In just four months, the price of pigs in the main producing areas dropped from 9 yuan/kg to 5 yuan/kg at the end of September, a drop of nearly 50%! China's hog market directly fell from "paradise" to "hell". In April and May of 2007, the farmers who fattened piglets were the first to bear the brunt of this round of pig price diving, and suffered the greatest loss, because the price of piglets at the time of fattening was generally above the "sky-high price" of 600 yuan/head, and the cost of slaughtering pigs was around 6.5 yuan/kg, just catching up with the low price in September, with a loss of more than 200 yuan per pig.
What are the reasons for "pig price diving"? Was there a warning before? How will the pig price fluctuate before the Spring Festival? Will the live pig market enter a more serious loss in 2009? With these questions, the reporter recently visited Mr. Feng Yonghui, an expert who specializes in analyzing and studying the domestic pig market and the chief consultant of Sou Pig Network/China Pig Warning Network.
Pig price "diving": reasonable, unexpected
Mr. Feng believes that pig prices have plummeted since May 2008, falling by nearly 50% in just four months. Such a large decline in such a short period of time can be said to be both reasonable and unexpected. It is reasonable to say that at the end of 2007, we released the analysis and early warning report of the pig market in 2008 through our own website and industry media. In the report, our overall judgment on the trend of the live pig market this year is that it will continue to decline. It was unexpected, mainly because the drop in pig prices and the bottom line really exceeded our forecast. Previously, we had predicted that the bottom line of the national average price of live pigs this year would be around 6 yuan/kg, but unexpectedly, the lowest prices in many producing areas actually reached 5 yuan/kg in the middle and late September, and the sales areas also fell below 7 yuan/kg.
Pig price "diving": There are three reasons.
The price of pigs has fallen by nearly 50% in just four months. Analyzing the reasons, Mr. Feng thinks there are three factors.
First, since last year, pigs have been slaughtered one after another. Since May 2007, the price of pigs has soared, the enthusiasm of sows in pig farms (households) has risen sharply, the number of sows has turned to an inflection point, and pig production has begun to enter a recovery period. According to the production cycle of sows, the first litter of piglets was born around May and June 2008. Therefore, this means that the number of live pigs will continue to increase from May, and the increase in the number of sows a year ago began to be reflected in the market supply of live pigs. That is, after May, the supply of the live pig market began to increase.
Secondly, pork demand began to enter the off-season in May. Summer is the peak season for listing all kinds of vegetables, fruits and aquatic products. Adequate supply and low price. If the price of pork is too high, it is difficult to gain an advantage in the competition. Since it is the off-season, it is difficult for natural prices to reach a high level. Therefore, the weakening demand in May is also one of the main factors for the sharp drop in pig prices.
There is another factor that has to be mentioned, which also makes many people in the pig industry indignant, that is, the malicious price reduction of downstream industries. Before 2007 and May 2008, the pig industry in China was in a strong recovery stage. Although the stock of sows has greatly increased, the supply of live pigs is still far from enough. Many slaughter enterprises have to compete for pig sources because of the shortage of pig sources, which has artificially increased the price of pigs. However, due to the high cost, some slaughter enterprises are even on the verge of bankruptcy. After May this year, with the slaughter of the first litter of gilded sows last year, the shortage of pig sources began to improve, and the pig market began to change from seller's market to buyer's market. At this time, in order to restore their "vitality", slaughter enterprises take measures to maintain high meat prices, lower the purchase price of pigs, expand the price difference between them and ensure high profits. This is why the price of pigs has plummeted, while the price of pork has been firm or slow. This also reflects the unbalanced distribution of interests in all links of China's pig industry chain from another aspect, and it is difficult to form the status quo of consistent interests. If the pig market wants to get rid of the vicious circle of skyrocketing and plunging, it will be an important breakthrough for all links in the industrial chain to form the same interests.
Pig prices will fluctuate before the Spring Festival.
Traditionally, the price of pigs often rises before the Spring Festival. Will this happen again this year? According to the analysis and early warning report of the national pig market in the second half of 2008 released by China Pig Early Warning Network some time ago, Feng Yonghui said that the pig price before the Spring Festival should be an oscillating market, and it can't go up or down. It is estimated that the pig price in the main producing areas will fluctuate between 5.2-6.5 yuan/kg.
First, according to the situation of sow replenishment in 2007, the number of live pigs will continue to grow after May this year, and the market supply will become larger and larger; Second, the demand for pork will gradually enter the peak season after June 5438+ 10. The whole winter and spring season is the peak season for pork demand, especially the concentrated consumption before and after the Spring Festival is very large. It is rare in history that the pig price is lower than the cost line before the Spring Festival, even if it sometimes falls before the Spring Festival. For example, before the Spring Festival in late 2005 and early 2006, the live pig market had entered a state of loss in June 2005, but it only lasted less than two months. Before the Spring Festival, the pig price rebounded above the cost line under the demand, which lasted for more than two months, and it did not enter the loss period in the first half of 2006 until after the Spring Festival. Therefore, we can't ignore the effect of demand on pig price, because the demand for pork before the Spring Festival is at least 30% higher than usual, and the supply is hard to be higher than 30% at a time.
Because the supply and demand of live pigs are maintained at a high level before the Spring Festival, and the slaughter weight of live pigs is within the artificially controllable range of 150-300 kg, the supply of live pigs will be changed by artificially controlling the slaughter weight and slaughter date. Similarly, the demand will change due to the holiday effect. Therefore, before the Spring Festival, the supply and demand of live pigs was in a state of stalemate and game, so it was difficult for the pig price to continue to rise or fall.
The trend of pig price next year is difficult to be optimistic.
How to treat the hog market in 2009? Feng Yonghui thinks the situation is not optimistic. The demand for pork is likely to gradually enter the off-season and enter the loss period after the Spring Festival. But the trend of next year still depends on the market situation in the months before the Spring Festival.
Feng Yonghui said that the reason for this judgment is an important basis for the change of sow stock last year and this year. A large number of piglets of the first sow in the first half of 2008 will be listed in the first half of 2009, overlapping with the second sow in May 2007. This means that the supply of live pigs will be much higher than now. Therefore, the supply of live pigs in the first half of 2009 will be very large, and the market is not optimistic.
Although the market is not optimistic, next year's market is not all pessimistic. Feng Yonghui said that the "diving" of pig prices since May this year has its positive side. The pig price plummeted in May, which greatly restrained the crazy growth of sow stocks. In the past, when analyzing and forecasting the pig market in 2008, it was thought that a large number of free-range farmers would leave a huge market vacancy when the pig price fell in the last round. However, it is difficult for large-scale pig farms to fill this vacancy by expanding their scale in a short time, because large-scale pig farms have always been rational and will not expand blindly, and at the same time, the problems of funds, land occupation and environmental protection required for expanding their scale also restrict their expansion. In this way, the supply of live pigs will be in short supply for a long time, and the pig price will remain at a high level for a long time, even thought it would last until the first half of 2009. But unexpectedly, after the long-term high pig price in the second half of 2007 made the financial strength of large-scale pig farms increase rapidly, a large number of funds from real estate and other industries entered the pig industry. At the same time, in order to alleviate the macroeconomic pressure caused by high pig prices, the government has invested a lot of money in the pig industry and implemented a series of policy support, further promoting the scale expansion of large-scale pig farms. The phenomenon of building large-scale pig farms is everywhere in China, and many leading agricultural enterprises have joined in, ambitious to build a pig breeding base with one million or even ten million heads.
At the same time, after the high profits in 2007, small-scale farmers also rapidly expanded their scale. Around April this year, the price of binary sows in most provinces actually rose to more than 2300 yuan/head, which shows how enthusiastic they are! Some farmers see that the price of piglets is high, so they raise sows in Sanyuan pigs as breeding pigs. The "pig fever" is out of control.
This momentum has been maintained until May this year, and the "diving" of pig prices timely curbed this crazy momentum and cooled the "high fever" pig market in time. Until the pig price bottomed out in June 5438+ 10, the enthusiasm of sows still showed no obvious signs of recovery, and the price of piglets also dropped from 800 yuan/head in April to 200 yuan/head. Therefore, if the live pig market is still fluctuating before the Spring Festival, it will be difficult for sows to return to the stage of "fever". Moreover, according to the survey, since July, many large pig farms have eliminated sows with poor production performance, which will obviously reduce the pressure on the pig market in 2009.
So the market in 2009 may not be very pessimistic.
Take preventive measures to avoid risks.
Facing the risky year of 2009, Feng Yonghui thinks that it is best for farms (households) not to replenish spare sows for the time being, and try to reduce the scale before the Spring Festival to avoid the market risks in the first half of 2009. Because from the current situation, although some sows have been eliminated some time ago, most of them are sows with poor production performance. After May 2007, a large number of sows have just started production, and the purchase cost is very high. Unless it is absolutely necessary, it is difficult to eliminate them. Moreover, there is another problem that cannot be ignored. After the financial strength of pig farms (households) was significantly enhanced last year, their ability to resist risks will also be enhanced. Under such circumstances, the space for the decline of sow stocks is very limited. Unless there is a long-term deep loss next year, there will be problems in the capital chain of large-scale pig farms.
This information comes from "Today's Pig Price Network"