Responding to the super "pig cycle": if the price of pigs cannot be controlled, then control the raising

 　　Although since October, the price of pigs has ushered in a wave of long-lost increases in the market, the price of live pigs has risen by nearly 50%
.
However, it is still in the cycle of falling pig prices, and the situation of easing production capacity of live pigs has not changed.
The primary problem facing the pig industry is still how to reduce costs and increase efficiency
.
mfa China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Reasons for the drastic fluctuations in pig pricesmfa China Feed Industry Information Network-Based on feed, serving animal husbandry

　　On October 25, according to the monitoring data of Souzhu.
com, the national average price of lean pigs for slaughter was 15.
52 yuan/kg, an increase of 0.
89 yuan/kg from 14.
63 yuan/kg the day before, a single-day increase of 6.
08%; compared with last year In the same period, 29.
42 yuan/kg dropped by 13.
9 yuan/kg, a year-on-year decrease of 47.
25%
.
mfa China Feed Industry Information Network-Based on feed, serving animal husbandry

　　From a rare high to this year's low, Chinese pig prices are going through a super "pig cycle"
.
According to Brick’s agricultural data, from January 2, 2018 to October 25, 2021, the minimum national pig price was 9.
76 yuan/kg, the maximum was 40.
97 yuan/kg, and the average was 21.
73 yuan/kg
.
During this time period, the minimum profit of pig farming was -1333.
76 yuan/head, the maximum was 3244.
43 yuan/head, and the average value was 509.
4 yuan/head
.
mfa China Feed Industry Information Network-Based on feed, serving animal husbandry

mfa China Feed Industry Information Network-Based on feed, serving animal husbandry

mfa China Feed Industry Information Network-Based on feed, serving animal husbandry

　　At the 2021 China Agriculture and Animal Husbandry Industry (Derivatives) Conference Live Pig Forum and the first China Live Pig Trade Conference held on October 21, Qin Jun, Secretary of the Board of Directors and Chief Strategy Officer of Muyuan Co.
, Ltd.
stated that although as a bulk agricultural product, the price of live pigs fluctuates.
This is normal, but when viewed globally, it is unique that the price of live pigs in China fluctuates by such a large margin
.
mfa China Feed Industry Information Network-Based on feed, serving animal husbandry

　　He believes that there are two reasons for this
.
mfa China Feed Industry Information Network-Based on feed, serving animal husbandry

　　First, the industry concentration is not high
.
Take the proportion of farms (households) in the number of large-scale pig farms in 2018 as an example.
The proportion of farms (households) that produce more than 1,000 pigs per year is 69.
6% in Denmark, 51.
2% in the Netherlands, 24.
3% in France, 19.
3% in Germany, and 19.
3% in the United Kingdom.
It was 13.
8% and Spain was 13.
7%
.
However, China only has 0.
2%
.
mfa China Feed Industry Information Network-Based on feed, serving animal husbandry

　　In the United States, the sow inventory of the top ten pig companies in 2018 accounted for about 45% of the country
.
In China, after these years of rapid development, the market share of the top ten pig raising companies will only exceed 12% in 2020
.
mfa China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Qin Jun said that the scattered producer group is huge, and based on subjective wishes, they all hope to avoid the impact of pig price fluctuations on production and operation, but this effort eventually becomes a procyclical behavior, that is, "chasing the rise and killing the fall
.
"mfa China Feed Industry Information Network-Based on feed, serving animal husbandry

　　The second is pork consumption structure
.
In the United States, meat consumption is dominated by processed meats such as ham and sausages, and fresh meat accounts for a relatively low proportion; fresh meat consumption accounts for only 9% of meat consumption
.
But in China, meat consumption is dominated by fresh meat
.
Among them, hot fresh meat occupies a dominant position in consumption, accounting for 65%
.
The cold meat is only 10%
.
mfa China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Qin Jun mentioned that this round of super "pig cycle" has pressed the "accelerator" of the industry, such as rapid increase in concentration, integration of the industrial chain, and irregular cost distribution
.
mfa China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Regarding the irregular cost distribution, it refers to the current large-scale breeding enterprises.
The cost of raising pigs is 18-20 yuan/kg, or even higher, while the cost of retail households is maintained at the level of 14-15 yuan/kg, which is completely different from African pigs.
The situation before the epidemic has caused confusion in the industry
.
mfa China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Qin Jun explained that this situation is largely due to the rapid expansion of the industry brought about by high profits, which leads to the loss of management efficiency.
This is only a phased phenomenon; coupled with the upgrade of equipment, the improvement of management, and the improvement of talents.
The establishment of echelon is also the tuition fee that the entire industry must pay.
These are normal phenomena
.
mfa China Feed Industry Information Network-Based on feed, serving animal husbandry

　　On September 24, 2020, in Houshijiabao Village, Qingyunbao Town, Kaiyuan City, the breeders of the Lijun Pig Breeding Factory were feeding the pigs
.
Xinhua News Agency
.
mfa China Feed Industry Information Network-Based on feed, serving animal husbandry

　　How to reduce costs and increase efficiency in the pig industry?mfa China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Fluctuations in pig prices have brought about fluctuations in the income of pig companies, especially during the rapid decline of pig prices.
Because large-scale factories have capital advantages and are unwilling to reduce production, small retail investors have cost advantages and are more able to resist low pig prices, resulting in a change in the speed of this round of capacity reduction.
Slow, the bottom time may be lengthened, which brings challenges to pig companies
.
mfa China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Xia Chenfeng, chief analyst of Rural Credit Union, believes that in the short term, the direct impact of African swine fever on production will be greatly reduced in the future, the sow structure will also use efficiency to make up for the elimination, and imported pork will decrease as the price of pigs falls
.
In the long run, the supply of live pigs in 2021 will be slightly lower than the normal level, and the supply will accelerate in 2022; pork imports will remain high; pork consumption will not fully recover; the pig cycle will not disappear, and the time will be prolonged.
Supply and demand will be more relaxed in 2022
.
mfa China Feed Industry Information Network-Based on feed, serving animal husbandry

　　In the downward cycle of pig prices, the price of pigs has recovered recently, but the overall price is still below the cost line
.
At any time, low-cost pig raising ability is the core of pig farm development
.
mfa China Feed Industry Information Network-Based on feed, serving animal husbandry

　　At the 10th Leman China Pig Raising Conference held a few days ago, Zhang Conglin, the president of Yangxiang's pig raising business department, told a reporter from China Business News, "We can't control the price of pigs, but we can control the cost of pig raising
.
"mfa China Feed Industry Information Network-Based on feed, serving animal husbandry

　　He said that the current status of the pig industry is that there are more pigs, low prices, high costs and losses
.
Low-cost production is an effective way to ensure the sustainable development of pig raising, and the control of pig raising costs will become a key factor in determining the survival of pig farms
.
"mfa China Feed Industry Information Network-Based on feed, serving animal husbandry

　　How to reduce the cost of pig raising? Zhang Conglin suggested that it can be achieved through two paths, one is to reduce direct costs from feed and reducing the rate of sows killed by sows, and the other is to start with indicators such as sow farrowing rate and healthy piglets per litter.
Realize more lives, fewer deaths, and faster growth
.
mfa China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Li Jialian, chairman of Showbo Gene, told the CBN reporter that China's pig industry is currently affected by the African swine fever, the new crown epidemic, and the pig cycle, and the uncertainty has increased
.
In the process of the transformation of China's pig industry from "quantity accumulation" to "quality improvement", the breeding system of improved breeds has been impacted, with shortage of good breeding pig resources, increased disease risks, and strong demand for improved breeding pig performance
.
mfa China Feed Industry Information Network-Based on feed, serving animal husbandry

　　He believes that the current pig farming industry needs to "regenerate", eliminate low-efficiency production sows to reduce capital losses, and retain backbone production sows to stabilize the breeding system
.
mfa China Feed Industry Information Network-Based on feed, serving animal husbandry

　　In the process of reducing costs and increasing efficiency, pig raising companies should review the current situation and continuously strengthen close cooperation with the emerging Internet and intelligent service industries to solve the "pig cycle" problem
.
mfa China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Lei Xianzhong, chairman of Wuhan Golden Dragon Group, said that intelligent pig raising and the use of Internet technology may create new development opportunities for pig companies.
For a moderately large pig farm that produces 50,000-100,000 heads per year, it is more cost-effective to upgrade to digital intelligence
.
mfa China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Xue Suwen, chairman of Rural Credit Interconnection Group, told a reporter from China Business News that during the period of pig price shocks, the key ability of pig companies to continue their lives is the continuous supply of cash flow
.
Enhancing the digital intelligence competitiveness of pig enterprises is the basis for obtaining operating, debt, and equity cash flows.
From the governance of people to the governance of numbers is the core concept of the next generation of enterprise management, and it is the watershed for pig enterprises to win the next cycle
.
To fundamentally improve the competitiveness of digital intelligence, large companies may be able to invest heavily in re-planning.
For small and medium-sized enterprises, embracing a mature industrial digital intelligence ecological platform is the most reliable solution at present
.
mfa China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Jiang Renzhong, secretary-general of the Tsinghua Internet Industry Research Institute, said that the agricultural industry Internet is the last blue ocean of the industrial Internet.
The value of data and intelligence in the future will ultimately be the entity, and the digital intelligence of agriculture and animal husbandry must be a blue ocean
.
In the process of building the agricultural industry Internet, the principle of "internal digital management to achieve cost reduction and efficiency increase, and external industrial chain collaboration to improve overall efficiency" should be followed
.
mfa China Feed Industry Information Network-Based on feed, serving animal husbandry

　　Fu Wenge, director of the MBA Center of China Agricultural University, believes that from the uncertainty of raw materials and sales prices, coupled with the impact of weather changes, epidemics, and industrial cycles, the agriculture and animal husbandry industry is becoming a high-risk industry
.
He suggested that we should attach great importance to risk control, establish a risk control system, and cultivate risk control talents, especially to vigorously promote the construction of digital and intelligent systems in the agriculture and animal husbandry industries
.
mfa China Feed Industry Information Network-Based on feed, serving animal husbandry