A piglet is only 100 yuan, and it is also used to roast suckling pigs, and the pig industry is really so miserable?

Since the second quarter of this year, the domestic pork supply and demand situation has entered a state of easing supply, pig and pork prices continue to fall, near the end of the year, will the pork market usher in a rebound?

Zhu Zengyong, a researcher at the Beijing Institute of Animal Husbandry and Veterinary Medicine of the Chinese Academy of Agricultural Sciences, told the first financial reporter that it was affected by the rapid decline in pig prices to a low level in June and the industry entering a comprehensive loss. Pork production increased significantly in the first three quarters, and pork production will still increase inertia in the fourth quarter. In addition, because the stock of fertile sows still maintains a high level, this indicates that the supply of commercial pigs in the next 10 months will still maintain a significant increase trend, and the supply of pork is still relatively abundant. Although New Year's Day and Spring Festival will drive seasonal pig prices, the downturn in pig prices may continue into the first half of 2022.

The price of pigs in oversupply fell

From the fourth quarter of 2019 to the first quarter of 2021, pig and pork prices remained at a high price level, until February 2021, when they began to fall, and the decline rate accelerated in the second quarter, and by the end of June and the beginning of October, pig prices had been low since the second half of 2019.

In 2021, the price of live pigs fell from 35.80 yuan / kg in January to 13.46 yuan / kg in September, and some areas even fell below 10 yuan / kg at the end of September and the beginning of October.

The rapid decline in pig prices has made the enthusiasm of some farmers to supplement piglets significantly in the middle and late third quarters, and the average monthly price of piglets has dropped from 89.19 yuan / kg in January to 30.47 yuan / kg in September. In September, the piglet market in some areas appeared to be sold at a low price, abandoned and other phenomena, and some piglets were even used to roast suckling pigs, and the price of piglets was only 50 yuan-100 yuan per piglet.

In this context, in June, self-breeding began to lose money, representing that the entire pig breeding industry entered a comprehensive loss stage. In September, the loss of self-breeding 120 kilograms of fat pigs reached about 600 yuan per head, and the loss rate and magnitude exceeded that of previous cycles. Since the middle and late period of the second quarter, some aquaculture enterprises have experienced large losses, broken contracts, and loan restrictions and loan draws.

The significant increase in pork production is the main reason for the decline in hog prices. According to the National Bureau of Statistics, pork production increased by 38% in the first three quarters. The number of pigs out of the pen reached 491.93 million heads, an increase of 35.9% year-on-year. The pig inventory was 437.64 million heads, an increase of 18.2% year-on-year, of which 44.59 million sows could be bred, an increase of 16.7%, down 1.05 million heads from 45.64 million heads in June.

At the same time, the weaker holiday boost led to lower than expected consumption, and high inventories of imported and domestic frozen meat increased the decline. Affected by the obstruction of the circulation of frozen products from the fourth quarter of 2020 to February 2021, a large number of frozen products began to leave the warehouse in March to impact the fresh product market. From January to September 2021, pork imports were 3.14 million tons, down only 4.3% year-on-year, although monthly pork imports began to decline month-on-month from April, but did not fall below 300,000 tons until August.

At the same time, some slaughtering enterprises in the second quarter took advantage of the low price to freeze. The third quarter is generally the peak period for frozen products to leave the warehouse, but the pig price has not risen seasonally but has been falling, and the frozen product market has collapsed at the end of August, which has aggravated the situation of excessive pork supply in stages.

Zhu Zengyong said that in the third quarter, due to the impact of the new crown epidemic and other factors, the transition between the off-peak season was not obvious, the boosting effect of major festival consumption was not obvious, and the overall pork consumption in the first three quarters showed a weak state.

Is there a hog protection price purchase?

In late June and early October, hog and pork prices bottomed out and rebounded more. At the end of June, pig prices bottomed out after falling to 13.76 yuan / kg; in the first week of October, hog and pork prices began to rebound after falling to lows of 11.54 yuan / kg and 21.05 yuan / kg, respectively.

Regarding the two pig price rebounds, Zhu Zeng said that the common points are that pig prices are oversold, frozen pork storage and storage boost, and short-term consumption support and boost, the difference is that the consumption boost space after the National Day is higher than the end of June, and the proportion of large pigs has decreased significantly. Therefore, the second pig price rebound speed and time are higher than the last time, and the short-term changes in consumption in the later period will affect the rebound time and space.

According to the data released by the National Bureau of Statistics, from the first to third quarters of this year, the pig output increased by 30.6%, 38.6% and 39.4% year-on-year, respectively; pork production in the first to second quarters increased by 31.9%, 40.2% and 43.1% respectively.

Zhu Zengyong said that due to the inertia of pig production capacity, it is expected that the pig output in the fourth quarter will hit the highest level of the whole year, and the annual pork production is expected to be more than 54 million tons.

As for pork imports, he expects that monthly imports in the fourth quarter will remain around 200,000 tons, and pork imports for the whole year may be around 3.6 million tons.

The decline in pig prices has made the pig industry, which still earned "full pots and full pots" at the beginning of the year, now has to face a loss situation. In September this year, the Ministry of Agriculture and Rural Affairs published the "Reply to Recommendation No. 6776 of the Fourth Session of the Thirteenth National People's Congress" mentioned that it is not appropriate to implement pig protection price purchase at this stage.

The reply mentioned that "the price of live pigs has long been liberalized, and the market release has played a fundamental role in promoting the development of the pig industry, and the government should no longer intervene to protect prices." At the same time, the production cost of pigs in various places varies greatly, it is difficult to unify quality standards, and it is difficult to grasp the purchase price and subsidy standards. ”

The construction of pig farms is a long-term investment, and the stability of policy expectations is the precondition for long-term investment. The industry believes that the current pig industry is more concerned about maintaining the stability of long-term support policies such as land use, environmental protection, loans and insurance, and does not engage in "sharp turns" and "flipping cakes" to prevent damage to basic production capacity and affect long-term market stable supply.