Introduction: In 2022, in the soaring price of feed raw materials and the sharp fluctuation of pig prices, the pattern of pig industry has quietly changed, and in 2023, in the face of the drastic change of the pig market, how will pig farmers break the situation?
Thanks to the high pig prices in the second half of 2022, from the perspective of net profit, 80% of listed pig enterprises in 2022 turned losses into profits compared with 2021, and compared with last year, they all increased by 1-3 times, while the net profit of several listed pig enterprises that lost money also decreased significantly compared with 2021.
Statistics show that in 2022, 13 listed pig enterprises will sell more than 120 million pigs, and according to the calculation of 700 million pigs slaughtered every year in the country, the market share of 13 pig enterprises has exceeded 17%. Among them, Makihara Shares, Wenshi Shares and New Hope sold a total of 93.72 million pigs.
Listed pig enterprises expand production and increase the layout of the whole industrial chain
In 2023, listed pig enterprises are still expanding their production capacity.
In 2023, the target of listed pig enterprises is still growing, and it is planned to reach 180 million head, an increase of 50%. Makihara, Wen's and New Hope raised their 2023 slaughter targets to 80 million, 26 million and 18.5 million head, respectively.
Gao Yuanfei, vice president of Yangxiang Co., Ltd., previously said on the public platform that there are still many pig breeding companies that have not been counted within 180 million, and either the horror scene of over-slaughtering pigs will occur in 2023, or some people will choose to take the initiative to withdraw.
In addition, while developing pig breeding, many pig breeding enterprises have also increased the layout of front-end feed, seed industry, back-end slaughtering, cold chain sales, etc., Makihara, Aonong, Shennong, etc. layout slaughtering capacity of more than 30 million heads, it is reported that according to the current situation, this year Makihara's slaughterhouse may surpass Shuanghui and become the first enterprise in pig breeding and slaughtering in the country, and the competition in the whole industry chain continues to intensify.
Small and medium-sized pig enterprises seek steady development
While listed pig enterprises have expanded their production capacity, the living space of small and medium-sized pig enterprises is being further compressed, and small scattered and even some small and medium-sized farms are struggling between "leaving quietly" and "staying bravely".
Many small and medium-sized pig enterprises mentioned the huge impact of the rise in feed raw materials and the sharp fluctuation of pig prices on their production and operation, in contrast, large-scale breeding entities in the face of the same external shocks, because of their unique "anti-risk ability + cost control ability + policy tendency" and other attributes make it easier to get out of the industry crisis.
Enping Shengyuan Pig Farm is located in Shengyuan Village Committee, Shahu Town, Enping City, which was built in October 2004 and completed and put into operation in 2005. The company is mainly engaged in pig breeding, self-breeding, self-production and self-marketing. After more than 20 years of development, Shengyuan Fine Breeding Farm has leapfrogged from traditional small-scale breeding to moderate scale. At present, there are more than 1,000 sows in stock, and more than 30,000 pigs are slaughtered every year. The "combination of planting and breeding + moderate scale" breeding model of Shengyuan is quite distinctive.
Zhou Jianming, general manager of Shengyuan Good Breeding Pig Farm, told reporters that aside from the impact of the epidemic, pigs cannot be produced every day, and it is difficult to grasp the rhythm of the market, which is the biggest mountain pressing on small and medium-sized scattered people. At present, listed group companies are still expanding production capacity, more centralized, pig prices fluctuate greatly, and the cycle is short, which is bound to compress the living space of small scattered and even small and medium-sized farms.
Zhou Jianming said frankly that the current pig price fluctuates sharply, and the key to the Holy Garden now is to raise pigs well, grasp the market, change the breed well, and control the cost! "Our production capacity can be more than 3,000 sows to breed and raise themselves, but we still reduce capacity, reduce density, reduce risk, and operate about 2,000 sows!"
Optimistic about the future market, some people seize the opportunity to enter the game
Steady development is the choice of the Holy Garden, and some people choose to enter the game at this time.
Founded in 2008, Meijiabao Animal Husbandry Co., Ltd. has won the honors of Guangdong Provincial Pig Core Breeding Farm, Guangdong Pig Regulation Base, Guangdong Pig Demonstration Base, Guangdong Vegetable Basket Base and Livestock and Poultry Breeding Standardization Demonstration Farm, with a core original breeding farm and four expansion farms, with a total design of 10,000 breeding sows and 80,000 high-quality breeding pigs on the market every year.
Lian Zhiwen, general manager of Meijiabao, said that the normalization of African swine fever and secondary fattening will inevitably lead to large fluctuations in pig prices in the future and will not be very stable. For breeding companies, we can only do our genetic breeding work, try to make better use of pig resources, continuously improve the level of breeding, and constantly reduce costs, so that we will be more competitive.
For the pig market in 2023, Lian Zhiwen is optimistic. "I think there are still quite a chance this year, firstly, from the perspective of the whole society, consumption is gradually recovering, and secondly, the number of stocks, I have not seen many pigs."
Lian Zhiwen introduced that the value of breeding pigs must ultimately be reflected by commercial pigs, and we also hope to taste some of the benefits that breeding pigs bring us. "Meijiabao produces about 200,000 pigs a year, including some unusable breeding pigs or geldings, and in the past, these unusable breeding pigs were sold as pig seedlings, which may be sold for about 100,000 per year, and this year is expected to increase the feeding of fattening pigs."
The industry has entered a new round of reshuffle
There are entrants and there are outs. Guangzhou Zhuge Liang Technology Co., Ltd. Cao Songrong introduced that the disadvantages of small and medium-sized pig farms are becoming more and more obvious, the cost of meat production in traditional small and medium-sized pig farms is significantly higher than that of group companies, and its financing ability is very poor, it is difficult to get through the difficulties when pig prices are low, last year pig prices were low for half a year, and many small and medium-sized pig farms have withdrawn, because they do not have enough funds to survive the difficulty of low pig prices.
For the withdrawal of small and medium-sized scatters, Lian Zhiwen has different observations, he said that the current withdrawal of small and medium-sized scattered is relatively small, and the farmers who have withdrawn from the market are more because the environment, facilities and equipment, epidemic prevention, environmental protection, etc. of pig farms cannot meet the current breeding standards. As far as this year's introduction is concerned, the number of one-time introductions is larger than before, and in the past, pig farms may be mainly supplemented, and this year it is more for expansion and new factories.
It is worth mentioning that recently, Wen said on the public platform that there are still many small and medium-range farmers in the mainland pig industry, and there is an irrational phenomenon of "high price entry, low price exit", resulting in large fluctuations in product prices due to large changes in supply. In the long run, when the market concentration is raised to a certain level, large enterprises maintain a certain market share, and the market pig cycle is expected to be ironed, but in the process of increasing market concentration, the market may be in an irrational state in stages, and pig price fluctuations may be more severe. At the same time, African swine fever has had a profound impact on the industry in recent years, and now the industry's ability to quickly replenish sows has been greatly improved, such as through meat conversion, three-line crossing, binary backcrossing, etc., which may also further iron out pig cycle fluctuations.
According to data from the Ministry of Agriculture and Rural Affairs, the large-scale rate of pig breeding in mainland China reached 57.1% in 2020. In 2019, the General Office of the State Council issued the "Opinions on Stabilizing Pig Production and Promoting Transformation and Upgrading", which clearly stated that the large-scale rate of pig breeding will reach about 58% by 2022 and more than 65% by 2025. In 2023, the pig industry is bound to usher in a new round of reshuffle, let's wait and see!
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Source: Swine Industry Issue 1, 2023