The scale rate of the mainland pig industry exceeded 70%!
Official statistics show that in 2023, the large-scale rate of pig breeding in mainland China will reach 68%, an increase of about 3 percentage points over the previous year, and by the end of this year, the scale of pig breeding will reach 70%.
Review of the past ten years: from 2015 to 2023, the slaughter volume of the top three listed pig companies in the industry increased from 18.56 million to 108 million, with a compound annual growth rate of 25%; The slaughter volume of the top 10 listed pig enterprises increased from 20.91 million to 144 million, with a compound annual growth rate of 27%. It has to be said that in the past 10 years, the concentration of the mainland pig industry has increased rapidly, and the market share of the industry has rapidly concentrated in the head listed pig enterprises.
However, compared with foreign countries, the market share of the top ten pig enterprises in United States exceeds 40%. In terms of TOP1, United States Smithfield has a market share of 15% in the United States. Muyuan's domestic market share in 2023 is only about 8.7%, compared with the concentration of leading enterprises in the mainland, there is still a lot of room for improvement.
In other words, although the scale rate of pig farming in mainland China is about to exceed 70%, this is not the end. So in the next 3-5 years, where is the limit of the expansion of the head pig enterprises?
The volume of large-scale pig enterprises will increase more in the future from "full production"!
As we all know, in 2022 and 2023, due to the downturn in the pig industry and the severe epidemic situation, 50%-70% of the pig farmers in different regions will withdraw from the market, and the empty rate of large-scale pig farms will be at a historical high.
The data shows that by the end of the first quarter of 2024, the vacancy rate in Shandong and Henan will reach 40%-50% and 50%-60%, and the national average vacancy rate will be 40%. This is also the main reason for the high cost of pig enterprises in 2023.
Therefore, in the next 3-5 years, the vast majority of pig enterprises will focus more on making full use of existing production capacity and committing to achieving full production capacity to improve production efficiency and reduce costs, and consolidate their position and competitive advantage.
So, where is the limit of the slaughter volume of the head pig enterprise?
Let's take two leading pig companies (Muyuan and Wen's) as an example to make a rough calculation:
1. The basis of the calculation is based on the basic data such as the completed production capacity, design capacity, breeding sow foundation, and PSY results announced by the listed pig enterprises.
2. Muyuan shares: The slaughter volume in 2023 will be 63.82 million heads. According to the company's announcement, Muyuan now has a design capacity of 80 million pigs, and if the production performance improves, the personnel capacity becomes stronger, and the turnover of the pig house accelerates, it can support the annual slaughter of 100 million heads, and the current capacity utilization rate is about 86%, and by the end of the second quarter of 2024, Muyuan can breed 3.31 million sows. If the sow herd base is stable and the production performance is stable, it is estimated that the slaughter volume of Muyuan in 2025 will be 75 million. The market share accounts for more than 10%!
3. Wen's shares: In 2023, the slaughter volume will be 26.26 million heads, the design capacity will be 46 million heads, and the current capacity utilization rate will be about 68%. At the end of April, Wens announced that there were about 1.57 million fertile sows. According to the production plan announced by the company, there will be some more sows, and all other factors are stable, and it is expected that Wen's slaughter of 3,500 will be 10,000 in 2025. 5% market share!
4. In the next 5 years, the head pig enterprises will produce at full capacity to pursue maximum efficiency, and second-tier pig enterprises with capital or low-cost advantages, such as New Wufeng, Superstar Agriculture and Animal Husbandry, and Dongrui Shares, will grow faster, and some institutions have analyzed that the compound annual growth rate of this type of second-tier pig enterprises in the next few years is expected to reach more than 15 - 20%.
However, due to the internal risk control and the external environment (internal: epidemic risk, cycle risk, etc., external: pork as a livelihood product, the policy does not encourage the emergence of oligarchs) the era of large-scale expansion of the industry is no more, like most industries, the industry concentration has increased to a certain extent, and then maintained stability for a long time.
In the era of giants, the breeding end began to really grasp the right to speak
10 years ago, the bargaining power of the pig industry chain was in the upstream (input supply side) and downstream (slaughtering), the author still remembers that at that time to write market articles, the most commonly used is "retail investors have no bargaining power", in the final analysis, the industry's breeding scale is low.
But now, the situation has been fundamentally reversed.
The right to speak of pig enterprises is reflected in the pig price, the simplest is to increase the pig price in the short term by shrinking the volume, or to slaughter the pig price at a high point, resulting in a short-term decline in pig prices, and in general it is a method to control the rhythm of slaughter.
If this kind of discourse power is reflected in the upstream inputs, it is also quite "lethal"!
For example, the industry media Xinzhupai learned through research data that Muyuan's annual purchase volume of animal protection products was about 5.555 billion yuan, Wen's 3.4 billion yuan, New Hope 547 million yuan (veterinary drugs only), and Tianbang, Aonong, Superstar, and Shennong purchased more than 100 million yuan.
In the face of the market cake of hundreds of millions of yuan in the group's pig enterprises, how can the major animal protection companies not be excited? will "take out all the preferential efforts to fight", the most direct is "price reduction"! The data shows that in recent years, the annual purchase price of animal protection products of the group's pig enterprises has been declining by about 15%.
However, in addition to preferential prices, many animal insurance providers can also provide large-scale pig farm customers with billing periods ranging from six months to one year. This means that the scale of the field can first use vaccines, drugs and even feed and other production materials for free, when the market is good, this advantage may not be so obvious, if you catch up with the market downturn, this advantage alone is directly related to the life and death of the enterprise.
For example, a few days ago, Gao Yuanfei, vice president of Guangxi Yangxiang Co., Ltd., wrote in the "Pink Paper Book" in the circle of friends: "Pig enterprises are large to a certain size, and the bargaining power and integration ability of pig breeding inputs will be quite strong, quite strong!" ”
Speaking of which, a question that everyone is very concerned about comes out: the scale of pig giants is getting bigger and bigger, and all aspects are becoming more and more vocal and bargaining power, so will the pig industry form a monopoly problem?
Will the growing number of head pig enterprises cause industry monopoly?
Regarding this question, at the "2024 Animal Husbandry High-quality Development Conference" a few days ago, Xin Guochang, deputy director of the Animal Husbandry and Veterinary Bureau of the Ministry of Agriculture and Rural Affairs, actually gave an answer. Xin Guochang mentioned that the increase in concentration will not necessarily lead to monopoly, and the anti-monopoly law is against monopolistic behavior, not anti-monopoly status.
This point is also very clear, what the market opposes is the monopolistic behavior of hoarding, manipulating the market, and bullying and dominating the market, which has nothing to do with the scale.
At the national level, we will also do a good job in the supervision and supervision of the people's livelihood industry, and we will quickly knock if we find that the signs are wrong!
For example, hog prices in June and July 2022 experienced a period of rapid increases, how fast? As shown below:
On June 6, 2022, the average price of live pigs was 15.74 yuan/kg, and on July 6, it rose to 23.91 yuan/kg, an increase of 8.17 yuan/kg in a month, an increase of more than 50%!
At this time, the National Development and Reform Commission came forward to interview the large-scale pig enterprises, reminding the relevant enterprises to maintain a normal rhythm of slaughter, avoid blindly pressing the bar, and put forward the requirements of not hoarding and raising prices! After the interview, the pig price fell significantly!
Therefore, it is clear that in our country, we do not have to worry about a monopoly in a livelihood industry!
However, in addition to this, we should also look at the "giant enterprises" from a broader perspective, because the market is more competitive in the world.
Objectively speaking, the progress of every industry does not need to be driven and promoted by industry giants, take the pig industry as an example,
We need a low-soy, soy-free diet formula to reduce the huge amount of soybean imports, and we need excellent breeding pig sources to completely get rid of import dependence, which requires the support of technology and technology, but also the support of financial strength, who has such ability? Industry giants! Therefore, to enlarge the pattern, the industry giants are leading the entire industry forward, and everyone in the industry will eventually benefit from the progress of the industry.