The price of pigs is not only related to the people's "vegetable basket" and "money bag", but also to the survival and development of the main body of breeding. Since the full recovery of pig production capacity in 2021, pork prices have been in a depressed state, and both retail pig farmers and large pig enterprises are experiencing the "coldest " pig cycle.
This round of pig cycle can be said to be "the most difficult and longest" in history, and the downward cycle has obviously "overtimed", which has pressed the industry to raise its head. Losses, liquidations, fire sales, reorganization...... It has become the most realistic portrayal of the current pig enterprises. What are the factors that cause pig prices to be so low? At present, what is the current situation of the pig industry, and where will pig prices go?
Cheap pork
On April 10, in Zhengzhou, spring flowers bloomed. The reporter visited some supermarkets in the eastern district of Zhengzhou, and the pork stalls were slightly deserted and sparse.
The owner of Shuanghui cold fresh meat stall told reporters: "Since the Spring Festival, pork prices have experienced a certain degree of decline, although there has been a slight increase recently, but the overall fluctuation is not significant. He explained that the oversupply of pork in the market for nearly a year has led to a continued low price and unsatisfactory sales.
The reporter noticed that in order to attract customers, the store hung up promotional signs. The price of pork on sale is as low as 9.9 yuan per catty, and the price of thigh bones is only 7 yuan per catty, while the prices of pork belly, leg meat and pork ribs are 15 yuan per catty, 13 yuan per catty and 20 yuan per catty, respectively. Despite this, it was noon and there were still not many customers who came to buy pork.
"In the past two years, pork has been much cheaper, and such a large piece is only a dozen yuan. An aunt who had just finished buying pork sighed.
The reporter then visited Dazhang Supermarket and found that although there are differences in pork prices in different markets, the prices are generally not high.
An employee of Dazhang Supermarket said: "Compared with the previous days, the price of pork has indeed increased, but the increase is not significant. In the supermarket, the price of high-quality front leg meat with skin is 11.8 yuan per catty, the price of pure lean shredded pork and pork belly slices is 14.8 yuan per catty and 13.8 yuan per catty respectively, and the price of home-style meat filling is as low as 9.8 yuan per catty.
According to the monitoring of the Ministry of Agriculture and Rural Affairs, on April 8, the "200 index of wholesale prices of agricultural products" was 122.63, up 0.06 points from the previous day, and as of 14:00 on the 8th, the average price of pork in the national agricultural wholesale market was 20.46 yuan / kg, up 0.1% from the previous day.
Emptying the free-range farmers on the pig farm
"The last five years have been like a dream. My farm has been cleaned four times by African swine fever, and now there is not a single pig in the pen. ”
On April 10, the reporter contacted Wang Rongshan (pseudonym), a free-range farmer in Xincai County, Zhumadian again, and the passage of time has brought unexpected changes, and his pig farm is no longer what it used to be.
Wang Rongshan said that in the past few years, when the price of pigs was good, more than 4,000 pigs could be slaughtered a year, earning one or two million yuan. But now, he sighed, and the losses for two consecutive years were like a nightmare: "Reality is always cruel, and I have to face it." Now I have chosen to grow sweet potatoes, at least this business is less risky. ”
Despite changing careers, he still lives without pigs. Every day, he will unconsciously open the news of the pig herd, pay attention to the fluctuation of pig prices, and occasionally chat with the group friends.
Similar to Wang Rongshan, Li Nianru, a farmer in Luohe, is also suffering from pig farming. He ran a sizable farm, but an African swine fever a few years ago left his farm deserted. Now, he has to wait for the farm to come back to life and start again.
"The pig industry is really scary. Li Nianru sighed. The African swine fever vaccine has not yet been available, and the epidemic prevention measures on farms are not comprehensive, which makes many farmers shy away.
"Although the price of pigs has risen recently, the price of woolly pigs has risen to 8.3 yuan a catty, but the market is not optimistic. Only large fat pigs weighing more than 300 pounds can enjoy this price, in fact, the price of hairy pigs is still hovering around 7.5 yuan, and the cost is not worth it. And the hype in the market is also annoying. ”
According to statistics, in the first quarter of 2023, the national pig price will rise first and then decline, and the overall operation will be in the range of 13~16.5 yuan/kg. Specifically, after the pig price rose from a low of 13.24 yuan/kg to 16.36 yuan/kg, the pressure fell back to 13.48 yuan/kg, and then fluctuated to 15 yuan/kg at the end of the quarter.
"Raising pigs is like gambling. Li Nianru said helplessly, in the past, raising pigs was to earn three months and lose three months, but now it is good, and it has been losing money. Many pig farmers can't hold it anymore, and even lose their capital. "Some people even take out loans to raise pigs, how can they live these days?"
Good markets are always fleeting. He recalled that he had raised pigs for most of his life, and he was fortunate to meet them once, and he earned more than 1 million yuan that year, but those days were like a flash in the pan and he could never go back.
Fallen large pig enterprises
In the current market environment, not only small and medium-sized free-range farmers are suffering, but also large listed pig enterprises are experiencing unprecedented challenges.
"The cyclical fluctuations in the hog market have put a lot of pressure on the entire industry. The person in charge of a large pig enterprise once described it.
The long-term downturn in pork prices has put many large domestic pig enterprises in trouble and reorganized, among which well-known companies such as *ST Zhengbang, Aonong Biotechnology and Tianbang Food have not been spared.
On March 19, Tianbang Food, the fourth largest food in the country, issued an announcement that it decided to apply to the people's court for reorganization and pre-reorganization due to its inability to repay the due debts, which caused widespread concern in the market.
In just two years, three listed pig companies have fallen into difficulties, which is undoubtedly a microcosm of the severity of the current pig cycle.
Bankruptcy reorganization, pig farm closure, subsidiary fire sales, sales of sows and fattening pigs, as well as salary cuts and layoffs, these have become unavoidable realities for many large pig enterprises.
*After experiencing a negative net asset in 2022, ST Zhengbang's stock was put on delisting risk warning. Fortunately, through the bankruptcy reorganization in 2023, its financial position is expected to improve and the risk of delisting will be reduced. But this shift also led to the departure of the company's founder, Lin Yinsun.
From the former "breeding dark horse" to an all-round rout, Aonong Biotech took less than a "pig cycle". In the market surge after African swine fever, Aonong Biotech expanded rapidly, but the ultra-long downward cycle of the pig industry caught it off guard.
Problems such as tight funds, feed shortages, and insufficient payment of employee wages have gradually surfaced, and although Aonong Biotech has denied this, market doubts still exist. The 2023 performance forecast shows that Aonong Biotech will face huge losses, with a net profit of 3 billion to 3.6 billion yuan, and net assets may be -700 million to -1 billion yuan.
Cash flow difficulties are a common problem for almost all pig enterprises. In order to alleviate the financial pressure, Tianbang Food did not hesitate to sell the equity of its subsidiaries three times, but the funds obtained were also a drop in the bucket.
Judging from the announced financial reports of listed pig companies, none of them will be profitable in 2023, and the cumulative loss of non-net profit in the whole industry will exceed 40 billion yuan. Lei Liugong, director of the Department of Market and Information Technology of the Ministry of Agriculture and Rural Affairs, also pointed out at a press conference in January this year that 2023 is the first annual loss year since 2014, and farmers will lose 76 yuan in pig breeding heads throughout the year.
"This series of data and events not only reveals the current grim situation of the pig industry, but also reflects the ruthlessness of the market cycle and the risk of business operations. The person in charge of the above-mentioned large-scale pig enterprises told the reporter of Dahe Finance Cube that for listed pig enterprises, how to survive and develop in adversity is an important topic that needs to be faced in the future.
The "Fruit" of Crazy Expansion
Since African swine fever swept the mainland pig market in 2019, the pig industry has undergone a seismic change.
The ravages of African swine fever have not only caused a serious imbalance in market supply, but also allowed those capital parties with a keen sense of smell to see investment opportunities. Large enterprises and capital, which were originally outside the pig industry, saw this gap and entered the pig industry one after another, trying to get a piece of the blue ocean.
For example, some well-known real estate companies and Internet tycoons, after seeing the huge potential of the pig industry, decisively transformed, invested billions of yuan to build modern pig farms, and introduced foreign advanced breeding technology and management experience. The scale of pig enterprises has also accelerated the pace of expansion, and the head pig enterprises are spending a lot of money to build pig farms, and it is not uncommon to rush to buy piglets and sows.
For a time, the pig industry became the darling of capital, and funds from all walks of life poured in, and pig farms sprung up.
The data analysis provided by Zhongzhou Futures shows that from 2021 to 2023, listed pig companies will continue to expand their production capacity. Among the listed companies that have achieved year-on-year growth in pig production capacity, Wen's shares have performed particularly prominently, with an increase in production capacity of 8.3536 million heads, ranking first on the list. It was followed by New Hope and Muyuan, whose production capacity also achieved significant growth of 3,068,500 and 2,615,000 respectively.
Since 2019, the capital expenditure of large-scale pig enterprises listed on the A-share market has accelerated significantly.
After a two-year plateau of about 29 billion yuan, capital expenditure increased sharply to 48.3 billion yuan in 2019, and climbed to a record high of 143.7 billion yuan in 2020. Although the subsequent capital expenditure in 2021 and 2022 has fallen, it has also reached 97.4 billion yuan and 49.4 billion yuan, and the total capital expenditure in these four years has reached 338.8 billion yuan.
"Such a huge influx of capital has had a huge impact on the original breeding pattern. Traditional, small-scale pig farmers are gradually losing their market competitiveness under the dual pressure of capital and technology. And those large enterprises with financial and technological advantages have gradually become the market dominant. The relevant person in charge of the above-mentioned pig enterprise told reporters.
The data shows that in 2019, the total slaughter volume of the eight major pig enterprises accounted for only 8.27% of the national total, and by 2022, the total slaughter volume of the top ten pig enterprises has accounted for 20.28% of the national total. This remarkable change is a direct result of the large-scale intervention of capital and the intensification of market competition.
It is difficult to reduce production capacity
This round of pig prices has been at a low level for a long time, mainly due to the superposition of multiple factors, among which the difficulty of reducing production capacity is the key to the problem.
According to the National Bureau of Statistics, since July 2021, the number of fertile sows has returned to the level before the swine fever and is at a high level in the same period, so the market has begun to adjust.
Specifically, from June 2021 to April 2022, the national breeding sow herd fell from 45.64 million to 41.77 million, with a cumulative decline of 8.5%. However, this downsizing trend did not last. From May to December 2022, the number of fertile sows increased month-on-month for eight consecutive months. By December 2022, the national breeding sow herd has reached 43.9 million heads, an increase of 5.1% compared with 41.77 million heads in April, which is at a stage high. However, since January 2023, the number of fertile sows has begun to decline again, and by January 2024 it has decreased to 40.67 million heads, a decrease of 6.8%.
Although many institutions expressed optimism about the bottom layout of the pig cycle at the beginning of 2023 and repeatedly mentioned the importance of capacity depletion, a year has passed, and the expected cycle start and capacity depletion have not been realized.
In the current situation of tight cash flow in the industry, the continued low pig price has put great pressure on major pig enterprises. This could deal a fatal blow to companies that are already struggling, pushing the market to complete the expected capacity reduction.
However, some pig enterprises and retail investors still hold a "bet" mentality, which is also one of the important reasons why it is difficult to reduce production capacity.
This is evidenced by the enthusiasm of the piglets to fill the pen. Since 2024, piglet prices have shown an upward trend. At present, the price of 7 kg piglets is about 450 yuan/head, and the price of 15 kg piglets is about 600 yuan/head, and the breeding farm has achieved a small profit or breakeven.
Li Nianru, the above-mentioned pig farmer, told reporters that the current price of 30 catties of piglets is about 745 yuan, an increase of more than 200 yuan from the previous year. "Farmers are betting on the rebound of pig prices in the second half of the year, and they are also worried about piling up for slaughter and delaying the rebound of pig prices. ”
"Although the number of fertile sows in 2023 will decrease slightly, the current pig production capacity is still higher than the normal number of pigs, considering the general increase in production efficiency. Zhang Xiaojun, a researcher at Green Dahua hog futures, said in an interview with a reporter from Dahe Finance Cube that since September last year, pig disease in some areas has led to the acceleration of passive de-production capacity, but the current group farm gilts are sufficient, and Gao Tao corresponds to high supplements, so it is difficult to form a substantial reduction in production capacity, and the long-term inflection point of prices is still difficult to foresee.
When will pig prices rebound
When will the inflection point of the rebound in pig prices appear? Many experts and industry insiders generally believe that it will be in the second half of the year.
Zhang Xiaojun believes that considering the time difference between passive elimination and supplemental columns, or the relative reduction of the corresponding phased supply, or promote the pig price to show a small cycle of rising market. In 2024, the overall pig price may show a low before and then high, and the annual average price may be slightly higher than that in 2023.
"In the first half of the year, the supply pressure is still more obvious, before and after the Spring Festival, pig prices first rose and then declined; in the second half of the year, the supply pressure weakened year-on-year, and the center of gravity of pig prices may rise, but the cost of breeding is expected to move down to limit the upward space. ”
Zhu Zengyong, chief analyst of the whole pork industry chain monitoring and early warning of the Ministry of Agriculture and Rural Affairs, believes that pig prices will continue to improve in the second quarter of this year, and enter a seasonal upward channel in the second half of this year. At present, the bullish sentiment in the farmer market is getting stronger, the enthusiasm for supplementing the column is high, and the supply of commercial pigs in the later period is still relatively abundant. In view of the fact that the fundamentals of supply and demand in the market have not reversed, pig prices have generally risen seasonally in the second half of the year, but under the current conditions, it is unlikely that there will be a sharp rise.
"The inflection point of this pig cycle may come in September. Li Jiawen, a researcher of agricultural products at Zhongzhou Futures, believes that from the current futures market, the price of live pig futures in September was 17.7 yuan / kg, which was significantly higher than that in July. At the same time, combined with the development trend of the spot market, the demand for the National Day holiday may usher in a slight increase, and the enthusiasm of fattening action will also be greatly improved, and all the benefits will be concentrated in the fourth quarter.
For the annual pig price trend, the head pig enterprise Muyuan shares executives recently accepted investor research said that there are many practitioners in the mainland pig breeding industry, pig prices are mainly affected by market supply and demand, the company remains cautiously optimistic about this year's pig prices, and the overall price performance is expected to be better than last year.
"On the supply side, the current breeding sows are still at a high level, but the overall downward trend, the supply of live pigs in 2024 is expected to be lower than last year, on the demand side, with the economy stabilizing and improving, the demand in 2024 is expected to rise to a certain extent. ”
责编:陈玉尧 | 审校:张翼鹏 | 审核:李震 | 监审:万军伟