National Development and Reform Commission officially announced
September 19, in the National Development and Reform Commission held a press conference in September, the National Development and Reform Commission spokesman Meng Wei said that since this year, the domestic hog prices have experienced a decline and then rise in the process of fluctuations in the recent range of 22-24 yuan per kilogram, at a historically high level.
Meng Wei said, taking into account the current price of hogs has been at a high level, the average profit per head of hog farming is also significantly higher than the historical average, if the price rises further sharply, it may lead to an overly rapid increase in production capacity, the late prices fell sharply, is not conducive to the healthy development of the industry over the long term, therefore, in the next few months, the national hog price control work focuses on preventing the price from rising too quickly.
"Pig cheap hurt farmers, meat expensive hurt people" has been a pair of irreconcilable contradictions, such as 2021 pig prices have fallen into the bottom 6 yuan, resulting in a large number of farmers serious losses, Wen's, Zhengbang two big pig enterprises are tens of billions of dollars in losses! Therefore, how many pig farmers did not expect, "pig prices are too high" this day actually came so fast, now actually reached the point of preventing the rise too fast?
But many people have overlooked, the higher the price of pigs, the more likely to become a greater loss!
High hog prices jeopardize the industry!
For the losses in 2021, everyone is still fresh in their minds; but many people forget that the cause of the losses in 2021 is precisely the super-high hog prices and profits in 2019 and 2020!
According to pig price monitoring, pig prices began to soar in June 2019 and only began to decline at the beginning of 2021, and were at historically high levels throughout 2020!
But no one was alerted to the fact that the high hog prices at this time led to a "super level of rapid increase in breeding sows across the country!" As seen in the chart below, the January 2020 sows inventory actually formed a "straight line up", adding more than 10 million breeding sows in a month! Unprecedented!
In 30 days, more than 10 million breeding sows were added! This data is hard to believe now! But hog prices don't lie, the market doesn't lie! In January 2021, hog prices began to slide rapidly, and everyone realized that the industry's hog production capacity has been exceeded! But it was too late, sows are still a lot, capacity continues to expand, pig prices all the way downhill!
This shows that the state regulation of hog prices, to prevent excessive rise, it is forward-looking in resisting the pig cycle, to protect pig farmers!
Many pig industry elite began to pursue the "average profit", but this is also the reason, but in the process of the ups and downs of the pig cycle, how many farmers are precisely in the "average" was eliminated from the field! Even for a huge farming group like Zbang, they will lose the total profit of the past 15 years in one year in 2021, and the "average profit" will become a negative number!
See the pig price control can promote the healthy development of the industry - in September, the country put a total of about 200,000 tons of pork reserves, the highest level in history! This is not just to ensure that consumers can afford to buy pork, but also to protect the majority of ordinary pig farmers!
And hog farmers don't have to worry about the future market, because consumer spending power is picking up solidly!
Consumption is picking up, pig prices are guaranteed!
There are two main elements in the price of hogs: the supply of hogs on the one hand, and the level of consumption on the other!
According to the National Bureau of Statistics website monitoring shows that in August, the total retail sales of consumer goods 3625.8 billion yuan, an increase of 5.4%.
Including 374.8 billion yuan of food and beverage revenues, up 8.4 percent from a year earlier.
"Catering industry, animal husbandry" is a pair of brotherhood, both glory and loss.
Currently, the catering consumption capacity has increased significantly, and the farming industry is also a major benefit! And more importantly, August is likely to be a key node in the reversal of consumption, meaning that our future market will be all the way to the good!
Because January-August this year, food and beverage revenues of 27482 billion yuan, down 5.0% year-on-year! That is to say, January-July this year, the food and beverage industry is still in a downward trend, but it was not until August that a strong reversal was completed! That's why this is what many people did not expect, the consumption level of the downturn for a long time, finally a reversal!
How bad was the catering before? Catering giant Haidilao lost 267 million in the first half of this year, layoffs amounted to 46,000 people! And that's based on the fact that they closed 276 stores last year under the "efficiency and cost reduction" program! Many farming giants have long-term cooperation with Haidilao, every year through the "hot pot" to consumers to pass a large amount of pork, it can be said that with Haidilao is "lips and teeth"!
All in all, we do not have to worry about the state regulation of pig prices will be a big downturn, on the one hand, the reserve meat only occupy a very small part of the market, on the other hand, the future of the economic situation is better, more optimistic about the relationship between supply and demand!
Industry profits soared, the pig industry can turn to export?
In fact, in the 12 yuan pig price, the current breeding profit is quite considerable!
According to data from the Ministry of Agriculture and Rural Development (MARD):
Net profit per head of free-range hogs in July 2022 amounted to 726 yuan, compared with -519 yuan in July 2021, an increase of up to 1,245 yuan per head!
July 2022 large-scale hog farming net profit per head reached $879, compared to -$527 in July 2021, an increase of up to $1,406/head!
Farming profit increased by 1200-1400 yuan/head a year, which shows that today's pig price is not easy to come by! Therefore, farmers should cherish the moment, moderate fattening, timely slaughter! From the current price of pigs stabilized at 11-12 yuan/catty, it is not difficult to see that blindly pressing the fence to bet on the market will not bring greater gains, but may cause greater costs and losses.
I've always thought that this is the "healthiest" time for the industry in recent years, not only have we controlled a wide range of epidemics, but we've also beaten the hog cycle, made significant profits, and even improved the situation of importing large quantities of pork for a long time in the past.
According to China Customs data, China imported 140,000 tons of pork in August 2022, down 50 percent year-on-year, and its annual cumulative pork imports were 1.07 million tons, down 63.6 percent year-on-year!
This shows that China's hog industry is gradually getting rid of imports, foreign meat "profit advantage" is shrinking! In fact, China as a "hog consumption of the first big country, hog production of the first big country", the development of the pig industry is also rapidly changing, more and more high-tech applications to the hog industry!
The goal of the future big hog enterprises should be able to target overseas and export! The domestic market has become saturated, only to grab the market at home has been a high degree of involution, so that China's meat to the world is more in line with the great renaissance of the development of the general direction!