You can get off the plane from Zhengzhou Xinzheng Airport and drive to Xuedian Town in the suburbs in half an hour by taxi. When you get off the highway and turn into the town's Century Avenue, you can see the sign of the listed company Eagle Farm and Animal Husbandry.

Young Eagle Farm and Animal Husbandry is the first A-share listed pig company, and many investors come to investigate it every year. What they have in common is that after getting out of the car, they will take a sharp sniff and try to smell the pig dung in the air. However, after entering the factory area, they will be dragged by the receptionist to an exhibition hall of 4800 square meters, and three big characters are written at the door: pig mansion.

The pig mansion has exquisite pig culture Kanban, a huge pig farm model, and a fat white pig statue in the center of the hall, surrounded by four little pigs, attracting visitors to take photos and compete with the pig in the same frame. I went to do research in 2016, and as soon as I entered the door, the commentator girl said aloud, "what we show here are all pigs!" "

I looked at the photos of the leaders posted all over the wall, and immediately felt that the folkways of the Central Plains were simple and simple.

The owner of the baby eagle is Hou Jianfang, a native of Xuedian Town, and there are many stories, such as poaching a female lecturer from the Sinology class to be president, subsidizing her son Hou Tingge to engage in e-sports, spending hundreds of millions of shares in Shaxian snacks, transforming into finance, and finally owning 10 billion yuan in debt, and so on. These stories are widely read in the capital market circle, and they have nothing in common: they have nothing to do with raising pigs.

2019 is the year of Yihai Pig, but the fledgling eagle farming and animal husbandry is unfavorable. Since the second half of last year, the baby eagle has been exposed one after another with negative news such as false financial statements, tight cash flow, liquidated stock pledge, downgraded credit rating, and using pork to "repay" 500 million loans. Hou Jianfang's 1.26 billion shares were also frozen on the waiting list.

Listed companies are in trouble, and it is also difficult for farmers in the industrial chain. According to the Beijing News, Zhang Dafei, a pig farmer in Zhongchao Village, Sanmenxia City, where young eagles are co-bred, has been in short supply since November last year, after feeding more than 2000 jin of corn saved in his family's autumn harvest to pigs. finally, 57 pigs starved to death in 15 days.[4]。

On January 30, 2018, six days before the Spring Festival, the baby eagle announced that it expected a loss of 29-3.3 billion yuan, citing "the company's tight capital, untimely feed supply and higher-than-expected pig mortality rate." In the face of this "scallop ran away" level explanation, some netizens joked: if calculated according to the meat price, it would at least starve to death of millions of pigs.

Millions of pigs fell before the Spring Festival Gala of the year of the Pig, as if setting a tune for the year.

01

In Lujiazui, you can find at least 5000 financial migrant workers who are good at analyzing the pig industry, more than the number of pig farmers in Shanghai. The word they talk about all day is called "pig cycle".

In the past 16 years, China has experienced almost four complete pig cycles, each with a length of about 1400-1500 days. The bottom of the last cycle was in April 2014. It is estimated that by the end of 2018, when the baby eagle starved to death of millions of pigs, pig prices have been hovering at the bottom for less than half a year.

Each "pig cycle", the story and plot are very similar: pork prices fall-farmers eliminate a large number of sows-pig supply decreases-meat prices rise again-farmers turn around and make up lots of fences-sow stocks soar-live pig supply soars-pork prices fall again.

The three-round pig cycle since 2006 has basically followed this rhythm. At the bottom of each cycle, farmers lose money and begin to phase out sows. Some people will wonder: since the pig cycle clearly exists, why don't farmers go against the trend, expand capacity at the bottom and make a lot of money at the top of the cycle?

There are many reasons here, but the main reason is that China's pig industry, like China's securities market, has too many individual farmers, accounting for nearly 50%. These ordinary peasant families, who do not understand the advanced cycle theory, only know how to kill and sell pigs when meat prices plummet and get back on the horse when meat prices soar. They get up early in the morning and stay up late at night, crying as much as sweat.

At the bottom of this round in 2018, in addition to the loss of capacity, there is an unusual black swan: non-plague.

On August 3, 2018, the first non-plague epidemic occurred in Shenyang, Liaoning Province, and then spread to many provinces across the country. By the end of last month, non-plague outbreaks had occurred in 31 provinces across the country, with a cumulative number of 150 cases and 1.16 million pigs culled. You know, the total number of live pigs in China is about 700 million, and 1.16 million does not seem to account for much.

However, the number of pigs that are indirectly "eliminated" by non-plague is far more than 1.16 million. According to the survey of Xinmu Network, pig production capacity in various regions of the country has been seriously eliminated, with a median of 50%, and even decreased by more than 80% in some areas such as Jiangsu. The selling and clearance of scattered farmers around the country is the main reason for this drastic capacity loss.

How much pork production will be reduced in the end? We do not dare to speculate, just look at the authoritative data. For example, Li Shuilong, president of the China Meat Association, estimated that total pork production could drop by 15%, or 8 million-10 million tons, in 2019. "it is also believed that the production reduction may reach 40%, with a shortfall of more than 15 million tons."[5]

While supply is plummeting, demand for pork is still strong. As we all know, the small elasticity of demand is a common feature of agricultural products, which means that small fluctuations in supply can easily lead to drastic changes in prices. In the past, "garlic is ruthless", "Jiang your army" and "beans you play" have something to do with the characteristics of agricultural products.

The same is true of pork, where a small reduction in supply can cause prices to soar. For example, in 2007, China's pig supply decreased by 8%, while pork prices rose by about 65%. In 2011, China's pig supply decreased by 6%, but pork prices rose by about 46%. In 2016, pig supply decreased by 3.3%, but pig prices rose by 22%.

The securities firm has made a simple calculation: the relationship between the contraction of pig supply and the rise in pork prices is about 1:7.[3]. According to the statistics of the Ministry of Agriculture, by June 2019, the number of live pigs in China has dropped 25.8% compared with the same period last year, so guess how much pork will eventually rise compared with last year's lowest price of 10 yuan / kg?

The price of pork has not yet reached its peak, but the market capitalization of listed pig raising companies has reached new highs. The market value of Muyuan shares of the leading company is as high as 167.5 billion yuan. According to the 12 million pigs produced in 2019, the market value of one pig is as high as 14000 yuan. By comparison, Tencent, who has 1 billion daily active users of Wechat, has a market capitalization of 2.8 trillion yuan, while a single user has a market capitalization of 2800 yuan.

The value of Internet users can not even catch up with the small change of pigs. I was in a hurry to play the transformation of e-sports 's baby eagle farming and animal husbandry, so I'm afraid I'm going to cry and faint in the pigsty.

02

Before Hou Jianfang led the young eagle to indulge in capital operation, he also had a simple image of having thick eyebrows and big eyes and concentrating on raising pigs.

In 1988, Hou Jianfang, who failed the college entrance examination three times, was discouraged and decided to build a new socialist countryside honestly. It was obvious that farming could not get rich, so he thought about engaging in agricultural and sideline industries. After going to Zhengzhou for 23 days of animal husbandry training, Hou Jianfang went home and borrowed 200 yuan to start a business, opened a chicken farm, and soon earned the first bucket of gold.

In 2004, Hou Jianfang, who enjoyed the sweetness of raising chickens, advanced into the pig raising business. after several twists and turns, nestling agriculture and animal husbandry gradually formed a unique model of "company + base / partner + peasant household", which led many local farmers to get rich. In 2006, the profits of nestling eagle farming exceeded 10 million for the first time, and then doubled in successive years.

Hou Jianfang has the shrewdness and rustic spirit of township entrepreneurs in the 1980s. In 2007, he went to Shenzhen Chinese Business Academy to study Sinology and met Li Hua, a beautiful head teacher who worked as a lecturer in Sinology and had never come into contact with enterprise management. One day, Hou Jianfang flew from Zhengzhou to Shenzhen and found Li Hua and said sincerely:

Mr. Li, I have been watching you for a long time, and you are the talent I have been looking for!

In this way, the Sinology lecturer became the deputy general manager of the pig-raising enterprise and was later promoted to president. Chairman Hou's vision of "unrestrained talent" and the discerning eye of "you are the only one in the flowers" are seen and remembered by various brokers. After the listing of the company, they came one after another with various projects and plans.

In 2014, the pig cycle reached the bottom, and the baby eagle lost 184 million yuan that year, while Hou Jianfang was fascinated by the boom in gem and the Internet, driving him away from pig farming and into dazzling capital operations. before and after spent more than 7 billion on various projects.

During the downward phase of the pig cycle, where did the baby eagle get so much money? In June 2018, the market capitalization Fengyun published a long article questioning the financial fraud of the baby eagle.[6]It reveals a new invention of his family: pigsty transfer. To put it simply, it is to raise money from shareholders to build a pigsty, sell it quickly after it is built, and do something else after getting the money. The way is very wild.

For this kind of person who has changed from simple rustic to grandiose and vain, what Guo Jingfei scolded in "everything is fine" is good: "Su Daqiang, after my mother died, you became too wild!" "

What happened later is well known: after being questioned by the market capitalization of financial fraud in June 2018, the baby eagle successively encountered a whirlpool of downgrades, broken capital chains, debt defaults and huge performance losses, and finally in August 2019, when pork prices soared, the former "pig star stock" was ordered to be delisted by the CSRC.

Hou Jianfang is worried about the transformation. Some people think that it is the cold winter of the pig cycle, while others think that the capital market is too tempting, but no one has ever mentioned this point: Hou Jianfang may not really like raising pigs!

No matter how pig farming is related to the national economy and people's livelihood, it is, after all, a hillbilly industry that serves pigs to eat, drink and scatter. It cannot be carefully packaged like Chu Orange, and it is even more shameful compared with high-end industries such as finance, real estate and the Internet. Among the rich who rely on pig families to get rich, Hou Jianfang thinks so, and so does Zhu Yicai, Yurun's boss.

Yurun, which does not raise pigs but only kills pigs, is one of the largest meat production companies in China, on a par with Shuanghui in Henan Province. In 2001, Zhu Yicai entered the Forbes rich list by selling pork, and soon expanded into real estate, culture, tourism and other fields. finally, he was mired in debt and losses, and he was jailed, worse than Hou Jianfang.

It is understandable that Hou Jianfang and Zhu Yicai want to transform the Internet and real estate, but ironically, the bigwigs in the Internet and real estate fields all want to raise pigs.

03

In December 2014, Wang Sicong and Jiang Wenxin film "one step away" tore the sky dark, but his father Wang Jianlin made a decision: to raise pigs in Guizhou.

The location was chosen in Danzhai County for the purpose of poverty alleviation. The richest man is naturally remarkable. He plans to build 300000 black-haired pig farms and slaughterhouses on a scale. Wanda will provide piglets and feed, and the poor people in the county will buy shares in the farms for free and enjoy dividends, and the pork produced will be sold directly to the whole country through Wanda Square.

Of course, another background of poverty alleviation in Guizhou is[7]Guizhou is the only two provinces in China that Wanda does not enter (the other is Tibet). Three months after Wang Jianlin announced that he would go to Guizhou to help the poor, Wanda signed a strategic cooperation agreement with the Guizhou provincial government, and two and a half years later, Guizhou's first Wanda Plaza opened in Liupanshui.

However, raising pigs is much more difficult than building Wanda Square. In a video released from the inside, Wang Jianlin said angrily to Danzhai government officials: "originally I thought to build a pig farm." He went back and told me that it would cost hundreds of millions of dollars to build a pig farm. I said it would cost you several hundred million to build a pig farm. How much would it cost us to build a five-star hotel? "

Wang Jianlin's surprise is not surprising. In recent years, giants that cross the border into the pig industry have sprung up one after another, such as Goldman Sachs Group, NetEase, Inc, Fosun, Country Garden Holdings and other companies that have nothing to do with pigs. Only when they entered the industry did they find that this ancient skill has become a costly, sophisticated and technology-intensive business.

The pig raising model after the founding of the people's Republic of China has gone through three stages: from 1950 to 2000, mainly rural retail farmers, raised in pig pens on homestead; after 2000, there was the stage of the rise of specialized farmers. Gradually formed the "company + farmers" Wen's model and "integrated self-breeding and self-breeding" pasture model, large pig giants continue to emerge.

NetEase, Inc and Wanda, pig amateurs, are not good at dealing with farmers, so they can only choose the pasture mode of self-breeding. But this model is a veritable asset investment, with an investment of more than 100m yuan for every 100000 pigs, coupled with rising feed and labor costs, no wonder even China's richest man complains that it is too expensive.

In addition to the large investment, the difficulty of raising pigs increases with the scale. A pig factory with a capacity of 100000 has to worry not only about breeding, feed, artificial insemination, vaccines, air pollution, water pollution, and so on, but also how to improve core commercial indicators such as feed-to-meat ratio, PSY, and commodity generation survival rate. The management cost is extremely high.

Because of this, Wanda hesitated for half a year before starting to raise pigs, and even inspected five pig-raising enterprises across the country and found that they did not make much money, so they gave up the grand plan of raising 300000 pigs in Danzhai County and turned to develop Wanda small towns. engaged in tourism real estate and commercial real estate, returned to Wanda's familiar old business.

In addition to Wanda, the bosses who shouted about raising pigs ended up talking about pigs on paper, with big thunder and little rain. Therefore, the next time someone claims to go to the countryside to help the poor, it is suggested that we first check the surnames of local officials, and we will understand that the purpose of rich people is often so simple and boring.

The only pig raised is Ding Lei, but the number of pigs is only 20, 000, the scale is 1/1000 of the leading company in the industry, and the price is as high as 49 yuan per jin, which is not representative. However, the black-haired pig in NetEase, Inc's promotional film is thick-haired and black, and is popular with Hangzhou programmers who are scarce and not short of money.

It is difficult to raise pigs, which is not only the feeling of real estate and Internet giants, but also the feelings of ordinary farmers in the past two years.

After 2014, bulk farmers began to withdraw from the market in large numbers. This is related to the reduction of the rural labor force, but another factor is that the environmental protection ban and maintenance restrictions are getting stricter and stricter. In 2016 alone, the number of live pigs reduced by environmental protection reached 36 million, and by 2017, another 20 million pigs were eliminated by environmental protection.

By 2018, the prevalence of non-plague has greatly increased the withdrawal rate of individual farmers. One data can show how high the range is: the National Bureau of Statistics conducted a survey in Jincheng, Shanxi Province, and found that due to the influence of the epidemic disease, 1/3 of the farmers in the largest city of Shanxi pig industry, which produced nearly 1.8 million pigs this year, chose to quit the pig industry.[5]

When it comes to raising pigs, we always like to focus on those business bosses who play with tickets, dead A-share bosses and soaring pig stocks, while those ordinary farmers who leave sadly, are they all right?

04

Mao Zedong wrote a letter to Wu Lengxi, president of the Xinhua News Agency, on October 31, 1959, in which he said: "it has been suggested that pigs should be raised to the top of the six livestock." I agree with both hands that it is fair and just that pigs are in the first place. More than a month later, there were six big words printed on the front page of People's Daily: "Pig is the head of the six animals."

Sixty years later, with such a profound summary, I think it is necessary to learn again, for example, in the year of pigs, should we pay more attention to the farmers who get up early in the morning and wait on the head of the six animals?

In 2014, the first national administrative regulation in the field of rural and agricultural environmental protection, the regulations on the Prevention and Control of pollution from large-scale farming of Livestock and Poultry, was implemented, and the management of individual farmers began to become stricter. The country began to designate prohibited breeding areas in 133 counties of the southern water network, Beijing, Tianjin and Hebei, and pig farming has gradually become a "disliked" low-end industry.

The effect is amazing. At present, there are 49000 prohibited breeding areas nationwide, covering an area of 636000 square kilometers, and 213000 livestock and poultry farms in the prohibited areas have been closed or relocated. From 2015 to 2017, a total of about 60 million heads of production capacity were eliminated. Behind these magnificent data is the permanent departure of each family pig farmer.

There is no problem in guiding bulk farmers to withdraw from the field of pig raising, but the problem lies in the level of implementation. This article will not show the sad messages of pig farmers on the Internet. I only quote a speech made by Ji Bingxuan, vice chairman of the National people's Congress, when he deliberated the revised draft law on the prevention and control of environmental pollution by solid waste on June 25, 2019.[8]：

"Last year, in order to cope with the environmental protection inspection, some places demolished all the pigsty, chicken house, and sheep shed of the farmers' homes. The farmers had a strong opinion that this was nonsense and not the real solution to the problem. How can it be possible not to allow farmers to raise pigs, chickens and sheep? We should find a way to deal with the feces instead of destroying the chicken coop and ripping off the pigsty. "

Going back to the beginning of the article, when I was in Xuedian Town in 2016, an agricultural researcher with me counted the age of 20 pig farmers and found that the average was 49 years old. When I called him last month, he told me that only five of the 20 farmers were still raising pigs this year, and even if the pork went up again, they would not come back to raise pigs.

The most effective supply-side reform is the withdrawal of a whole generation of people brought about by policy superimposed ageing, whose story of leaving sadly is repeated in countless so-called "low-end industries".