Pig Farming May Be More Profitable Than Real Estate? Decoding Ding Lei's Pig Farming Secrets
Decoding Ding Lei's Pig Farming Secrets: Pig Farming May Be More Profitable Than Real Estate
NetEase CEO Ding Lei's "pig farming" plan is gradually turning from a slogan into reality. "In the first few days of November, NetEase's pig breeding base in Zhejiang will be selected." Confirmed Zhou Jiong, deputy general manager of NetEase's Agriculture Division.
Ding Lei revealed in an interview with a Daily Economic News reporter that the actual capital contribution for pig farming still awaits review by the board of directors. What is certain is that "pig farming will definitely happen," and by mid-2010 "Ding's pigs" may enter stores. He still did not forget to joke: "Haste makes good pork impossible!"
Zhejiang is not a traditionally major pig-farming province. But as a county-level city under Wenzhou City, Zhejiang Province, Yueqing City has attracted 110 million yuan in investment since 2008. Wenzhou merchants have diverted some of the attention they used to concentrate on real estate and mining to pig farming. It is said that investment in pig farms accounted for 85% of industrial and commercial capital invested in animal husbandry during the same period.
"Pig farming is more interesting, and there is money to be made." This is how Pan Ada, chairman of Zhejiang Kangshun Animal Husbandry Co., Ltd. (hereinafter referred to as Zhejiang Kangshun), explained his reason for shifting from real estate to breeding. The company's general manager, Pan Zhi, Pan Ada's son, did the pig-farming math for his "prospective peer" Ding Lei: "You get your money back in 3~5 years. That's how pig farms are."
Pig Farming Secrets · Profit
Pig Farming May Be Even More Lucrative Than Real Estate
Ding Lei, who came from the internet industry, first had the idea of raising pigs during a hot pot meal with friends, because "the pig blood didn't look good."
Before him, Zhejiang Kangshun chairman Pan Ada, who came from real estate, also had the innocent dream of "returning to one's roots" through pig farming. He left Chentan Village, Sidu Township, Yueqing at just over ten years old. "I wandered away from home for more than 30 years, doing real estate business in Beijing, Shaanxi, and Tianshui in Gansu, and when I got old I also had the idea of going back to my hometown."
Yueqing City's "Yueqing Merchants Returning Home" policy proposed that Yueqing merchants investing in agriculture back home could enjoy exclusive treatment, which also inclined Pan's heart toward agriculture.
But what really made Pan Ada notice pig farming was a remark: "Invest 100,000 yuan and earn 200,000 yuan a year."
During the Spring Festival in February 2008, Pan Ada and two other shareholder partners returned home for the New Year. A relative who had made money in 2007 came to borrow money from Pan Ada.
"What are you borrowing money for?" Pan asked.
"Pig farming. Last year I invested 100,000 yuan in pig farming and made a net profit of 200,000 yuan. I want to make another big one this year." This answer made Pan Ada couldn't help joking: "Pig farming is so profitable, we might as well raise them too."
Pan Zhi told reporters that previously doing real estate business indeed generally yielded a profit level of 30%~40%, "but a return of 100,000 yuan earning 200,000 yuan a year is really high, too tempting."
"2007 was the best pig-farming market so far. It was very normal to earn 800 yuan per pig, and some earned 1,000 yuan or 1,200 yuan." Fang Miaohua, director of the Yueqing City Animal Husbandry and Veterinary Bureau, said in an interview with a Daily Economic News reporter, "It can be said that those pig farmers all made out happily, and this was also the root of the pig-farming boom in 2008 and 2009."
Pan Ada quickly put the idea into action. The Pan family also reached a formal conclusion on investing in pig farming, requiring that "Pan Ada and his son Pan Zhi hand over their real estate business outside to others to operate, and first invest 10 million yuan in pig farming."
Although the family financial group had strong capital strength, the Pan family was not familiar with pig farming at the time, which also made Fang Miaohua, director of the Yueqing Animal Husbandry and Veterinary Bureau, keep thinking Pan Ada was still joking, until Pan Ada came to the Animal Husbandry and Veterinary Bureau with 10 million yuan in cash to find him, only then did he dare believe it.
According to reports, from 2008 to September this year, Yueqing merchants have spent 110 million yuan to establish or continue construction on 33 live pig breeding projects, "which will raise Yueqing's self-sufficiency rate for live pigs from 25% to 40%, in order to avoid the worry of being too constrained by others when pig prices are unstable." Fang Miaohua said. However, this year Yueqing slaughtered 160,000 live pigs, still a large gap from the consumption volume of 460,000 head, "so pigs must be transferred in from Fujian, Northeast China, and other places."
Pig Farming Secrets · Investment
Three Major Fixed Expenditures Make Up the "Largest Share"
At present, Zhejiang Kangshun has about 5,300 live pigs on hand, but the pigs alone cost 70,000 to 80,000 yuan a day just to eat. Pan Zhi believes that "without enough returns to attract, no matter how rich a person is, they cannot make pig farming work."
Using Pan Ada's pig farm as an example, a Daily Economic News reporter calculated the accounts for Ding Lei's future pig business.
At first the plan was to invest 10 million yuan, but after entering this industry, the Pan family quickly discovered that pig farming was not simple. "The 10 million yuan investment almost doubled, to 18 million yuan, and another 2 million yuan in working capital was needed."
Perhaps this is also one of the reasons why NetEase's pig-farming move has always been "half-hidden behind a pipa." Earlier, Zhou Jiong, deputy general manager of NetEase's Agriculture Division, told a Daily Economic News reporter that when Ding Lei and NetEase decided to enter the pig-farming industry, they conducted research and inspections at home and abroad. "What was originally thought to be not complicated was only discovered after investigation and demonstration to be not simple at all."
A relevant person in charge of Zhejiang Kangshun explained in detail to reporters the various inputs for pig farming. Its 18 million yuan was mainly invested in 3 fixed investments.
The first item was construction. "Ground was broken on June 25, 2008, and it was basically completed on October 1 of the same year. Designed for an annual slaughter scale of 16,000 live pigs, the total construction investment of the pig farm was about 11 million yuan." Pan Ada said. However, at that time steel prices were soaring. If construction had been delayed by two months, the cost of steel and cement might have been reduced by 2 million yuan.
Land is often the biggest headache for entrepreneurs and also a relatively large corporate expense, but pig farms can avoid the restriction of land shortages and difficult approval, and obtain land at low cost. "If it were for industry, Yueqing definitely could not approve land, and even if there were land, the price would be very high. But now we are renting wasteland from Chentan Village, with rent of only about 1,000 yuan per mu per month." Pan Ada said that the company has an allocation of 119 mu in total, and has now used 52 mu.
The second item was purchasing equipment. "Live pig breeding includes gestation stalls, heavy gestation stalls, farrowing rooms, nursery rooms, and fattening pig pens. Each place requires professionally manufactured equipment, and this part costs about 3 million yuan." Pan Zhi said.
The third item was pollution control. The breeding industry often brings environmental pollution problems. For this reason, Zhejiang Kangshun invested 4 million yuan to establish an orchard, which will only begin producing fruit after 3 years.
Fang Miaohua also said that running a pig farm in Yueqing especially requires attention to environmental pollution problems caused by pig manure. "After all, the local planting industry is not developed enough to absorb so much fertilizer."
Zhou Jiong also said bluntly that "the conditions for pig farming in Zhejiang are not good." In addition to unfavorable factors such as high temperature and high humidity in summer, cold and dry winters, and high logistics costs due to being far from major feed-producing areas, Zhejiang's dense population, complex biological environment, low land carrying capacity, dense water network, and great environmental protection pressure are also difficulties the pig-farming industry has to face.
Pig Farming Secrets · Cycle
Under Current Market Conditions, Costs Can Be Recovered in Three to Five Years
"Get your money back in three to five years" has become a common saying in the pig-farming industry.
Another pig farm in Yueqing, Dongshannan Pig Farm, is experiencing such a "miracle." Its person in charge introduced that the company welcomed its first batch of live pigs for slaughter on August 8, 2008. By September this year, it had earned 1 million yuan in one year, while the original investment was only 4 million yuan, so basically the cost can be recovered in 3~5 years.
"You should know that in the year Dongshannan made money, that is, from the second half of last year to now, pig prices have been falling and rising, and overall have been at a low level." Fang Miaohua said.
Zhejiang Kangshun's first batch of commercial pigs was slaughtered on August 25 this year. "So far we have been losing money for 1 year, but judging from the pig herd alone, we are already making money." Pan Zhi's remark aroused the reporter's curiosity.
The secret to making money lies in the feed-to-meat ratio.
Pan Zhi explained that live pig breeding is divided into 3 stages: farrowing room cultivation, nursery room, and fattening pig pen. "In the farrowing room cultivation stage, the feed-to-meat ratio for live pigs is 0.8:1, meaning 0.8 jin of feed produces one jin of meat. At this time the feed has the highest nutritional requirements and the highest price, reaching 3.5 yuan/jin. But even if the pig price is only 5 yuan/jin, each jin of pork can still earn 2.2 yuan."
In the second stage, after live pigs are weaned and enter the nursery room, the feed-to-meat ratio rises to 1.1:1, but the feed price also falls to 1.68 yuan/jin. Calculated this way, each jin of pork can still earn about 3.15 yuan/jin.
In the third stage, live pigs enter the fattening pig pen. At this time the unit price of feed is 1.1 yuan/jin, the feed-to-meat ratio rises to 3:1, and the profit per jin of pork is 1.7 yuan.
"It can be seen that the feed-to-meat ratio has always been profitable. As long as employee wages, water and electricity fees, veterinary health care, and other costs are reduced or spread over more live pigs, a temporary loss will turn into profit." Pan Zhi said.
Pan Zhi told a Daily Economic News reporter that the pig farm's existing veterinarians and other main expense resources are all allocated according to the standard for 16,000 head. "After 1 year, the utilization efficiency of the pig farm's sows can reach optimal. By the end of 2009, the slaughter volume will reach 16,000 head. Even calculated at a pig price of 5 yuan/jin, according to our estimates, the profit per live pig will be around 300 yuan, and the profit for 1 year will reach more than 4.8 million yuan."
"Basically it is still 3~5 years to recover the cost, but the knowledge in it is very important. If raised well, 3 years can recover the cost, and if only slightly better, 5 years is also enough. This is already well known in the industry." Pan Zhi said that calculated this way, "NetEase's 100 million yuan investment can likewise recover its cost in 3~5 years."
Fang Miaohua pointed out that under current market conditions, the average profit of Yueqing's pig-farming industry is 15%~20%. Live pig breeding has a cycle of 3 to 5 years, and its profit curve can stand on the "break-even line" in the first year of the 3 years, then, as time goes on, advance toward "thin profit" and "high profit."
Pan Zhi also believes that although the pig-farming industry is "3 years up, 3 years down," as long as the pigs are raised well, there is no need to fear the market. "There is a saying in the trade: one profitable year in pig farming is enough to cover 3 years of losses. If managed well, you can still have profit when others are losing. This is the same principle as all other businesses."
In addition, Pan Zhi's optimism and confidence in the pig-farming industry also come from "a large reduction in small-scale pig farmers," "never worrying about being unable to sell," and "the state's support for live pig breeding and bottom-line protection through purchase and storage policies."
Pig Farming Secrets · Policy
Investing 100 Million Yuan Can Get 20 Million Yuan in Subsidies
Zhou Jiong, deputy general manager of NetEase's Agriculture Division, said that in the first few days of this month, NetEase's live pig breeding base will be selected, and a new company will also be formed to take full charge of agricultural business mainly focused on pig farming. "According to the preliminary plan, the first batch of live pigs will be slaughtered and listed in 2010, and at full capacity it can reach an annual output scale of 20,000 head."
Ding Lei said on the 1st of this month that consumers could eat pork raised by NetEase as early as mid-2010.
But Fang Miaohua told a Daily Economic News reporter that live pig breeding has a cycle. From a young sow to one that can be bred, it takes 7 months. From pregnancy to farrowing, it takes another 114 days. From piglet birth to commercial pig takes 6 months. "If starting from raising young sows, to commercial pigs being slaughtered, it takes about 17 months in total."
This means that NetEase's pig-farming timetable is already very tight.
Guo Huiyong, an analyst at Oriental Agribusiness, also pointed out that according to the breeding industry cycle, ordinary pigs can generally be slaughtered in four to five months, but Ding Lei's main focus is high-end pigs, which may take about 8 months to be slaughtered. "Moreover, the feed-to-meat ratio will be higher, and the unit cost of feed will also be higher. This is also a challenge for NetEase. It depends on whether its high-end pork can sell at a high price."
Pig farming still comes down to scale and financial strength. Pan Zhi believes that NetEase has a solid financial backing. "As long as it can recruit suitable pig farm managers, there should not be any major problems."
Ding Lei's entry into the pig-farming industry will also bring two sources of income that other industries do not have: First, according to policy, for live pig breeding enterprises investing 100 million yuan, the state will subsidize 20% of the total investment; second, more importantly, live pig breeding enterprises do not need to pay business tax or personal income tax, among others.
Taking Zhejiang Kangshun as an example, an 18 million yuan investment was assessed as a 10 million yuan investment, and it received a 2 million yuan subsidy. The huge operating revenue from selling 16,000 live pigs in 1 year also does not need to be taxed, and the 4.8 million yuan profit distributed to individuals can also avoid personal income tax. "The burden of agricultural tax has also been lifted, which increased our enthusiasm for investing in the live pig breeding industry." Pan Ada said.
"For 300 or more but fewer than 600 sows capable of breeding on hand, with an annual slaughter of 5,000~9,999 commercial pigs, the subsidy is 800,000 yuan; for 1,500 or more sows capable of breeding on hand, with an annual slaughter of more than 30,000 commercial pigs, the subsidy is 3 million yuan." Yueqing City also introduced supporting encouragement measures.
Industry insiders conservatively estimate that once Ding Lei's pig farm confirms an investment scale of about 100 million yuan, it will not only receive about 20 million yuan in subsidies, but local governments will also provide more supporting support and reward policies.
Doing the "Pig Farming Math" for Ding Lei
□Investment
Mainly includes factory construction, equipment, and environmental protection facilities
□Return
According to current market conditions, costs can be recovered in 3~5 years
□Profit
Heard that 100,000 yuan can earn 200,000 yuan a year, very tempting
□Policy
Can receive 20% subsidy, and there are other support policies
--------------------------------------
Without attention to technology, launching blindly will likely mean going up fast and falling fast
--------------------------------------
Are pigs that easy to raise? Are they still waiting for these moneyed people to do it?! Livestock experts would have done it long ago.Be realistic,In China, when raising pigs, equipment cannot blindly believe in so-called technology; it must be practical + input-output ratio. If calculated according to Boss Pan's method, no pig farm is losing money.
--------------------------------------
Are pigs that easy to raise? Are they still waiting for these moneyed people to do it?! Livestock experts would have done it long ago.Be realistic,In China, when raising pigs, equipment cannot blindly believe in so-called technology; it must be practical + input-output ratio. If calculated according to Boss Pan's method, no pig farm is losing money.
--------------------------------------
Is it not that easy to raise
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How well he can actually do it, let's just watch together~
--------------------------------------
Let's look again next year, entertainment haha
--------------------------------------
Industry insiders rarely take his pig farming seriously.
--------------------------------------
Purely entertainment!!!
--------------------------------------
Different trades are like different mountains; his brain must be soaked in water!
yxdl added the following content on 2009-11-20 10:53
Different trades are like different mountains; his brain must be soaked in water!
yxdl added the following content on 2009-11-20 11:24
If he can raise pigs this way without losing money, he should burn high incense. Maybe the tax preferential policies behind it are the key.
Ding Lei revealed in an interview with a Daily Economic News reporter that the actual capital contribution for pig farming still awaits review by the board of directors. What is certain is that "pig farming will definitely happen," and by mid-2010 "Ding's pigs" may enter stores. He still did not forget to joke: "Haste makes good pork impossible!"
Zhejiang is not a traditionally major pig-farming province. But as a county-level city under Wenzhou City, Zhejiang Province, Yueqing City has attracted 110 million yuan in investment since 2008. Wenzhou merchants have diverted some of the attention they used to concentrate on real estate and mining to pig farming. It is said that investment in pig farms accounted for 85% of industrial and commercial capital invested in animal husbandry during the same period.
"Pig farming is more interesting, and there is money to be made." This is how Pan Ada, chairman of Zhejiang Kangshun Animal Husbandry Co., Ltd. (hereinafter referred to as Zhejiang Kangshun), explained his reason for shifting from real estate to breeding. The company's general manager, Pan Zhi, Pan Ada's son, did the pig-farming math for his "prospective peer" Ding Lei: "You get your money back in 3~5 years. That's how pig farms are."
Pig Farming Secrets · Profit
Pig Farming May Be Even More Lucrative Than Real Estate
Ding Lei, who came from the internet industry, first had the idea of raising pigs during a hot pot meal with friends, because "the pig blood didn't look good."
Before him, Zhejiang Kangshun chairman Pan Ada, who came from real estate, also had the innocent dream of "returning to one's roots" through pig farming. He left Chentan Village, Sidu Township, Yueqing at just over ten years old. "I wandered away from home for more than 30 years, doing real estate business in Beijing, Shaanxi, and Tianshui in Gansu, and when I got old I also had the idea of going back to my hometown."
Yueqing City's "Yueqing Merchants Returning Home" policy proposed that Yueqing merchants investing in agriculture back home could enjoy exclusive treatment, which also inclined Pan's heart toward agriculture.
But what really made Pan Ada notice pig farming was a remark: "Invest 100,000 yuan and earn 200,000 yuan a year."
During the Spring Festival in February 2008, Pan Ada and two other shareholder partners returned home for the New Year. A relative who had made money in 2007 came to borrow money from Pan Ada.
"What are you borrowing money for?" Pan asked.
"Pig farming. Last year I invested 100,000 yuan in pig farming and made a net profit of 200,000 yuan. I want to make another big one this year." This answer made Pan Ada couldn't help joking: "Pig farming is so profitable, we might as well raise them too."
Pan Zhi told reporters that previously doing real estate business indeed generally yielded a profit level of 30%~40%, "but a return of 100,000 yuan earning 200,000 yuan a year is really high, too tempting."
"2007 was the best pig-farming market so far. It was very normal to earn 800 yuan per pig, and some earned 1,000 yuan or 1,200 yuan." Fang Miaohua, director of the Yueqing City Animal Husbandry and Veterinary Bureau, said in an interview with a Daily Economic News reporter, "It can be said that those pig farmers all made out happily, and this was also the root of the pig-farming boom in 2008 and 2009."
Pan Ada quickly put the idea into action. The Pan family also reached a formal conclusion on investing in pig farming, requiring that "Pan Ada and his son Pan Zhi hand over their real estate business outside to others to operate, and first invest 10 million yuan in pig farming."
Although the family financial group had strong capital strength, the Pan family was not familiar with pig farming at the time, which also made Fang Miaohua, director of the Yueqing Animal Husbandry and Veterinary Bureau, keep thinking Pan Ada was still joking, until Pan Ada came to the Animal Husbandry and Veterinary Bureau with 10 million yuan in cash to find him, only then did he dare believe it.
According to reports, from 2008 to September this year, Yueqing merchants have spent 110 million yuan to establish or continue construction on 33 live pig breeding projects, "which will raise Yueqing's self-sufficiency rate for live pigs from 25% to 40%, in order to avoid the worry of being too constrained by others when pig prices are unstable." Fang Miaohua said. However, this year Yueqing slaughtered 160,000 live pigs, still a large gap from the consumption volume of 460,000 head, "so pigs must be transferred in from Fujian, Northeast China, and other places."
Pig Farming Secrets · Investment
Three Major Fixed Expenditures Make Up the "Largest Share"
At present, Zhejiang Kangshun has about 5,300 live pigs on hand, but the pigs alone cost 70,000 to 80,000 yuan a day just to eat. Pan Zhi believes that "without enough returns to attract, no matter how rich a person is, they cannot make pig farming work."
Using Pan Ada's pig farm as an example, a Daily Economic News reporter calculated the accounts for Ding Lei's future pig business.
At first the plan was to invest 10 million yuan, but after entering this industry, the Pan family quickly discovered that pig farming was not simple. "The 10 million yuan investment almost doubled, to 18 million yuan, and another 2 million yuan in working capital was needed."
Perhaps this is also one of the reasons why NetEase's pig-farming move has always been "half-hidden behind a pipa." Earlier, Zhou Jiong, deputy general manager of NetEase's Agriculture Division, told a Daily Economic News reporter that when Ding Lei and NetEase decided to enter the pig-farming industry, they conducted research and inspections at home and abroad. "What was originally thought to be not complicated was only discovered after investigation and demonstration to be not simple at all."
A relevant person in charge of Zhejiang Kangshun explained in detail to reporters the various inputs for pig farming. Its 18 million yuan was mainly invested in 3 fixed investments.
The first item was construction. "Ground was broken on June 25, 2008, and it was basically completed on October 1 of the same year. Designed for an annual slaughter scale of 16,000 live pigs, the total construction investment of the pig farm was about 11 million yuan." Pan Ada said. However, at that time steel prices were soaring. If construction had been delayed by two months, the cost of steel and cement might have been reduced by 2 million yuan.
Land is often the biggest headache for entrepreneurs and also a relatively large corporate expense, but pig farms can avoid the restriction of land shortages and difficult approval, and obtain land at low cost. "If it were for industry, Yueqing definitely could not approve land, and even if there were land, the price would be very high. But now we are renting wasteland from Chentan Village, with rent of only about 1,000 yuan per mu per month." Pan Ada said that the company has an allocation of 119 mu in total, and has now used 52 mu.
The second item was purchasing equipment. "Live pig breeding includes gestation stalls, heavy gestation stalls, farrowing rooms, nursery rooms, and fattening pig pens. Each place requires professionally manufactured equipment, and this part costs about 3 million yuan." Pan Zhi said.
The third item was pollution control. The breeding industry often brings environmental pollution problems. For this reason, Zhejiang Kangshun invested 4 million yuan to establish an orchard, which will only begin producing fruit after 3 years.
Fang Miaohua also said that running a pig farm in Yueqing especially requires attention to environmental pollution problems caused by pig manure. "After all, the local planting industry is not developed enough to absorb so much fertilizer."
Zhou Jiong also said bluntly that "the conditions for pig farming in Zhejiang are not good." In addition to unfavorable factors such as high temperature and high humidity in summer, cold and dry winters, and high logistics costs due to being far from major feed-producing areas, Zhejiang's dense population, complex biological environment, low land carrying capacity, dense water network, and great environmental protection pressure are also difficulties the pig-farming industry has to face.
Pig Farming Secrets · Cycle
Under Current Market Conditions, Costs Can Be Recovered in Three to Five Years
"Get your money back in three to five years" has become a common saying in the pig-farming industry.
Another pig farm in Yueqing, Dongshannan Pig Farm, is experiencing such a "miracle." Its person in charge introduced that the company welcomed its first batch of live pigs for slaughter on August 8, 2008. By September this year, it had earned 1 million yuan in one year, while the original investment was only 4 million yuan, so basically the cost can be recovered in 3~5 years.
"You should know that in the year Dongshannan made money, that is, from the second half of last year to now, pig prices have been falling and rising, and overall have been at a low level." Fang Miaohua said.
Zhejiang Kangshun's first batch of commercial pigs was slaughtered on August 25 this year. "So far we have been losing money for 1 year, but judging from the pig herd alone, we are already making money." Pan Zhi's remark aroused the reporter's curiosity.
The secret to making money lies in the feed-to-meat ratio.
Pan Zhi explained that live pig breeding is divided into 3 stages: farrowing room cultivation, nursery room, and fattening pig pen. "In the farrowing room cultivation stage, the feed-to-meat ratio for live pigs is 0.8:1, meaning 0.8 jin of feed produces one jin of meat. At this time the feed has the highest nutritional requirements and the highest price, reaching 3.5 yuan/jin. But even if the pig price is only 5 yuan/jin, each jin of pork can still earn 2.2 yuan."
In the second stage, after live pigs are weaned and enter the nursery room, the feed-to-meat ratio rises to 1.1:1, but the feed price also falls to 1.68 yuan/jin. Calculated this way, each jin of pork can still earn about 3.15 yuan/jin.
In the third stage, live pigs enter the fattening pig pen. At this time the unit price of feed is 1.1 yuan/jin, the feed-to-meat ratio rises to 3:1, and the profit per jin of pork is 1.7 yuan.
"It can be seen that the feed-to-meat ratio has always been profitable. As long as employee wages, water and electricity fees, veterinary health care, and other costs are reduced or spread over more live pigs, a temporary loss will turn into profit." Pan Zhi said.
Pan Zhi told a Daily Economic News reporter that the pig farm's existing veterinarians and other main expense resources are all allocated according to the standard for 16,000 head. "After 1 year, the utilization efficiency of the pig farm's sows can reach optimal. By the end of 2009, the slaughter volume will reach 16,000 head. Even calculated at a pig price of 5 yuan/jin, according to our estimates, the profit per live pig will be around 300 yuan, and the profit for 1 year will reach more than 4.8 million yuan."
"Basically it is still 3~5 years to recover the cost, but the knowledge in it is very important. If raised well, 3 years can recover the cost, and if only slightly better, 5 years is also enough. This is already well known in the industry." Pan Zhi said that calculated this way, "NetEase's 100 million yuan investment can likewise recover its cost in 3~5 years."
Fang Miaohua pointed out that under current market conditions, the average profit of Yueqing's pig-farming industry is 15%~20%. Live pig breeding has a cycle of 3 to 5 years, and its profit curve can stand on the "break-even line" in the first year of the 3 years, then, as time goes on, advance toward "thin profit" and "high profit."
Pan Zhi also believes that although the pig-farming industry is "3 years up, 3 years down," as long as the pigs are raised well, there is no need to fear the market. "There is a saying in the trade: one profitable year in pig farming is enough to cover 3 years of losses. If managed well, you can still have profit when others are losing. This is the same principle as all other businesses."
In addition, Pan Zhi's optimism and confidence in the pig-farming industry also come from "a large reduction in small-scale pig farmers," "never worrying about being unable to sell," and "the state's support for live pig breeding and bottom-line protection through purchase and storage policies."
Pig Farming Secrets · Policy
Investing 100 Million Yuan Can Get 20 Million Yuan in Subsidies
Zhou Jiong, deputy general manager of NetEase's Agriculture Division, said that in the first few days of this month, NetEase's live pig breeding base will be selected, and a new company will also be formed to take full charge of agricultural business mainly focused on pig farming. "According to the preliminary plan, the first batch of live pigs will be slaughtered and listed in 2010, and at full capacity it can reach an annual output scale of 20,000 head."
Ding Lei said on the 1st of this month that consumers could eat pork raised by NetEase as early as mid-2010.
But Fang Miaohua told a Daily Economic News reporter that live pig breeding has a cycle. From a young sow to one that can be bred, it takes 7 months. From pregnancy to farrowing, it takes another 114 days. From piglet birth to commercial pig takes 6 months. "If starting from raising young sows, to commercial pigs being slaughtered, it takes about 17 months in total."
This means that NetEase's pig-farming timetable is already very tight.
Guo Huiyong, an analyst at Oriental Agribusiness, also pointed out that according to the breeding industry cycle, ordinary pigs can generally be slaughtered in four to five months, but Ding Lei's main focus is high-end pigs, which may take about 8 months to be slaughtered. "Moreover, the feed-to-meat ratio will be higher, and the unit cost of feed will also be higher. This is also a challenge for NetEase. It depends on whether its high-end pork can sell at a high price."
Pig farming still comes down to scale and financial strength. Pan Zhi believes that NetEase has a solid financial backing. "As long as it can recruit suitable pig farm managers, there should not be any major problems."
Ding Lei's entry into the pig-farming industry will also bring two sources of income that other industries do not have: First, according to policy, for live pig breeding enterprises investing 100 million yuan, the state will subsidize 20% of the total investment; second, more importantly, live pig breeding enterprises do not need to pay business tax or personal income tax, among others.
Taking Zhejiang Kangshun as an example, an 18 million yuan investment was assessed as a 10 million yuan investment, and it received a 2 million yuan subsidy. The huge operating revenue from selling 16,000 live pigs in 1 year also does not need to be taxed, and the 4.8 million yuan profit distributed to individuals can also avoid personal income tax. "The burden of agricultural tax has also been lifted, which increased our enthusiasm for investing in the live pig breeding industry." Pan Ada said.
"For 300 or more but fewer than 600 sows capable of breeding on hand, with an annual slaughter of 5,000~9,999 commercial pigs, the subsidy is 800,000 yuan; for 1,500 or more sows capable of breeding on hand, with an annual slaughter of more than 30,000 commercial pigs, the subsidy is 3 million yuan." Yueqing City also introduced supporting encouragement measures.
Industry insiders conservatively estimate that once Ding Lei's pig farm confirms an investment scale of about 100 million yuan, it will not only receive about 20 million yuan in subsidies, but local governments will also provide more supporting support and reward policies.
Doing the "Pig Farming Math" for Ding Lei
□Investment
Mainly includes factory construction, equipment, and environmental protection facilities
□Return
According to current market conditions, costs can be recovered in 3~5 years
□Profit
Heard that 100,000 yuan can earn 200,000 yuan a year, very tempting
□Policy
Can receive 20% subsidy, and there are other support policies
--------------------------------------
Without attention to technology, launching blindly will likely mean going up fast and falling fast
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Are pigs that easy to raise? Are they still waiting for these moneyed people to do it?! Livestock experts would have done it long ago.Be realistic,In China, when raising pigs, equipment cannot blindly believe in so-called technology; it must be practical + input-output ratio. If calculated according to Boss Pan's method, no pig farm is losing money.
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Are pigs that easy to raise? Are they still waiting for these moneyed people to do it?! Livestock experts would have done it long ago.Be realistic,In China, when raising pigs, equipment cannot blindly believe in so-called technology; it must be practical + input-output ratio. If calculated according to Boss Pan's method, no pig farm is losing money.
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Is it not that easy to raise
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How well he can actually do it, let's just watch together~
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Let's look again next year, entertainment haha
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Industry insiders rarely take his pig farming seriously.
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Purely entertainment!!!
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Different trades are like different mountains; his brain must be soaked in water!
yxdl added the following content on 2009-11-20 10:53
Different trades are like different mountains; his brain must be soaked in water!
yxdl added the following content on 2009-11-20 11:24
If he can raise pigs this way without losing money, he should burn high incense. Maybe the tax preferential policies behind it are the key.