1. On the evening of March 7, many pig companies such as Muyuan Stock (002714) and Wen's Stock (300498) announced sales reports for February. The price of commercial pigs is still in decline, both on a month-on-month basis and on a monthly basis. Year-on-year, both showed a downward trend.
Industry insiders believe that the current downturn in pig prices is mainly due to oversupply. As the industry’s production capacity is accelerated, it is optimistically expected to gradually improve within the year, but the specific market trend will depend on the production capacity. Length and depth of time.
Pork prices continue to fall
After sorting out the sales data of various listed pig companies this year, although the sales performance is uneven, the price decline is the main theme.
Most of the month-on-month declines exceeded 10%, and the year-on-year declines exceeded 50%.
The announcement shows that Muyuan Co., Ltd. sold 7.831 million pigs from January to February, with sales revenue of 10.162 billion yuan; the average sales price of commercial pigs was 12.38 yuan/kg, down 16.07% from December 2021, and compared with customers. The average price at the same time was 26.95 yuan/kg, which has been cut in half, a year-on-year decrease of 54%.
In the past year, the pig price of Muyuan Shares has experienced slight fluctuations after a rapid decline. In September last year, it hit a period low of 11.49 yuan/kg, and there was a tailback at the end of the year. However, it has started to rise again this year. Descending slowly.
The pig price trend of Wen's shares is the same as that of Muyuan shares.
In February, 1.069 million pigs were sold, achieving revenue of 1.575 billion yuan. The average sales price of raw pigs was 12.55 yuan/kg, a month-on-month decrease of 10.93%; a year-on-year decrease of 55.87%.
Guanghong Holdings (000529) sold 7,427 pigs in February, with revenue of 6.51 million yuan. The average pig sales price was 14.58 yuan/kg, a month-on-month decrease of 6.6%, and the year-on-year decrease was as high as 82.5%.
From January to February, the company sold a total of 1.55 pigs, with revenue of 12.19 million yuan, and the average sales price was 15.04 yuan/kg, a year-on-year decrease of 77%.
The sales briefing of Zhenghong Technology (000702) shows that the company sold 7,100 pigs in February, with sales revenue of 9.3407 million yuan, a month-on-month decrease of 53.08% and 63.16%, respectively, and a year-on-year decrease of 4.58% and 49.66%, respectively. %.
The decline in revenue is greater than the decline in sales volume. From this, it can be seen that the price of pigs of Zhenghong Technology has also continued to decline, and the company also bluntly stated that the decline in sales revenue was mainly due to the decline in the market sales price of pigs.
When will the turning point come?
Since the Spring Festival in 2022, pig prices have accelerated their decline and triggered warnings. The transaction price of live pigs in many places has fallen below 6 yuan/jin.
According to monitoring by the National Development and Reform Commission, in the week of February 21-25, the national average pig-to-grain price ratio was 4.98:1, falling below 5:1, entering the "Improving the Government Pork Reserve Adjustment Mechanism and Preparing for Pork Market Guarantee" The first-level warning range for excessive decline determined by the "Supply and Price Stabilization Work Plan".
At the same time, the prices of feed raw materials such as soybean meal, corn, and wheat have risen sharply, pushing up the cost of pig breeding.
The current cost of feed per ton has increased by about 400 yuan/ton compared with the fourth quarter of last year, which translates into an increase in pig breeding costs of about 1-1.2 yuan/kg.
According to statistics from relevant agencies, a self-bred pig sold for slaughter in the domestic market suffers a loss of more than 400 yuan/head.
A few days ago, the National Development and Reform Commission, together with relevant departments, launched the central frozen pork reserve purchase and storage work to stabilize the price of pigs. Currently, Beijing, Jiangxi, Hubei, Chongqing, Yunnan, Shaanxi, Ningxia and other places have started the purchase and storage work , other locations will also be launched one after another.
In March, pig prices entered a period of sideways adjustment. According to data monitoring from the pig price system of China Pig Network, from February 28 to March 6, the national foreign three-yuan pig price range was 12.64-12.76 Yuan/kg.
What will be the future trend of pig prices? Sorting out the views of leading pig companies, most believe that the current price downturn is mainly due to excess supply. With the acceleration of production capacity reduction, it is optimistic that it will gradually improve within the year.
Muyuan Shares recently stated in a survey by the receiving institution that the current low pig price is due to both relative excess supply and demand-side reasons. However, the marginal change in supply during the current period is greater than the marginal change in consumption. The change has a greater impact, and the main conflict is the relative excess supply.
In addition, the multiple outbreaks of the new coronavirus epidemic have affected consumer and catering requirements, which has also had a certain impact on pig prices.
In terms of pig price trends, Muyuan shares estimate that pig prices will improve in the second half of the year.
Wen’s shares said that the current industry production capacity has not been completely cleared, and future market trends will mainly depend on the length and depth of production capacity reduction.
Preliminary estimates show that pig prices will remain at a low level in the first half of 2022, and the depletion of industry production capacity will accelerate.
It is optimistically estimated that pig prices may enter the upward channel of the next cycle after the third quarter of 2022; pessimistically estimated that it will still be at the social average break-even line in 2022, and it may take 2023 to enter the next cycle. The upward channel of the cycle.