(Original title: High pig prices support breeding profits to hit a new high during the year in Q4 or there is still room for upside)
Financial Associated Press, September 19 (Reporter Liu Jian and Wang Ping’an)Affected by the continuous fluctuation of live pig prices, the profit of live pig breeding has reached the highest level in the year. Financial Associated Press reporters have learned from various interviews that the price of pigs is expected to be further pushed up in the peak season of live pigs in the second half of the year. Although there is pressure to increase the price of feed at the cost side, the impact is expected to be limited, and the profit of pig farming in the fourth quarter will remain at a high level.
Farming profits hit a new high for the year
Mysteel agricultural product statistics show that as of September 15, the average weekly profit of self-breeding and self-raising was 858.29 yuan per head; before 5.5 months, the purchased piglets made a profit of 947.81 yuan per head at the current pig price, and the profit level reached the average level in 2021.
(Source of self-propagating and self-supporting profit chart: Shanghai Ganglian)
In a pig breeding exchange group where a reporter from the Financial Associated Press is located, most free-range farmers believe that the breeding profit is in a relatively high and reasonable area, and they are satisfied with this. The data match.
A relevant person from Wen’s (300498.SZ) also told the Financial Associated Press: “Currently, the profit of breeding is at a high level during the year.”
In general, the profits of backyard farmers are higher than those of large-scale pig enterprises. Wu Menglei, a pig analyst at the Agricultural Products Division of Shanghai Ganglian, told the Financial Associated Press: “In terms of the profit difference between free-range farmers and group farms, the breeding costs of small and medium-sized free-range farmers are generally lower than that of group farms. The average profit of free-range accounts is higher than that of group farms.”
The profit of breeding has reached the highest level in the year, which is mainly supported by the high pig price that has continued to strengthen since Q3. According to data from China Pig Network, as of September 19, the price of live pigs (external three yuan) was 24.02 yuan/kg, a year-on-year increase of 91.24% and a month-on-month increase of 11.05%.
There is still upside in Q4
Looking forward to the live pig market in Q4, a relevant person from Wen’s Co., Ltd. pointed out: “Generally, the market in the second half of the year is better than the first half of the year. There are more holidays in the second half of the year, and the weather will turn cold.”
“Individually, I am optimistic regarding the market in the fourth quarter, and the demand for pork is expected to be relatively large.” Wu Menglei said that this year’s New Year’s Festival is relatively early, and the corresponding pickles and enemas will also be advanced by half a month. Although the epidemic has a certain impact, the rigid demand for the New Year is still there, so the price in October was relatively weak, and the market began to pick up following November, reaching the second high point of the year in December.
Zeng Zihua, chief analyst of Zhuyi.com, also said: “Although the profit of live pig farming is currently at a high level, it is possible that it will continue to rise in Q4, reaching a high point this year.”
It is worth noting that recently, due to the continuous rise in the price of feed raw materials, many feed companies have announced price increases, which has put a certain pressure on breeding profits.
However, in Wu Menglei’s view, the increase in the prices of feed raw materials and finished products has a relatively limited impact on breeding profits, so there is no need to worry too much. On the one hand, the price increase of raw material costs is relatively controllable, and there is little room for continued price increases. It will continue to rise, and there is still room for growth in breeding profits during the year. “In my opinion, the profit of pig farming in the fourth quarter will remain at a high level, ranging from 800-1,000 yuan per head.”
However, the state has repeatedly proposed stable production and price protection and various control measures; at the same time, if the market consensus is too high, there may be centralized slaughtering, slaughtering, secondary fattening, and centralized delivery of frozen products, etc. Price movements bring some uncertainty.
Wu Menglei said that the increase in piglet births may lead to less supply at the end of the year. According to statistics, the month-on-month change of piglet births from June to July is around 2%-3%, which will increase the supply growth expectation at the end of the year; 9- The market break period in October (recession in demand and periodic lows in prices) stimulated the second wave of secondary fattening to enter the market in large numbers. It is expected that there will be no shortage of weight gain and concentrated slaughtering and slaughtering caused by the strong consistency of market views.
(Editor Liu Yan)
