The pig farming industry ushers in its best era: August 2015 to the end of 2016

Feng Yonghui believes that if 2013 and 2014 were "the worst era" in the history of the pig market, then August 2015 to the end of 2016 is expected to be "the best era."

1 A profit of 150 yuan per head is the dividing line between working a job and raising pigs

A profit of about 50 yuan per head serves as the opportunity cost dividing line for the pig farming industry. Based on the environmental equipment conditions of family pig farms, generally a young laborer can fairly easily market 500 head per year. At a profit of 150 yuan per head, the annual net income of 72,000 yuan is basically equivalent to going out to work. Therefore, a profit of 150 yuan per head can basically serve as the cost dividing line for pig farmers in choosing between going out to work and raising pigs at home.

2 A profit of 300-500 yuan per head is the optimal profit state

A profit level of 300-500 yuan per head is double the balanced profit level, yet still some distance from the historical high. Therefore, although the corresponding pork price feels slightly high to consumers, it is still acceptable. Moreover, the pig price corresponding to such a profit will not touch the warning line for policy regulation. At the same time, although such a profit is higher than that of ordinary industries for outside capital, due to industry characteristics such as raised entry barriers, high investment, high disease risk and high market risk, it basically poses no sufficient attraction. For practitioners already in the industry, the unusually long loss period just passed has dealt them a severe blow, so a profit of 300-500 yuan per head can be called the optimal profit state of the pig farming industry.

Such a profit must last at least a year or more before restocking may restart. Now is the most ideal state of the live pig market, and this ideal state will last 1.5 years. The reason restocking in 2015 will fall below expectations is that pig farms were dealt a severe blow in 2014, and the pig farming industry was dealt a severe blow. Why was the loss period in 2013-2014 so long? Because the scale proportion of the entire industry increased significantly, and the pig farming industry's ability to resist risk was improving, so the speed of eliminating excess capacity was very slow. According to the laws of macroeconomic development, as long as urbanization construction needs migrant workers, and there is no wave of migrant workers returning home, the process of scaling up will further accelerate in the future. The higher the degree of scaling up, the slower the speed of eliminating excess capacity and the longer the losses last. From this perspective, once sow restocking starts in 2016, the losses in 2018-2019 may be even worse than in 2014! It must also be considered that as the WTO protection period expires, more and more imported pork will come to China, and the pressure on the domestic pig farming industry at that time can well be imagined.

3 Seize the opportunity before the end of 2016 to raise productivity levels

If in 2016 the live pig market remains at 7.5-8.5 yuan/jin and the profit per head remains at 300-500 yuan, then starting from August 2015, the live pig market is expected to remain in this state until the end of 2016, for nearly a year and a half. Everyone should make good use of this year and a half to improve productivity such as the number of live piglets per farm, so as to welcome the restart of restocking a year and a half later. If this opportunity is not seized, what awaits everyone? Being eliminated... This struck a chord with many pig farmers, and the applause was continuous.