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    Home > Food News > Food Articles > The pig industry has entered the "production reduction and weight reduction period" who will be out...

    The pig industry has entered the "production reduction and weight reduction period" who will be out...

    • Last Update: 2021-10-10
    • Source: Internet
    • Author: User
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    The current pig market in China is in a situation where supply exceeds demand
    .
    As of the end of the second quarter of this year, the stock of reproductive sows in China was 45.
    64 million, which is 11.
    3% higher than the normal reproductive sow population in the recently announced "Implementation Plan for Pig Production Capacity Regulation (Interim)" (hereinafter referred to as the plan).
    , Has been in a state of excessive increase in the regulation of the red area

    .
    People in the industry generally believe that the issuance of the plan is conducive to the maintenance of supply and price stability in the live pig market, and the live pig industry may usher in a "big reshuffle" from now on

    .

    Is the "cutting period" coming?

    According to data from the National Bureau of Statistics, at the end of the second quarter, there were 45.
    64 million reproductive sows, an increase of 9.
    34 million over the same period last year, an increase of 25.
    7%, and an increase of 5.
    7% over the end of the first quarter

    .
    In the pig industry, the stock of reproductive sows directly determines the supply of live pigs.
    This plan focuses on regulating the stock of reproductive sows

    .
    The plan pointed out that the normal population of reproductive sows should be stabilized at about 41 million, and the minimum population should not be less than 37 million

    .
    According to data from the National Bureau of Statistics, there are 45.
    64 million reproductive sows, an increase of 9.
    34 million over the same period last year, an increase of 25.
    7%, and an increase of 5.
    7% over the end of the first quarter

    .
    This means that the current stock of reproductive sows is 11.
    3% higher than the normal stock

    .

    Many people in the industry have said that in order to protect the profits of the pig industry, the current pig production capacity has to be reduced
    .
    Chen Xiaoyu, a pig analyst at the Agricultural Products Division of Shanghai Iron and Steel Union, told a reporter from China Business Daily: "Calculated on the basis of the 41 million head stocks given in the plan, the current pig production capacity is in a phased oversupply situation, and the elimination of low-yielding mothers may be accelerated in the future.
    Measures such as pigs to reasonably adjust the stock rhythm of breeding sows

    .
    "

    Kong Hailan, a researcher in the pig industry at the Everbright Futures Research Institute, also told a reporter from China Business Daily: “The stock of reproductive sows also represents the production capacity of pigs
    .
    The current stock of reproductive sows is higher than before the African swine fever outbreak.
    I think the current supply of live pigs exceeds demand, and the future development direction of the industry is to eliminate excess capacity

    .
    "

    According to the plan, the changes in the stock of reproductive sows are divided into green, yellow and red areas, and corresponding control measures will be taken at each stage
    .
    At present, the production capacity of live pigs is in the red zone, and the industry will reduce production capacity and accelerate the elimination of low-capacity breeding sows

    .

    It is worth noting that due to the high profits in the pig industry before, many large-scale enterprises and retail investors have increased their production capacity
    .
    A pig farmer from Shandong told the China Business Daily that there are indeed farmers around him that have doubled the production capacity of sows and piglets

    .
    However, because the price of live pigs has repeatedly fallen this year, farmers who have increased production have suffered heavy losses

    .

    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: "Although the stock of reproductive sows has begun to decline, it is difficult to say that the overall basic production capacity of the industry has been significantly adjusted in a short period of time
    .
    What is affected by the reproductive sows is The supply of commercial pigs after ten months

    .
    In the context of increased production capacity, the trend of industrial pig production capacity growth will continue for some time

    .
    "

    Has the production of large-scale pig companies reduced?

    At the end of last year, many listed pig companies that made a lot of money increased their slaughter volume this year
    .
    According to data from Shanghai Steel Union-My Agricultural Products Network, as of August this year, 11 listed pig companies including Wen's Co.
    , Ltd.
    , Muyuan Co.
    , Ltd.
    , New Hope Liuhe, Tianbang Co.
    , Ltd.
    , and Dabeinong have accumulated an average completion rate of tasks during the year.
    It is 46.
    7%, which is at a low level

    .
    Chen Xiaoyu said that this has something to do with the drop in live pig prices and the continued losses of the pig industry

    .
    As the price of live pigs has fallen, the rate of slaughtering pigs by major pig companies has also slowed

    .

    In the eyes of industry insiders, large-scale pig companies may take advantage of the trend to reduce production
    .
    Kong Hailan said: "At present, many large-scale pig companies have higher breeding costs than individual retail investors and have larger losses

    .
    Based on the current loss situation, large-scale breeding companies may have plans to reduce production capacity in the future

    .
    "

    The plan also gives clear production guidance to large-scale pig enterprises
    .
    The plan points out that the country’s existing large-scale pig farms (households) with an annual output of more than 500 pigs shall be filed, combined with the development trend of large-scale pig breeding, to determine the number of large-scale pig farms (households) nationwide and in various provinces

    .
    The number of large-scale pig farms (households) shall be maintained in general in all regions and shall not be demolished illegally.
    If it is necessary to demolish, the farming land shall be arranged to support the reconstruction in other places, and reasonable economic compensation shall be given

    .
    If large-scale pig farms (households) voluntarily withdraw, all localities shall build or rebuild large-scale pig farms with corresponding production capacity based on the reduced production capacity of reproductive sows to ensure the overall stability of pig production capacity

    .

    "If the current pig production capacity begins to enter the elimination cycle, and the elimination rate is relatively large, the future supply of pigs will decline, which will definitely be good for the future sales of pigs for large-scale enterprises
    .
    " Kong Hailan said

    .

    Will retail farmers be eliminated first?

    At present, China's pig industry, large-scale pig farms and individual retail investors are almost evenly divided into the world
    .
    According to the monitoring data of the Ministry of Agriculture and Rural Affairs on the full coverage of large-scale pig farms across the country in 2020, the proportion of large-scale farms with more than 500 pigs for slaughter in China will reach 57.
    1%

    .
    This means that the remaining 42.
    9% of the market is occupied by individual retail investors

    .

    In the downward phase of the "pig cycle", who will withdraw first from large-scale pig farms and retail investors? Chen Xiaoyu told a reporter from China Business Daily that policy support is still moving closer to large-scale farms
    .
    In the subsequent development of the pig industry, the remaining production capacity after the exit of retail investors may gradually be taken over by large-scale breeding companies

    .

    "Some retail farmers missed the period of high profits for pig raising, and they withdrew without making any money during the down phase of the'pig cycle'
    .
    There are also some retail farmers who have accumulated a certain amount of capital during the period of high profitability of pig raising, and the downfall of the'pig cycle' The stage is still hard to carry

    .
    " Kong Hailan said

    .

    Is the reduction of production capacity in the pig industry good for retail farmers? Zhu Zengyong told a reporter from China Business Daily that, compared with aquaculture companies, small and medium-sized households are greatly affected by market fluctuations and poor production stability.
    There is a phenomenon of rushing up and down

    .
    At the same time, due to information asymmetry, retail farmers are susceptible to interference from market hype information

    .
    The plan consolidates the responsibility of local governments to stabilize production and guarantee supply.
    The authoritative, objective and fair warning information issued by the official will guide farmers to reduce panic clearance or irrational and speculative replenishment, thereby reducing the risk of the live pig market and increasing Production stability

    .

    "The removal and elimination of small and medium-sized households is affected by market rules.
    Some farmers with outdated management, technology and concepts will be eliminated due to market fluctuations.
    However, after the implementation of the plan, through temporary assistance, financing and other production stabilization support measures, it can be Guarantee the normal production and operation activities of small and medium-sized households with high management level and potential for optimization and upgrading, and guide them to rationally adjust the

    inventory structure .
    " Zhu Zengyong said

    .

    What impact will the reduction in production have on the live pig market?

    According to data from the Shanghai Steel Union-My Agricultural Products Network, the current national average price of live pigs is 10.
    71 yuan/kg

    .
    After the pig industry enters the "production reduction and weight reduction period", the price of live pigs may rise to a certain extent, and the industry's losses will also be alleviated

    .
    Kong Hailan said that referring to the data in the past ten years, when there are 41 million sows capable of breeding, the corresponding live pig price is 10-15 yuan/kg.
    Therefore, according to the plan guidelines, it is estimated that the price of live pigs will fluctuate mainly in this range in the future.

    .
    After adjusting the stock of reproductive sows, the number of live pigs for slaughter should decrease in May next year, and then the price of live pigs will return

    .

    Chen Xiaoyu also said: “The pig industry has obvious characteristics of cyclical volatility, and the regulation of national policies may alleviate the cyclical fluctuations of pig production to a certain extent
    .
    According to the plan, you can first pay attention to the reduction of pig production capacity and the reduction of pig slaughter weight.
    Second, focus on the recovery of terminal pork consumption and the number of frozen meat imports, and finally focus on other unstable factors

    .
    "

    In addition, industry insiders generally believe that after the issuance of the plan, the scale of China's pig breeding will be further improved
    .
    Kong Hailan said that the plan’s regulation of the production capacity of large-scale pig breeding reflects the country’s emphasis on the process of large-scale pig breeding.
    In this “pig cycle”, the price of live pigs fluctuates under the interference of factors such as the African swine fever epidemic and the new crown pneumonia epidemic.
    The magnitude is greater, and the impact on the aquaculture industry is also greater

    .
    The state hopes that through the continuous advancement and improvement of large-scale pig breeding, the huge fluctuations in market prices caused by the "pig cycle" will be scientifically and effectively stabilized, and the healthy and orderly development of the pig market will be guided

    .

    "Farmers themselves also need to have the inherent motivation to move to a moderately large-scale family farming.
    Only after upgrading and transformation can production efficiency and the ability to withstand market risks in the future be improved

    .
    In addition to ensuring the stability of production, the introduction of the plan is also conducive to Promote the improvement of the scale and production stability of the pig breeding industry in the future, and then drive the transformation and upgrading of the entire industry

    .
    " Zhu Zengyong said

    .

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