Per reporter: Yu Yaofeng
In 2021, Liu Liang, a small farmer with more than 3,000 pigs, has almost lost all the profits in 2020, but he said that he will continue to raise them in 2022. Zhao Jianhua, another farmer across the county, left the market at the end of 2021 and "will never come back."
In addition to small retail investors, what about big pig companies? Among the pig companies that have released 2021 performance forecasts, except for Makihara shares, all pig companies have lost money, with a total loss of more than 50 billion yuan. Among them, Wen's shares are expected to lose 13 billion to 13.8 billion yuan in 2021, Tianbang shares lose 3.5 billion to 4 billion yuan, New Hope loses 8.6 billion yuan to 9.6 billion yuan, and Zhengbang Technology has a record loss of 18.2 billion yuan to 19.7 billion yuan.
It's another pig cycle, and the pigs that once went to heaven are now at the bottom. According to the data of China Pig Network, on February 10, the price of three-yuan pigs outside the country was 13.34 yuan / kg, and the price of local pigs was 12.94 yuan / kg. But these two days, the stock price of listed pig companies performed well, and on February 9, the pig industry index rose by 4.22%, and Tianbang shares, superstar agriculture and animal husbandry, and Jinxinnong rose and stopped. On February 10, Zhengbang Technology, Aonong Biological, Jinxinnong, and New Wufeng rose and stopped, and the stock price of Makihara shares hit a new high in the past six months. In this regard, some institutions believe that this is the performance of the market's positive expectations for the plate, and some institutions believe that when the current round of pig cycle has not reversed, it is expected that the pig industry will continue to reduce production capacity in 2022, and pig prices will fluctuate to the bottom.
Is it the "three bottoms" to usher in a new cycle, or to continue the difficult adjustment at the bottom? Time is the best answer.
Price versus cost
Zhengbang Technology lost ten years of profits a year
On January 23, less than ten days before the Lunar New Year, Liu Liang looked a little solemn in the lobby of a hotel in Gao'an City, Jiangxi Province.
Gao'an City is a county-level city under the jurisdiction of Yichun City, Jiangxi Province, the pig industry has always been a local traditional advantage industry, there are more than 10,000 pig farms in the city during the peak period, after the special environmental treatment in 2017, thousands of pig farms were demolished. At present, there are less than 1,000 pig farmers in the industry.
Liu Liang has a history of raising pigs in Gao'an for nearly twenty years, both father and son are pig farmers, his father was working in a state-run pig farm before, influenced by his father, Liu Liang also embarked on the road of raising pigs.
Liu Liang, who looked solemn, was anxious about the pig price in front of him, and in those few days, the price of live pigs once again fell below the mark of 7 yuan per kilogram.
"As usual, every time the year closes, the price of live pigs will have a process of rising, because the New Year is the peak consumption season for pigs." Liu Liang said that when the New Year approached this year, pig prices did not rise but fell, almost close to the low level of the whole year of 2021.
According to the data of China Pig Network, on January 27, the price of three yuan pigs outside the country was 14.15 yuan / kg, and the price of local pigs was 13.7 yuan / kg. On the whole, the price of live pigs is about 7 yuan per catty.
Looking back at the price of live pigs in 2021, the year before the Spring Festival was the highest, and the price per kilogram reached about 18 yuan, but after the Spring Festival, the price of live pigs began to fall, and it was a state of rapid sharp decline.
Liu Liang told the "Daily Economic News" reporter that the price of live pigs began in March 2021 and fell to more than 6 yuan per catty in June. "This exceeded many people's expectations, thinking that it would not start to fall until the second half of 2021, but they did not expect that they would start to fall sharply after the year."
Liu Liang said that he could not understand the trend of pig prices now, but he believed that as soon as March and April this year, pig prices would rise.
When talking about the current pig profit and loss situation, Liu Liang said that his current pig raising cost is about 8.5 yuan per kilogram, "at the current price, a pig of about 250 kilograms will lose about four or five hundred yuan." ”
Liu Liang's pig breeding model is self-breeding, and has been controlling the amount of pigs by reducing the number of sows, at most there were more than 200 sows, and now it has been reduced to more than 160 heads, and the annual pig output is about 3,000 heads.
Compared with large pig enterprises, the cost of small farmer Liu Liang still has certain advantages. The reporter learned from the recent exchange with zhengbang technology related people that the pig cost of zhengbang technology is about 9 yuan.
Pig prices and costs are inverted, not only farmers fall into losses, but also large pig companies generally suffer losses.
Wen's shares, which were once a domestic pig breeder and now have a market value exceeded by Makihara shares, have released performance forecasts a few days ago that the expected loss in 2021 is between 13 billion and 13.8 billion yuan, which is also the first fiscal year since the listing of Wen's shares.
Another large pig company, Zhengbang Technology, expects losses in the 2021 range of between 18.2 billion yuan and 19.7 billion yuan, which not only sets a historical record, but also exceeds the sum of its profits in the previous decade.
However, the reporter also noted that the domestic pig leader Muyuan shares handed over a performance forecast that amazed its peers in the industry. In 2021, the company expects to achieve a profit of 7.5 billion to 8 billion yuan, and it is also the only pig company that is expected to be profitable.
The market is up and down
Piglets went from being hard to find to being unattended
"The big rise and fall in the price of live pigs is caused by changes in the supply side, less supply, the price is higher, the supply is more, the price will naturally fall." Jiang Ke, who once served as an executive in a large domestic pig company, told the Daily Economic News reporter that since the outbreak of African swine fever in 2019, a pig in the market is difficult to find, and the price has naturally gone up.
Throughout 2020, the price of live pigs will remain above 15 yuan per catty, and the highest price will even reach 20 yuan. A pig can earn an average of one or two thousand yuan, and it is not uncommon for even a pig to earn 3,000 yuan. For any industry, this can be called a huge profit.
When the price of pigs rose, all walks of life entered the pig industry. "As long as there is enough profit, there are people who are willing to take huge risks for it." Jiang Ke said that there is no too high technical threshold for raising pigs, and when the pig price market rises, there are more small farmers, and large pig companies have also begun to expand.
Wen Fan, who is also a fellow villager in Gao'an City with Liu Liang, entered the pig industry at the end of 2019, but the pig breeding land he chose was Fengxin, a neighboring county of Gao'an, which also belonged to the jurisdiction of Yichun City, Jiangxi Province.
Wen Fan told reporters that he invested 8 million yuan, in his team, some people originally had their own pig farms, some people engaged in pig breeding work, funds plus technology, a shot, built the largest breeding sow production base in Fengxin County.
Since the end of 2019, pig prices have risen all the way, and piglet prices in the market have also reached new highs. The price of a piglet weighing about 15 kilograms has exceeded 2000 yuan from a maximum of 1200 yuan.
Wen Fan saw the huge profit of piglets, directly cut into the production and marketing of piglets track, purchased 1200 breeding sows, and produced more than 20,000 piglets per year.
Entering 2020, Wenfan began to have piglet sales, at that time the sales of piglets were very good, not worried about selling at all, generally Hunan, Guangdong and Jiangxi local pig farmers took the initiative to find over, a 15-pound piglet price can be sold to more than 1500 yuan, a higher can even sell to 1800 yuan.
Until the end of 2020, the piglets in winter need to be raised to 30 catties, and the price is slightly lower. When piglets are sold as fat pigs, it is generally in June and July of the following year, which is the off-season for pig sales.
"Most importantly, piglets are hard to find in the market, and many people are begging to buy them." Wen Fan said that at that time, it was a seller's market.
Pig prices began to dive after the Spring Festival in 2021, opening a downward pattern, corresponding to which the price of piglets also fell all the way.
"800 yuan, 500 yuan, and finally fell to 100 yuan a head." Wen Fan said that later, there was no pig farm to buy piglets, and no one wanted to give them to others. He began to eliminate fertile sows in June 2021, and since then, the piglets he has given birth to have been left to raise themselves, and there are still two or three thousand today.
Wen Fan said that in the first half of 2021, they were still profitable, but after the second half of the year, they began to lose money. "The money earned by strength is finally lost back by 'strength'."
Pig cycle reincarnation
It's so hard to grasp the timing and step on the right pace
Although Liu Liang has nearly two decades of pig raising experience, like Wen Fan, Liu Liang's recent entry into the pig industry is also the end of 2019.
"Before that, after the local management of the pig industry due to environmental problems and African swine fever, there were no pigs in the market for small pig farmers." Liu Liang said that because of African swine fever, local pig farmers have almost suffered "group annihilation", as long as they can keep pigs, they have made money, but very few.
Liu Liang said that people who enter this field after African swine fever can not only see the industry profiteering, but also bear huge risks, because once the "non-plague" epidemic occurs and is not controlled in time, that is, the entire pig farm will be finished, and there is no chance to turn over.
"If small farmers do not step on the timing and rhythm, they are very likely to lose everything." Liu Liang said.
Wang Xiaohui, who is separated from Liu Liang by a city, is a person who has not stepped on the timing and rhythm.
Wang Xiaohui opened a feed store before, in 2020, when the pig price market is very good, in fact, the number of pigs on the market was small at that time, and the price of feed has been falling.
In the Spring Festival of 2021, when Wang Xiaohui saw that the price of live pigs was still maintained at more than 15 yuan per kilogram, he found a partner with a farm downstream and decided to enter the pig industry.
In March of that year, Wang Xiaohui bought more than 200 piglets, and the price of each piglet was 1500 yuan at that time.
Shortly after Wang Xiaohui's batch of piglets was bought back, the price of live pigs on the market began to be unstable and had a downward trend. Entering April and May, the price of live pigs plummeted.
Not only that, the price of feed on the market has begun to rise again, including corn, soybean meal and other raw materials, and the price has increased considerably.
"Every day I see the price of pigs falling, my heart is colicky." Wang Xiaohui said that when the price of pigs falls and the piglets do not grow enough to be out of the pen, no one will come to buy pigs halfway.
In 2020, when the pig price market is good, some pig companies, including the twin group, will buy pigs and carry out secondary fattening.
By September 2021, Wang Xiaohui's batch of pigs had grown to almost 250 kilograms, and the price of live pigs on the market had fallen to more than 6 yuan per kilogram, and he sold the pigs at a price of more than 1,500 yuan per pig.
"I don't dare to wait, I'm afraid that the more I wait, the more I fall, I just want to hurry up." Wang Xiaohui said that in fact, soon after buying back the piglets, he knew that it was bound to lose money, but he did not know that there would be such a misery, fortunately, there were several people who cooperated, and they also tried the water of the pig industry, and they were still at ease to sell their own feed in the future.
Pig companies have expanded dramatically
Under the cycle, "who can hold the pig's ear"?
In addition to the traditional medium and large pig enterprises, under the temptation of huge profits, small retail investors like Wang Xiaohui have flocked to enter the pig industry, and even upstream and downstream related enterprises have also directly "gone down" in recent years.
On January 23, a reporter from the Daily Economic News came to a pig breeding project under construction in Tiannan Town, Gao'an City, Jiangxi Province. This is the breeding pig farm project of Guilin Liyuan Group in Gao'an, with an investment of 150 million yuan, which can produce 150,000 piglets per year after completion.
Since the occurrence of "non-plague" in 2019, under the strong stimulation of market dividends, pig breeding enterprises have carried out large-scale expansion.
Data show that in the first half of 2020 alone, 25 pig breeding enterprises released information on investment and factory construction, involving an investment amount of up to 165.9 billion yuan. In the second half of 2020, the expansion momentum of large-scale pig enterprises will not decrease: Zhengbang Group will invest 10 billion yuan in Neijiang to build pig breeding and supporting projects; Aonong Bio will invest in the construction of pig industry chain agricultural development projects in Yifeng County, Jiangxi Province, with a total investment of 710 million yuan.
In 2021, Makihara shares will develop rapidly, with employees expanded to 135,000 people, a total of 218 breeding subsidiaries, and 23 slaughtering subsidiaries were established to improve the industrial chain. The number of pigs out of the pen reached 40.263 million heads, exceeding the annual target, an increase of 122.3% year-on-year. At the end of 2021, Makihara shares are expected to build pig breeding capacity of more than 70 million heads, and its production capacity expansion rate is amazing, in just a few years, it will pull down the position of the boss of China's pig industry Wen's shares.
Not only Makihara shares, Zhengbang Technology has also surpassed Wen's shares in the past two years and occupied the second position in China's pig industry. In 2021, the pig output of Zhengbang Technology reached 14.9267 million heads.
In addition, in 2021, the number of pigs produced by Aonong Bio increased by 141.1% year-on-year, and the pig output of Dabeinong increased by 132.8% year-on-year. In just one year, the phenomenon of direct exponential growth of pig production capacity has been a number of cases in the industry.
However, it is precisely because of the rapid expansion of the above-mentioned medium and large pig enterprises that it has brought a huge impact to the pig market and also made most pig companies fall into losses.
"It's a blind expansion, but it has to be done." Jiang Ke said that the decision-makers of these pig companies also know the risks after expansion, but this is the opportunity to seize market share, if you do not seize it, the opportunity will become someone else's.
In the view of many insiders, the pig industry will become more and more concentrated in the future, and these large pig companies have a stronger ability to resist risks. As long as we can survive the losses brought about by the expansion of the past two years, there will be more opportunities in the future.
Jiang Ke believes that after this round of fierce competition in the pig industry, in fact, the space is already very small. In the future, the focus of these breeding enterprises should be placed on the downstream deep processing and food fields, and the space here will be more extensive.
(At the request of the interviewees, the farmers in the article are pseudonyms)
Reporter's Note 丨 Respect the Law of Development Do not blindly expand
African swine fever at the end of 2019 caused a shortage of domestic pigs, and the price of live pigs was also bullish all the way, reaching a historical high, a 300-kilogram pig, the profit can reach up to 3,000 yuan.
For any industry, this can be called a huge profit, in the face of huge interests, some large pig enterprises began to expand wildly, the domestic head pig enterprises have expanded the scale of production, all want to take this opportunity to occupy the commanding heights of pig breeding. By 2021, the final output volume will increase by as little as 50% and more will double.
Some retail farmers who raise pigs have begun a new round of investment in the face of huge profits. Some start raising again, and some of the pigs themselves begin to increase production.
When a large number of new production is put into the market in 2021, the price of live pigs at this time begins to fall off a cliff, and the entire pig industry is miserable, and eventually the whole industry is in a general loss.
In the interview, retail investors with many years of breeding experience told reporters that in fact, they all know the pig cycle and know that there are huge risks behind them. "There is an element of gambling in it, betting that the price of live pigs has not fallen so quickly."
On the other hand, those large pig companies are also expanding wildly, but the capital cost brought about by the construction of a large number of pig houses and the decline in sales caused by the rapid decline in pig prices have caused these pig companies to fall into losses, can they survive this difficulty? When will we be able to get out of this cycle?
The development of any industry and enterprise cannot be achieved overnight, respect the development law of the industry, expand in an orderly manner, prevent and bear risks, and go further.
Reporter: Yu Yaofeng
Editor: Chen Junjie
Vision: Zou Li
Typesetting: Chen Junjie Ma Yuan
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