Pork prices lag behind CPI, and the pig farming industry may enter a trough period next year
Pork prices lag behind the CPI pace, and the pig farming industry may enter a trough period next year
Source: Changjiang Times Author: Chen Hongxia, Wan Fang Time: 2009-11-18 Clicks: 2247 I want to comment Pig Pig Forum
Pork prices, which had long been a driver of CPI increases, only began to stop falling and edge up slightly in the past three weeks. Not only are they failing to keep up with the pace of rising feed costs, they are also "half a beat" behind the CPI. Data show that Wuhan's CPI turned positive first in September.
Industry insiders analyze that with excess live pig inventories, plus hot investment in breeding sows, the pig farming industry may enter a trough period next year. In the coming months, pork prices may still fail to keep pace with the CPI.
Pork price increases cannot keep up with feed
As the weather turns colder, pork retail prices have already risen. According to statistics from the Wuhan Price Bureau, since the beginning of this month, pork retail prices have risen slightly for three weeks. For example, lean meat, which had a retail price of 12.42 yuan per jin in early November, has now risen to 12.79 yuan, while pork ribs and pork leg meat have each risen by about 0.5 yuan per jin. But even as retail prices rise, farmers are not optimistic. "Feed price increases exceed pork price increases," said Zhang Zhichao, chairman of Jiuzhoutong Animal Husbandry Co., Ltd. "In just ten days, corn rose by more than one mao per jin, and soybean meal rose by 300 yuan--400 yuan per ton."
Zhang Zhichao said that the average feed cost per jin of pork rose by 0.3 yuan, while after so many days of weather changes, the purchase price per jin of live pigs rose by only 0.1 yuan. Based on a 200-jin live pig, only 80 yuan can be earned, and this does not even include labor costs and other expenses. "Life for farmers is getting harder and harder." Mr. Cai, a farmer in Hannan, booked 7 train carloads of corn from Northeast China two weeks ago, and only one carload arrived yesterday, so he could only urgently source substitutes from nearby areas. Hu Tao, general manager of Wuhan Galaxy Ecological Agriculture Co., Ltd., introduced that with feed prices rising, monthly costs increased by 100,000 yuan, but a single live pig can earn only about 50 yuan.
According to statistics from the Provincial Animal Husbandry and Veterinary Bureau, in October, the purchase price of corn was 0.93 yuan/jin, up 2.85% year-on-year, and wheat bran was 0.79 yuan/jin, up 0.9% year-on-year.
Large farms are "riding a tiger and finding it hard to get off"
Zhang Zhichao analyzed that the main reason is excess live pig inventories and market supply exceeding demand. Although meat prices have risen somewhat due to weather, in the long term they may still fall. Many farmers have begun to control their farming scale. Hu Tao said that the scale of live pigs now needs to be controlled, and production should be reduced as little as possible. Many farmers also said that under the current meager-profit situation, they do not dare to casually expand their farming scale.
Compared with the caution of farmers, this year's breeding sow market has been unusually hot. A live pig farming company said that many people rushed to buy breeding sows in large quantities in October, planning to bring them to market before the Spring Festival and make a profit. But with excess market inventories, as large numbers of enterprises snap up breeding sows, the market may decline again next year.
Industry insiders analyze that this year multiple new farms were added within Hubei Province, and many investors entered the market while prices were low, bringing about the boom in breeding sow sales. But as the commercial pigs bred from this batch of breeding sows enter the market, the future trend of the pig farming market is not optimistic. Hu Tao said that the company is already prepared and ready to withdraw from the pig farming industry at any time.
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A drop in pig prices will have some impact on feed enterprises. Some people also believe it is an opportunity to enter the pig farming industry.
Pork prices, which had long been a driver of CPI increases, only began to stop falling and edge up slightly in the past three weeks. Not only are they failing to keep up with the pace of rising feed costs, they are also "half a beat" behind the CPI. Data show that Wuhan's CPI turned positive first in September.
Industry insiders analyze that with excess live pig inventories, plus hot investment in breeding sows, the pig farming industry may enter a trough period next year. In the coming months, pork prices may still fail to keep pace with the CPI.
Pork price increases cannot keep up with feed
As the weather turns colder, pork retail prices have already risen. According to statistics from the Wuhan Price Bureau, since the beginning of this month, pork retail prices have risen slightly for three weeks. For example, lean meat, which had a retail price of 12.42 yuan per jin in early November, has now risen to 12.79 yuan, while pork ribs and pork leg meat have each risen by about 0.5 yuan per jin. But even as retail prices rise, farmers are not optimistic. "Feed price increases exceed pork price increases," said Zhang Zhichao, chairman of Jiuzhoutong Animal Husbandry Co., Ltd. "In just ten days, corn rose by more than one mao per jin, and soybean meal rose by 300 yuan--400 yuan per ton."
Zhang Zhichao said that the average feed cost per jin of pork rose by 0.3 yuan, while after so many days of weather changes, the purchase price per jin of live pigs rose by only 0.1 yuan. Based on a 200-jin live pig, only 80 yuan can be earned, and this does not even include labor costs and other expenses. "Life for farmers is getting harder and harder." Mr. Cai, a farmer in Hannan, booked 7 train carloads of corn from Northeast China two weeks ago, and only one carload arrived yesterday, so he could only urgently source substitutes from nearby areas. Hu Tao, general manager of Wuhan Galaxy Ecological Agriculture Co., Ltd., introduced that with feed prices rising, monthly costs increased by 100,000 yuan, but a single live pig can earn only about 50 yuan.
According to statistics from the Provincial Animal Husbandry and Veterinary Bureau, in October, the purchase price of corn was 0.93 yuan/jin, up 2.85% year-on-year, and wheat bran was 0.79 yuan/jin, up 0.9% year-on-year.
Large farms are "riding a tiger and finding it hard to get off"
Zhang Zhichao analyzed that the main reason is excess live pig inventories and market supply exceeding demand. Although meat prices have risen somewhat due to weather, in the long term they may still fall. Many farmers have begun to control their farming scale. Hu Tao said that the scale of live pigs now needs to be controlled, and production should be reduced as little as possible. Many farmers also said that under the current meager-profit situation, they do not dare to casually expand their farming scale.
Compared with the caution of farmers, this year's breeding sow market has been unusually hot. A live pig farming company said that many people rushed to buy breeding sows in large quantities in October, planning to bring them to market before the Spring Festival and make a profit. But with excess market inventories, as large numbers of enterprises snap up breeding sows, the market may decline again next year.
Industry insiders analyze that this year multiple new farms were added within Hubei Province, and many investors entered the market while prices were low, bringing about the boom in breeding sow sales. But as the commercial pigs bred from this batch of breeding sows enter the market, the future trend of the pig farming market is not optimistic. Hu Tao said that the company is already prepared and ready to withdraw from the pig farming industry at any time.
---------------------
A drop in pig prices will have some impact on feed enterprises. Some people also believe it is an opportunity to enter the pig farming industry.