Our reporter Li Rushi
Intern Zang Xueye
Recently, the National Bureau of Statistics released data showing that in April this year, domestic pork prices rose 1.4% year on year.
Zhang Bin, pig analyst of Shanghai Ganglian Agricultural Products Business Department, told the Securities Daily: "After the Spring Festival, the overall price of pigs showed a volatile upward trend, and the national average price rose month by month. On May 20, the average selling price of domestic three yuan pigs was 15.73 yuan/kg, an increase of 4.79% month on month and 11.27% year on year."
The pig sales data of April 2024 recently disclosed by many pig enterprises shows that the average sales price of commercial pigs has increased year on year, and the company's sales revenue has also increased.
Some listed companies said that they are optimistic about the market in the second quarter and are expected to make profits in April. At the same time, pig enterprises such as Muyuan Shares, Wenshi Shares and Shennong Group have announced that the total cost of pig breeding has been reduced to about 14 yuan/kg, increasing the imagination of cost reduction and efficiency increase in the industry again.
Zhu Zengyong, a researcher at the Beijing Institute of Animal Husbandry and Veterinary Medicine of the Chinese Academy of Agricultural Sciences, told the Securities Daily: "At present, the pig breeding industry is changing from low pig prices to normal fluctuations, from the loss of the whole industry to the normal profit range of the industry."
Profitability improvement of breeding end
Since the Spring Festival, the pig price has been rising continuously, and many listed pig enterprises in the A-share market have recently released good news. According to incomplete statistics, as of May 16, 19 listed pig enterprises had disclosed the pig sales data in April, and the average sales price of commercial pigs of enterprises had achieved year-on-year growth. Many pig enterprises reported good sales revenue.
Specifically, Jingji Zhinong sold 192000 pigs in April, realizing a sales revenue of 299 million yuan, up 48.76% year on year, of which the average sales price of commercial pigs was 15.24 yuan/kg, up 5.69% year on year; In April, Jinxinnong sold 105600 pigs accumulatively, realizing sales revenue of 145 million yuan, a year-on-year increase of 41.55%, of which the average sales price of commercial pigs was 15.39 yuan/kg, a year-on-year increase of 10.32%; In April, Muyuan Stock sold 5.45 million pigs in total, realizing a sales revenue of 9.153 billion yuan, up 0.52% year on year, of which the average sales price of commercial pigs was 14.80 yuan/kg, up 4.23% year on year; Shennong Group sold 171100 pigs accumulatively in April, realizing sales revenue of 301 million yuan, an increase of 80.24% year on year, of which the average sales price of commercial pigs was 14.58 yuan/kg, an increase of 4.82% year on year.
On May 9, when communicating with investors, Jin Xinnong said that the company's net profit in the first quarter of 2024 was a loss, and it was expected that there would be a great probability of profitability in April. It is preliminarily judged that the pig market this year is expected to be better than last year, but there will still be repeated fluctuations on the way. As the company's breeding costs continue to decline, the company is confident that it will turn losses into profits in 2024.
The data disclosed by the Ministry of Agriculture and Rural Affairs on April 19 shows that with the gradual emergence of the effect of pig de productivity, the number of breeding sows on hand, the number of medium and large pigs on hand, and the number of newborn piglets are showing a downward trend. In the second quarter, the supply and demand relationship of the pig market will be further improved, and the pig breeding may turn losses into profits. In terms of the number of reproducible sows on hand, at the end of March, the number of reproducible sows on hand nationwide was 39.92 million, a year-on-year decrease of 7.3%, equivalent to 102.4% of the normal number of 39 million, which is in a green and reasonable area for capacity regulation.
Zhu Zengyong said that if the number of sows that can be bred is reduced to less than 40 million, the production capacity is close to the basic balance between supply and demand. The inflection point does not mean that the pig price must continue to rise before it is called the inflection point. The industry has entered a virtuous circle. For example, breeding has certain profits, pork supply is sufficient, and meat prices are appropriate. This is also an inflection point from the downturn of the industry to the virtuous circle of the industry.
Although it is in the off-season of consumption, pig breeding enterprises have realized the growth of sales revenue through cost control. With the improvement of the supply and demand relationship in the market, the industry is expected to usher in a further recovery.
Wen's shares said that in the past few years, the pattern of the pig industry has changed significantly. In the future, the industry may be in a weak balance between supply and demand and low profitability. The company will pay more attention to cost control, improve internal skills, take ensuring profitability as the primary consideration, and achieve high-quality development of the enterprise.
Cost reduction effect of breeding enterprises appears
At several investor exchanges since May, several listed pig enterprises announced that the full cost of pig breeding in April had entered the "14 yuan/kg stage".
Jingji Zhinong said that the average breeding cost of the company's fattening pigs in April was 13.5 yuan/kg (corresponding to a full cost of about 14.6 yuan/kg). In the past year, the company's aquaculture business has achieved significant cost reduction, and the average aquaculture cost of the benchmark project Maoming Gaozhou Project in April has dropped to 12.44 yuan/kg.
New Hope said that in the field lines under normal operation, with the "non pestilence" influence receding after January and February, the cost of selling pigs in the operation field lines decreased significantly. It was 15.8 yuan/kg in January, about 16 yuan/kg in February, 15.3 yuan/kg in March, and 14.7 yuan/kg in April. It is estimated that in December this year, the cost of fattening pigs on the operation line can be reduced to 14.2 yuan/kg-14.3 yuan/kg.
In addition, in April, the full cost of pig breeding of Muyuan Shares was 14.8 yuan/kg; Among the 16 provincial-level regional breeding units of Wen's shares, 7 have the comprehensive cost of pig breeding less than 14 yuan/kg; The total cost of pig breeding of Shennong Group is 14.2 yuan/kg.
Zhang Bin said: "The decline in pig breeding costs is mainly due to productivity improvement and feed cost reduction. With the continuous capacity optimization of large-scale enterprises, the performance of sows continues to improve, and fewer sows can provide more commercial pigs, which has realized productivity improvement. At the same time, the breeding technology and epidemic prevention level of breeding enterprises are also constantly improving."
The pig enterprises that took the lead in entering the stage of 14 yuan/kg in the full cost of pig breeding also shared the "cost reduction secret script". Muyuan shares said that the company insists on scientific and technological innovation and application, and actively applies research and development achievements to the scene of pig breeding. For example, the company develops synthetic biotechnology and focuses on soybean meal reduction and substitution.
The relevant person in charge of Shennong Group told the Securities Daily: "In the first quarter of 2024, the structure of pigs sold by the company has been improved, the proportion of three yuan commodity pigs sold has continued to increase, and the feed meat ratio has dropped to 2.57. At the same time, the company has constantly improved the standardization of breeding, followed the two-point production, all in and all out, moderate scale and disease purification, and thus improved the health and PSY of pigs (the number of weaned piglets per sow per year). "
