As of mid-April, the national hog prices have continued to rise slightly for 3 weeks, stopping a 16-week sustained downward trend; and southern hog prices are moving from 6 yuan period into the 8 yuan period.
Analysis believes that the probability of late March to become the annual low point of the spot price of hogs, but this year the hog price upward space is still limited.
When the new round of hog cycle will be opened, the market needs to be further verified.
Four major factors contribute to the surge in pig prices
Since April, pork prices have produced a positional rebound.
According to the Ministry of Agriculture and Rural Affairs, as of mid-April, the national hog price has continued to rise slightly for 3 weeks, stopping the trend of 16 weeks of continuous decline, the farm household losses have eased.
The data show that the current round of pork price increases is a nationwide general increase.
As of April 21, Guangdong, Hunan, Sichuan, Liaoning and other places of hog prices than the end of March have more than 15% increase, in which the largest increase in Guangdong, reaching 21.07%.
Northeastern region, pig prices directly from 5 words, rose into the period of 7 yuan; and many markets in the south, pig prices are from the period of 6 yuan, the impact of 8 yuan / catty.
This round of rise exceeded the industry's expectations.
A listed pig enterprise related undertakings performance: According to our research, today's enterprises are facing greater financial pressures, the actual amount of group enterprises in various regions have reduced the amount of fodder, the supply of recent reductions led to this round of price increases.
Again, the southern region raised prices significantly, the national price rise has been driven.
Dissecting the reasons for the recent rise in pig prices, there are four key influencing factors:
One, pork production capacity has been further optimized.
Based on the National Bureau of Statistics data show that as of the end of the first quarter of 2022, the national breeding sows stock is 41.85 million, down 8.3%, is 102.1% of the normal retention of 41 million, the basis back to the fair capacity range.
Second, the storage work to boost market beliefs, pushing up emotions.
Entering 2022, the country has ended up with four batches of central savings meat purchase work, the cumulative storage of frozen pork amounted to 158,000 tons.
The fifth batch of storage work has been launched on April 22, intending to store 40,000 tons.
The National Development and Reform Commission previously showed that, if the subsequent hog prices continue to run low, the state will continue to carry out the storage work, and lead the localities to seize the storage, and promote the price of hogs as soon as possible to return to the fair range.
Three, by the epidemic control factors, on the one hand, the local area of frozen meat requirements surge, on the other hand, because of poor logistics, market control and other reasons, resulting in a reduction in the amount of hogs, some slaughtering companies have to raise the price of purchasing hogs.
Four, the arrival of the holidays to stimulate the pork market spending.
Following the May Day, Dragon Boat Festival and other festivals near, each region in order to promote the crowd spending, enhance the economy, will be a large number of issued spending coupons, spending may increase, support pig prices further rebound.
It is worth noting that the current round of pork price increases and the October-November rise in the past year there are similarities.
According to the data at the time, as of November 25, 2021, the national average price of pork was 24.50 yuan / kg, and continued for six weeks to adhere to the upward trend, the cumulative increase reached 36%.
The important factors affecting it include the promotion of seasonal requirements (pickled sausages in the south and enemas in the north), multiple rounds of storage at the central and local levels, and losses leading to farmers dropping their hog slaughtering weights.
And then the broad concept is: this round of pig prices are still lack of a substantial increase in the basic, the full reversal still need to wait, estimated that the recent vibration stabilization market.
Capacity demobilization is not complete, the head of the hog enterprises to expand against the trend
From the first quarter sales, the head of the hog enterprises did not slow down the hog slaughter beat.
Data shows that 7 out of 10 large hog enterprises adhere to the sales increase trend.
In this case, Aonong Bio and Wen's shares increased by more than 90% year-on-year, and their sales in the first quarter reached 1,046,800 and 4,023,500 heads respectively.
The champion of the first quarter sales is Makuhari, the cumulative sales in the first three months amounted to 13.817 million head, a year-on-year growth rate of 79%, is the first pig enterprise to break through ten million head this year.
In this case, the March single-month slaughter reached 5,986,000 head, the slaughter hit a record high.
10 large listed pig enterprises Q1 sales situation titanium media tabulation
Titanium media app invented, 10 large listed pig enterprises, only 3 in the first quarter to reduce production, respectively Zhengbang science and technology, Tianbang shares and Tangren Shen.
In this case, Tangren Shen sales of 383,400 head in the first quarter, a year-on-year decline of 17.19% is, is the largest decline in the top 10 pig enterprises.
By the impact of the downward trend of hog prices, the vast majority of hog enterprises sales revenue also produced a sharp decline.
Except for Aonong Bio, the rest of the top 9 hog enterprises have revealed the first quarter sales revenue data.
In this case, Makogen's quarterly sales increased by 9% year-on-year, and the remaining 8 pig enterprises have a differentiated level of decline in income.
Zhengbang Technology had the biggest drop in sales, reaching 65%, far exceeding its 6% sales decline.
It is worth noting that after experiencing the extremely rapid expansion of production capacity in the past year, some pig enterprises are under pressure to sell their assets to maintain operations.
Taking Zhengbang Science and Technology as an example, as of the end of the third quarter of 2021, Zhengbang Science and Technology's gearing ratio was 75.23%, up 16.67% from the end of 2020; the scope of its recent loans amounted to 13.99 billion yuan, an increase of 41.76% year-on-year; non-current liabilities due within one year amounted to 1.597 billion yuan, an increase of 39.13% year-on-year.
In March 2022, Zhengbang Science and Technology announced that it intends to sell all or part of the equity interests of eight holding subsidiaries held directly or indirectly, and the total amount of assets sold and purchased in this cooperation is about 2 billion to 2.5 billion yuan.
Zhengbang Science and Technology estimates that from this sale will be 1.1 billion to 1.9 billion yuan of investment income, accounting for 19.15% to 33.08% of the audited net profit of the most recent accounting year.
And in the face of overcapacity and a downward cycle, there are few pig enterprises that have chosen to expand against the trend.
Based on a restricted shareholding encouragement plan disclosed by Makogen on March 24, the company's performance in 2022 to 2023 to examine the purpose of: 2021 hog sales volume as the base, 2022 hog sales volume increase rate of not less than 25%; 2021 hog sales volume as the base, 2023 hog sales volume increase rate of not less than 40%.
Additionally, Wen's shares had disclosed in a research campaign, the 2022 slaughtering purpose in 18-20 million heads, an increase of 30%-50% over 2021; Tianbang shares in the investor question also showed that the 2022 preliminary slaughtering is estimated to be 6 million, an increase of 1.8 million heads over the 2021 slaughtering volume.
Long-standing tracking pork farming industry analysts told Titanium Media App, in the cycle of down time, large listed pig enterprises, whether it is the ability to finance, the ability to resist risk, are better than the micro and medium-sized pig enterprises.
Today, it seems that the head of the pig enterprise did not obviously slow down the beat of capacity expansion, their aggressive expansion not only further squeezed the survival space of the farming retailer, but also does not have the capital advantage of the miniature pig enterprise facing the survival of the big test.
Be careful with the cycle of quotations
Behind the recent rebound in pork prices is the intensification of losses in the pig industry.
An analyst pointed out that since June 2021, the domestic hog farming industry has accumulated losses for nearly eight months.
Already the domestic media statistics, 5 big head hog enterprises in the first quarter of this year, the total loss will reach 12 billion yuan.
This is reflected doubly intuitively in the financial status of the head hog enterprises in 2021.
Except for the Makin stock performance advance, head pig enterprises 2021 are announced loss (including pre-loss).
According to the published annual report of Wen's shares, its net profit loss in 2021 reached 13.4 billion yuan, a year-on-year decline of 280.51%.
Current hog farming has not yet turned a profit, with a loss of 327 yuan per hog farrowed in March, 153 yuan more than in February.
Yang Zhenhai, director of the Bureau of Animal Husbandry and Veterinary Medicine of the Ministry of Agriculture and Rural Affairs, showed that, according to the expert team's guesses, following the high number of newborn piglets back to the high level of feed costs, such as the accumulation of favorable factors, the third quarter of the hog farming is expected to achieve a turnaround, but uncertainty still exists.
In fact, the domestic every 3-4 years will experience a round of hog cycle, the essence of the supply and demand mismatch, the ultimate impact of price fluctuations.
The current round of pig cycle has been on the upswing since June 2018, and the highest single-week average price soared to 40.9 yuan/kg in November 2019, an increase of 262%, and then vibrated at a high level for 13 months, and then began a sharp downward trend since January 2021, and fell 74% to October 2021, with the lowest single-week average price of 10.78 yuan/kg.
Today, pork prices have been at a low level for several months, the industry has speculated that the downward space of pig prices is limited, the second quarter of this year or the starting point of a new round of pig cycle.
Also analysts pointed out that to be cautious about the wave of pig prices pork prices rebound.
The deputy director of the Ministry of Agriculture and Rural Affairs Bureau of Animal Husbandry and Veterinary Medicine Xin Guochang showed that with the May Day, Dragon Boat Festival and other festivals approaching, spending may increase to support the further rebound in pig prices.
From the production side, because around May is the peak of production, then the increase in production will also slowly slow down, it is estimated that by the third quarter may be based on the realization of supply and demand balance.
Everbright futures seminar hog industry researchers Kong Hailan performance, from the base situation, the supply pressure of the hog market has not been effectively alleviated.
The rise in hog prices does not have a trend upward momentum.
Statistics show that since June of last year reached 45.46 million head, the breeding sows stock began a continuous decline.
Currently, the stock of breeding sows is 41.85 million head, although it has returned to the fair capacity range, still slightly higher than the normal retention.
It is important to understand that the inventory of breeding sows represents hog production capacity.
Whether the subsequent hog production capacity can further decline remains to be seen.
Late March is likely to become the annual low point of the spot price of hogs.
But the recent hog prices continued upward space is limited.
Everbright futures hog analyst Lv Pin showed that the game between the breeding side and the slaughtering side of the resolution of the recent supply of hogs, and in the current spending off-season if the phenomenon of high prices restrained spending, then the recent hog price upward space will be very limited.
Thus, to determine whether the current round of hog cycle is over, the price of hogs can continue to strengthen, but also need to be further verified.