When will the pig price get out of the down cycle

This year, the national pork price has fallen sharply, causing widespread concern

Pig prices have limited room for rebound

Affected by the good news of the entrusted market's purchasing and storage, the national pig price has stopped falling and rebounded recently

Monitoring data from the Ministry of Agriculture and Rural Affairs showed that the national live pig price fell to 13.

Zhu Zengyong, a researcher at the Beijing Institute of Animal Husbandry and Veterinary Research of the Chinese Academy of Agricultural Sciences, summarized four reasons for the rapid rebound of pig prices in the short term

After the pig price bottomed out and rebounded, it will rise from then on, or whether it will fall and then hit a new low is a matter of general concern to society

"After the price of pigs rises beyond expectations, there will be shock adjustments in the short term, but the possibility of a sharp fall is unlikely .

From the perspective of supply, the growth rate of commercial pig slaughter will slow down, and pork imports will also tend to decline

The break-even point will move down

For farms, in addition to the state's purchase and storage of the market, there is also good news that feed prices have dropped significantly

The main continuous contract price of DCE corn fell from 2872 points on May 12 to 2556 points on July 12, a sharp drop of 11%

In the cost of pig breeding, feed occupies a very high weight

According to the early warning mechanism set by the National Development and Reform Commission, when the pig-to-food price ratio is lower than 6:1, a three-level warning will be issued; when the pig-to-food price ratio is between 5:1 and 6:1 for 3 consecutive weeks, or the stock of sows can be reproduced When a single month’s year-on-year decline reaches 5%, or the number of breeding sows has decreased by 5% to 10% for three consecutive months, a secondary warning will be issued; when the price ratio of pigs to food is lower than 5:1, the stock of breeding sows may be A first-level warning is issued when the volume of a single month has decreased by 10% year-on-year, or the number of breeding sows has decreased by more than 10% for three consecutive months

Once the first-level early warning is triggered, the state will initiate the purchase and storage of the market

Customs data shows that from January to June, China's corn imports increased by 318.

When to return to the upward cycle

Does the pig price bottoming out mean that the price rise cycle will start?

Zhu Zengyong said that it is too early to talk about the upward cycle

Take 4 complete cycles in history as an example.

From the perspective of the number of pigs slaughtered in different cycles, the peak number of pigs slaughtered in the first cycle from 2003 to 2006 was 610 million

The fifth cycle is currently running
.
Zhu Zengyong told reporters that this round of "pig cycle" started in June 2018, superimposed on the African swine fever epidemic, the new crown pneumonia epidemic, the adjustment of environmental protection policies, the adjustment of policy adjustments for pig products, and the production cyclical factors, which are very different from the previous cycles.
The big difference
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Under the impact of the African swine fever epidemic, the number of live pigs in China in 2020 has dropped by 25% compared with 2017.
After unremitting efforts, production capacity has returned to normal levels.
The stock of sows capable of breeding in June has exceeded the level of 2017
.
It is precisely because of the abundant supply of live pigs that prices have continued to fall this year
.

This means that the pig breeding industry must be mentally prepared for a protracted battle
.

Zhu Zengyong said that since June this year, breeding companies and farmers have increased the elimination of backward production sows under the guidance of the production warning information and market mechanism announced by government departments.
The current price of binary sows and piglets has dropped significantly.
This is a good time for farmers to reproduce sows and improve production efficiency
.
Although the number has fallen, the number of commercial pigs provided by each sow has increased, which not only helps reduce costs, but also effectively guarantees supply
.