Financial reporter Wang Hao
Pig prices hit new highs one after another. On July 23, the main pig contract 2409 in the domestic futures market once reached 18,775 yuan/ton, a high in the past two years; According to the data of the Price Testing Center of the National Development and Reform Commission, the national average ex-factory price of live pigs exceeded 19 yuan in the third week of July, reaching a new high of 19.03 yuan/kg in the year.
In the secondary market, a number of listed pig enterprises have turned losses into profits. As of July 25, 19 companies have released their 2024 semi-annual performance forecasts. Judging from the published data, most of the company's pig breeding business has significantly reduced losses year-on-year and achieved profitability in the second quarter. Most companies said that this was mainly affected by the rise in pig prices and the decline in breeding costs.
Pig prices "break 9 and rush 10"
Farmers have been empty for 8 months and "can't help it" to enter the market
The reporter noted that since late May, pig prices have ended their previous four consecutive months of hovering around 15 yuan and have risen restoratively.
According to the results of the data collected by the National Bureau of Statistics in 200 counties surveyed by agricultural product markets, from January to April this year, the prices of live pigs (medium) markets were in the range of 15 yuan, which were 15.31 yuan/kg, 15.16 yuan/kg, 15.50 yuan/kg, and 15.53 yuan/kg. But in May, the deadlock was broken, and this figure became 16.21 yuan/kg. In June, it reached a new level, reaching 17.89 yuan/kg.
At present, although July has not yet ended, the pig price "breaking 9 and 10" is almost a certainty. According to data from China's pig network, on July 25, the price of pigs in the three yuan rose to 19.38 yuan / kg, a year-on-year increase of 34.21%, and in the 31 provinces, municipalities and autonomous regions that can be monitored in the country, the pig price in 23 regions has reached 19 yuan / kg and above, accounting for more than seventy percent. Among them, Hainan, Guangdong, Fujian, Guangxi, Jiangxi five provinces have entered the 20 yuan range, Hainan pig price on the day ranked first, reaching 22.46 yuan / kg.
On July 24, the pork stall of a supermarket in Qingdao, although it was during the evening rush hour, there were not many customers.
On the breeding side, data from the National Bureau of Statistics showed that at the end of the second quarter, the national pig inventory was 415.33 million, a year-on-year decrease of 19.84 million, a decrease of 4.6%, and a month-on-month increase of 6.84 million, an increase of 1.7%. Among them, the number of fertile sows was 40.38 million, a year-on-year decrease of 2.59 million, a decrease of 6.0%, and a month-on-month increase of 460,000 heads, an increase of 1.1%, and the number of fertile sows has increased for two consecutive months.
The stock indicators of pigs and sows that can reproduce have both rebounded, which is reflected in the pig breeding market, which is a continuous boom in supplementation. During the interview, the reporter learned that the current supplement column has become a common choice for farmers. Among them, small and medium-sized farms began to fill the fence one after another, but due to the high price of piglets, the progress of the supplement was slow; For the group's pig farmers and substitute farmers, a large number of pens have been started. He told reporters that since the emptying of the pig farm in November last year, the pig farm has been reconstructed, and now the project is nearing the end, he is also ready to end more than 8 months of empty pen state, on the batch of piglets.
The performance of listed pig enterprises collectively reversed
Net profit turned from negative to positive
Up to now, 19 A-share pig breeding companies have released their 2024 semi-annual performance forecasts, and most of them have significantly reduced losses in their pig breeding businesses year-on-year and achieved profitability in the second quarter.
Wen's share performance forecast
8 companies turned losses into profits, among them, Wen's shares are expected to achieve a net profit of 1.25 billion yuan to 1.5 billion yuan, surpassing the "pig brother" Muyuan shares, followed by Muyuan shares are expected to achieve a net profit of 700 million yuan to 900 million yuan. What is a little surprising is New Hope, which ranks at the bottom of the 19 pig companies that have released performance forecasts with a net profit of -1.2 billion yuan. However, the company said that the single-quarter profit in the second quarter is expected to be about 750 million, and the overall performance in the first half of the year has decreased by more than 50% year-on-year.
Muyuan shares performance forecast
The performance forecast is not the final semi-annual report data, and there may be a certain deviation, but it can also be seen that the industry is reversing. Compared with the same period last year, based on the lower limit of net profit announced by 19 companies, the cumulative amount is 1.392 billion yuan, which is -18.018 billion yuan reported in the middle of last year, and has rebounded to the profit range as a whole.
The rise in pig prices and the decline in breeding costs have become the main reasons for the loss reduction of pig enterprises. Because of this, everyone is speeding up the slaughter. Taking Wen's shares as an example, judging from the data disclosed in its June sales briefing, the sales volume of pigs was 2.3325 million, with a total of 14.3742 million in the first half of the year, an increase of 17.19% and 21.97% year-on-year respectively. At the same time, Wen's shares said that the initial plan is to increase the number of sows that can reproduce by the end of 2024 by 50,000-100,000 on the basis of the stock at the end of 2023. In addition, New Hope said that it can currently breed about 730,000 sows, and the company expects to recover to about 800,000 sows by the end of the year. Zhengbang Technology also said that it would strive to exceed 300,000 sows by the end of the year.
Pig prices "reproduce" the market in 2022?
Industry insiders: the risk of the market outlook needs to be vigilant
"The current market is a bit like a 'replica' in 2022." An industry insider said. According to data from the National Bureau of Statistics, in June 2022, the market price of live pigs (medium) was 16.69 yuan/kg, and it rose to 21.63 yuan/kg the next month. Since then, it has gone all the way up, reaching 27.22 yuan/kg in October. However, this trend only lasted for about half a year before entering the downside again at the end of that year, triggering a continued downturn throughout 2023.
So, is there still room for pig prices to rise in this round? Will there be a repeat of the ups and downs of 2022? Industry insiders believe that the pig market is expected to be bullish on the breeding side, and the pig price shock in the later period is strong. But at the same time, the risks are mounting.
Supply-side pressures will persist. With the accelerated release of the secondary fattening pig source in the early stage, as well as the centralized slaughter at the end of the month, the overall increase in the supply side will still put pressure on pig prices.
The demand side is recovering slowly. At present, the consumer market is still in a weak state, and it is difficult to see obvious signs of recovery in the short term. As the weather gets hotter, the wholesale market is unfavorable, coupled with the increase in the storage cost of cold and fresh white strips, and the reduction of traders' stocking, which will further affect downstream demand. The demand for hogs will remain sluggish for some time to come.
The heat of the secondary fattening supplement column is limited. Although some fattening households still have the intention of supplementing the barn, considering that pigs may have a heat stress response after the temperature is high, and the feed intake and growth rate will decline, the market will be cooler than the previous period. In addition, with the persistence of supply-side pressures and the slow recovery of demand-side, the behavior of filling columns may be limited.
Pig prices may show a weak consolidation trend. Considering the factors at both ends of market supply and demand and the limited heat of the secondary fattening column, the price of live pigs is likely to show a weak consolidation trend in the future. Although pig prices may fluctuate slightly in some areas, the overall trend will still be stable and declining.