Viewpoint update:
Pig breeding: pig price rises in off-season, and 24H2 is highly predictable
As of May 24, the average price of pigs sold nationwide was 16.71 yuan/kg, up 8.30% from 15.43 yuan/kg on May 17. As of May 23, the inventory rate of frozen products was 14.57%, - 5.9 pct on a year-on-year basis, and the inventory rate dropped to the lowest level in recent years. This shows that the frozen meat accumulated in 23 years has been basically cleaned up, the supply shortage at the pig end has begun to affect pig prices, and the lack of pigs without meat has eased. We judge that this week's rising pig price may start a new round of rising pig price cycle. From the perspective of productivity, it still remains at a low level of 39.92 million pigs. The contraction of pig supply will last at least until January 25. This round of rising pig prices is supported by the capacity side. It is expected that the upward sustainability will be significantly better than 22H2. In terms of slaughter volume, from May 18 to May 24, the national slaughter volume was 939700 heads, - 3.22% month on month and - 7.87% year on year. From May 17 to May 23, the average weight of pigs sold nationwide was 125.72kg/head,+0.34% month on month and+3.17% year on year.
White chicken breeding: the price of wool chicken and chicken fry remains at the bottom, waiting for the rise of pig price to drive the price of chicken chain. As of May 24, 2024, the average price of white feather broilers in the main production areas across the country is 7.75 yuan/kg, and the price of commercial chicken fry is 3.22 yuan/feather, which is equal to the month on month ratio on May 17/+2.22%. The breeding profit of white feather broilers and parental breeding chickens is -1.67/+0.52 yuan/feather respectively. By the 20th week of 2024, the number of breeding hens of parents in production on hand was 22.4378 million, still at a relatively high level. At present, the price of wool chicken and commercial chicken fry is low, and it is estimated that the forced molting quantity during the summer incubation period is limited. From the perspective of sales volume of commercial chicken seedlings, we think that the supply rate of 24H2 wool chickens has declined year-on-year.
Planting chain: The national wheat has entered the centralized harvest period in succession. It is expected that the weather will be favorable for the summer harvest. Henan, the main wheat producing area in China, will enter the stage of large-scale mechanical harvest. The province's sown area this year will exceed 85 million mu, and 4 million sets of agricultural machinery are planned to be invested. The wheat in Jiangsu, Anhui and northern Anhui is also harvested in large areas. The Central Meteorological Station predicts that during the summer harvest and summer planting this year, the weather will be good in most of the time, which is conducive to the summer harvest and summer planting.
Feed: the output of industrial feed fell in April on a month on month basis
According to the data of Feed Industry Association, in April 2024, the total industrial feed production in China will be 24.23 million tons, - 1.5% month on month and - 7.9% year on year. In April, the average price of formula feed for feed enterprises was 3.41/3.17/3.60/5.30 (yuan/kg) for fattening pigs/laying hens peak/broilers/carp adults, respectively - 1.2%/- 0.8%/- 1.0%/- 0.7% month on month and - 8.0%/- 8.5%/- 7.6%/- 1.1% year on year. Influenced by the falling prices of raw materials such as corn and soybean meal, and the loss of downstream breeding industry, the price of compound feed fell for seven consecutive months on a month on month basis.
Investment suggestions: Wen's, Tang Renshen, Superstar Farming and Animal Husbandry, Huatong are recommended for pig breeding. Related targets:
New Wufeng, etc. It is suggested to pay attention to Shengnong Development for white chicken breeding. Relevant targets: Yisheng Shares, Hefeng Shares, etc. It is suggested that the seed industry should pay attention to Longping High tech, and the related targets are: Dabeinong, Denghai Seed Industry, etc. Related targets of feed sector: Haida Group, etc.
Risk warning: livestock and poultry capacity reduction is less than expected, industry policy changes exceed expectations, epidemic risk, etc
