Major farming companies have already achieved profitability in May, and it is expected that the trend of fluctuating upward in pig prices will continue in the future. On the product structure, the operating income of 10-30 billion yuan products are 401/1288/60 million yuan respectively.
After falling and then rising again, the price of live pigs in June has plateaued at a high level. As of the 17th, the lowest national average price was 18.33 yuan/kg, and the highest price was 18.98 yuan/kg. Due to a decrease in the number of market-goers, upbeat attitudes in the upstream breeding sector, and limited acceptance of high prices by slaughter companies, the price of live pigs is characterized by a tug of war or a standstill between supply and demand.
Due to the impact of last year's reduction in pig production capacity, the future output of live pigs is expected to continue to decrease. At the same time, industry insiders are generally optimistic and there is a strong bullish atmosphere. Therefore, ZhuoChuang information believes that the strong expectation of pig prices remains unchanged.
It was learned from the Ministry of Agriculture and Rural Affairs that since May, the national pig production capacity has been basically reduced, and the price of live pigs has continued to rise.
Experts explain that the national average price of live pigs in the second week of June was 18.41 yuan per kilogram, an increase of 25.7% from the beginning of March.
With the adjustment of live pig production capacity and the rising prices, the benefits of breeding farm households have greatly improved, and their enthusiasm for increasing holdings is also increasing.
A breeding farmer from Qingdao, Shandong said that selling a pig now can earn about 500 yuan, and the benefits have increased significantly.
In the context of global warming, abnormal atmospheric circulation and El Niño have led to frequent high temperatures in northern China recently. These high temperatures have a significant impact on the planting industry and the pig industry. In terms of the planting industry, the current Yellow and Huaihe River region is in the peak summer planting period, and high temperatures have caused the soil to dry out quickly, resulting in drought in some areas. The Ministry of Agriculture and Rural Affairs and other four departments have deployed measures to fight against high temperatures and drought to protect summer planting and young seedlings. In terms of the pig industry, from the consumer side, high temperatures will form a certain degree of pressure on pork consumption. After the Dragon Boat Festival, the high pig prices combined with high temperatures have restricted the performance of the terminal white stripe market, leading to a decline in slaughter volume. At present, the temperatures in many regions are high, and the terminal consumption is lacking quick improvement driving forces.
Overall, as the live pig production capacity is reduced, the bullish expectation for pig price increases remains unchanged. Major farming companies have already achieved profitability in May, and it is expected that the trend of fluctuating upward in pig prices will continue in the future.
Overall, as the output of live pigs decreases under the background of the adjustment of production capacity, the expectation for pig price increases remains unchanged. Major farming companies have already achieved profitability in May, and it is expected that the trend of fluctuating upward in pig prices will continue in the future.
Hog farming-related companies:
Dekang Agriculture and Animal Husbandry (02419): Its food processing plant project in Yibin, Sichuan Province is underway, and its slaughterhouse began operation in October this year, with a target annual slaughter volume of over 3 million pigs. At the same time, it has cooperated with Tönnies in Germany to establish a joint venture company and has preliminarily built a slaughterhouse with an annual slaughter volume exceeding 2 million pigs in Meishan city. Recently, pig prices have risen and the company's costs have improved. China International Capital Corporation has upwardly revised its forecast of net profits for 2024 from 1.2 billion yuan to 2.6 billion yuan, while maintaining its forecast of net profits for 2025 at 3.8 billion yuan.
Cofco Joycome (01610): In May 2024, the output of live pigs was 265,000, an increase of 8.61% quarter-on-quarter. The average selling price of big commodity pigs increased by 4.85% to 16 yuan/kg. The sales volume of fresh pork was 20,900 tons, an increase of 3.98% quarter-on-quarter, and the proportion of brand income in fresh pork business was 26.43%.
WH Group (00288): Its main business operations are in Europe and America. In November 2023, WH Group stated that the company is evaluating its US business and considering to operate this business for IPO.