Analysis of the Current State of Pig Farming in 2017 and Forecast of the Pig Farming Market
Current State of Pig Farming
Overall Pig Price Situation: Last week, the national average price of crossbred pigs (domestic three-way cross) was 16.97 yuan/kg, down 0.14 yuan/kg week-on-week; the average price of pigs from foreign three-way crosses was 17.47 yuan/kg, down 0.10 yuan/kg week-on-week. Pig prices stopped rising and turned downward; in the coming period, pig prices may show a volatile upward trend.
Pig Farming Profitability: On December 14, the national pig-to-feed price ratio was 6.8:1, up 0.1 week-on-week; on December 21, the national pig-to-grain price ratio was 9.58:1, up 1.27 week-on-week.
As of December 23, last week's national large-scale farming profit was about 380 yuan/head, flat week-on-week.
Feed Costs: Last week, the national prices of corn, soybean meal, wheat bran and compound feed were 1645 yuan/ton, 3648 yuan/ton, 1519 yuan/ton and 2750 yuan/ton respectively. The corn price fell 3.4 week-on-week, the soybean meal price rose 0.4 week-on-week, and the compound feed price was flat week-on-week. As of December 23, last week's national feed cost was 547 yuan/head, down 2.5 week-on-week.
Distribution and Slaughtering: On December 23, the national average price gap between “meat and pigs” reached 9.68 yuan/kg. As of December 23, last week's national slaughtering and distribution profit was 162 yuan/head, up 3.8 week-on-week.
At present, pig prices are overall moving in a volatile range, rebounding after a slight decline, with strong support at 17 yuan/kg. Although the smog across the country has somewhat dissipated, most regions are again experiencing rain and snow, and the transport of live pigs remains continuously hampered. After the Winter Solstice, pork demand has fallen back somewhat, but later difficulties in purchasing will support pig prices in Northeast China, the two Hu provinces (Hubei and Hunan), Shandong, Henan, Beijing, Anhui, Jiangxi and other places in showing a rebound and upward momentum. Before New Year's Day, rain and snow will still affect the shipment and transport of live pigs in some areas, and the difficulty of purchasing live pigs remains; it is expected that before New Year's Day pig prices will still maintain a volatile upward trend, but the extent will be limited.
Forthe 2017 pig industry outlook, the main trends are as follows:
Policy aspect: On December 19-20, the Central Rural Work Conference clarified the direction of agricultural structural adjustment for next year. The direction for the pig industry in 2017 is mainly to optimize the regional layout of pig farming, accelerate the transformation and upgrading of pig farming in the southern water-network areas, and guide pig farming to shift to major corn-producing areas and areas with large environmental capacity. While coordinating with the reduction of corn planting, pig production capacity will be expanded to make up for the relatively insufficient pig inventory and supply.
Enterprise aspect: Zhengbang Technology currently has abundant land reserves and ensures rapid expansion of production capacity through a non-public offering of shares to raise funds for projects. It is expected to slaughter 3-3.5 million pigs in 2017, while advancing the farming service station project to increase feed sales and, through one-stop farming services, further enhance customer loyalty. Chuying Agro-Pastoral is actively upgrading its asset-light farming model; the transfer of assets of pig houses and supporting facilities is still proceeding in an orderly manner, and the pace of future capacity expansion will accelerate. At the same time, it has launched cooperation with Shaxian Delicacies to reduce the cost of sales channel layout and place advertisements to obtain revenue.