On February 11, the Ningxia Hui Autonomous Region Development and Reform Commission issued a warning message saying that the pig grain price comparison in the whole region entered the first-level warning range of excessive decline Release time: 2022-02-11 Source: According to the monitoring of the Autonomous Region Development and Reform Commission, as of January 27, the pig grain ratio in the whole region was 4.96:1, entering the excessive decline first-level warning range (lower than 5:1) set by the "Autonomous Region Pork Market Supply and Price Stability Work Plan".
In the next step, the whole region will start the temporary reserve storage of pork, and it is recommended that farms (households) scientifically arrange production and operation decisions to maintain pig production capacity at a reasonable level.
Previously, the National Development and Reform Commission has released news on February 9 that according to monitoring, in the week from January 24 to 28, the national average pig food ratio was 5.57:1, which was between 5:1 and 6:1 for three consecutive weeks, entering the secondary warning range of excessive decline set by the "Improving the Government Pork Reserve Adjustment Mechanism and Doing a Good Job in ensuring supply and price stability in the pork market". The National Development and Reform Commission and relevant departments shall start the collection and storage of pork reserves as appropriate, and guide local governments to carry out the collection and storage work in accordance with regulations.
"Pig food price comparison" uses the ratio of the weekly pig appearance price monitored by the National Development and Reform Commission and the average wholesale price of second-class corn in the main wholesale market in the country, which can intuitively reflect the comparative relationship between the cost and income of pig breeding, and is an important indicator to measure the current profit and loss of the pig market. The higher the "pig-to-food ratio", indicating that the better the profit of breeding, and vice versa, the worse. But it is not normal for the ratio of the two to be too large or too small.
According to the relevant regulations of the mainland, the ratio of pig prices to corn prices is 6 to 1, and pig breeding is basically at a breakeven point. When the pig food ratio is at 5:1-6:1 for 3 consecutive weeks, or the number of fertile sows has dropped by 5% year-on-year in a single month, or the cumulative decline of the number of breeding sows for 3 consecutive months has been 5%-10%, a secondary warning is issued.
It is worth mentioning that although the price of live pigs has fallen continuously, the recent stock price of listed pig companies has performed well and has not reached a new low with the price of pigs, which market analysts believe may reflect the market's expectations for pig prices to some extent.
From 2002 to the present, the mainland has experienced a total of 5 rounds of pig cycles, each round of pig cycles lasting 3-4 years, and is currently in the fifth round of cycle downward stages. Previously, Zhou Xiaoqiu, chief researcher of Guotai Junan Industrial Service Research Institute, estimated through the total supply, that the price bottom may be in the third quarter of 2022.
He pointed out that the market believes that prices will bottom out in the second quarter, and the core reason is that production capacity peaked in June and July 2021. "But we believe that the peak of the entire market capacity is in September and October 2021, and the capacity decline to the real formation of a reversal of supply and demand for the entire market should be after the third quarter of this year."