies at times, and on scientific and technological development in the medium and long term

    .
    For the breeding side, the first is to do a good job of epidemic prevention and control; the second is to moderately eliminate outdated sows and increase the litter size and survival rate; the third is to do a good job in nutrition management , improve the feeding efficiency

    .
    For leading enterprises, while doing the above points, they should also adjust the focus of enterprise development in a timely manner, improve the research and development of science and technology required by the industry, and provide support for improving the cost competitiveness of enterprises

    .
    Use financial risk tools such as "insurance + futures" to reduce market risks in production

    .
    "

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