Made a million from farming this year - will pig farming lose money next year?

From the second half of 2015 to the first half of 2016, a spring season arrived, and farming profits kept rising. In late May and early June 2016, the theoretical farming profit reached 1000 yuan/head. If farmers did not factor in their own labor, and with pigpen depreciation and holding pigs back from market, the farming profit reached 1500 yuan/head, and selling 100 head brought in 150,000-180,000 yuan, far better than working for wages. Raising a sow could earn 5000 yuan per litter of piglets, even reaching 7000 yuan/litter. Farming and breeding profits were far above historical levels. At present, in the fourth quarter of 2016, pig prices as a whole are still at a high level, with an expected range of 7.8-9.2 yuan/jin. Farmers still have substantial profits, especially as corn prices in North China are expected to fall to 1300-1400 yuan/ton, with feed costs dropping sharply.

With such substantial farming profits, based on pig price cycles in previous years, live pig supply in the fourth quarter of this year will increase significantly, prices will decline, even falling rapidly for a short time, farmers will be unable to make money, and as time goes on farming will begin to lose money. In this round of the pig cycle, due to stricter environmental protection requirements, a large number of farmers born in the 1950s and 1960s have exited, and the recovery of live pig farming has been noticeably slower than in previous cycles. But we also need to note that in an overall economic environment that is not optimistic, excessively high farming profits will still stimulate expansion of farming scale, especially as current large-scale farming groups expand frantically, with 500,000-head and 1-million-head farming bases successively starting construction and going into production. Under conditions of slowing pork consumption, the major upward cycle of pig prices will also end in June, and afterward will keep declining, with the highs and lows of pig prices gradually moving lower.

Comprehensive assessment: in the fourth quarter of 2016, with feed costs declining, farming profits will still be relatively good, with farming profit at 200-500 yuan/head, and not counting own labor and equipment depreciation, it can reach 500-800 yuan/head. But as the second quarter of 2017 begins, pig prices will fall below 7 yuan/jin and move toward 6 yuan/jin or even lower. Farmers with poor management may see losses in farming, and farmers still need to pay more attention to controlling risk.