On August 5th, the average price of live pigs officially surpassed 20 yuan, and the peak of the hog cycle continues to exceed expectations. A practitioner told reporters from Cailian News, 'I thought 19 yuan was the highest point before, but today it has already exceeded 20 yuan and is heading towards 22 yuan per kilogram.'

Hog farming has officially entered the peak period of profitability within the year. The average profit per head of low-cost pig-breeding enterprises has surpassed 700 yuan. This has triggered speculation among the industry and investors about whether listed pig-breeding companies will increase the output in the second half of the year and compete for cycle dividends under high average profits per head.

Reporters from Cailian News interviewed most listed pig-breeding companies and learned that the output of most pig-breeding companies, including Wens Foodstuff Group (300498.SZ), Shen Nong Group (605296.SH), and New Hope Liuhe (000876.SZ), will still maintain their previous plans in the second half of the year, and the output will not change significantly. New Hope's secretary of the board of directors, Lan Jia, told Cailian News, 'It looks like there won't be a significant increase in output for each month in the future and it will be similar to these months. However, some pig-breeding companies have indicated that although the overall output will not be adjusted, there may be slight adjustments between months.'

In fact, under the expectation of the surge in the peak of the hog cycle, even if the overall output of listed pig-breeding companies remains unchanged and the original plans of output in the early year will still be carried out, the profit expectation is still strong. Previously, reporters from Cailian News roughly estimated the profit of various pig-breeding companies during the year based on their output targets and costs. The profitability of each company during the year is quite impressive, and leading companies like Muyuan Foods (002714.SZ) are expected to achieve profits of more than 1.77 billion yuan. (Report Link:

Pork prices soared! Listed pig companies have escaped from the "abyss" of losses: how much money can they earn this year?

The peak of the hog cycle has exceeded expectations, and the average return per head has exceeded 700 yuan.

As of August 5th, the national average price of live pigs has fully exceeded 20 yuan, while some provinces in the southern region have even exceeded 22 yuan. At the same time, the futures contract for live pigs (2409) also hit a new high for the year, closing at 19175 yuan/ton.

Reporters from Cailian News noticed that the upward peak of this hog cycle is exceeding expectations. In April of this year, a responsible person from a listed pig-breeding company told reporters from Cailian News, 'I think the high point of pig prices this year may be around 18 yuan per kilogram and it will not be too high.'

At that time, frontline practitioners were not too optimistic either. 'The second half of this year should be better, but the highest point probably won't be as high as 19 or 20 yuan. It would be great if it remains between 19 and 20 yuan,' they said.

However, from the recent strong trend of pig prices, the 22-yuan threshold may also be broken. A front-line breeder told reporters from Cailian News, 'I thought 19 yuan was the highest point before, but today it has already exceeded 20 yuan and is heading towards 22 yuan per kilogram. Many self-media on the internet indicate that 22 yuan will be reached soon. Based on my current costs, I can earn about 770 yuan for slaughtering a pig, and even over 800 yuan for weighty pigs. It has doubled compared to May.'

Zhu Zekun, a live hog analyst from Zhuo Chuang Information, told reporters from Cailian News, 'Expectations have increased, and the highest pig prices in previous optimistic expectations were mostly around 19-20 yuan/kg, but now it has obviously exceeded expectations. Moreover, there is a trend of further strengthening since pig prices have broken through 20 yuan and do not follow the fundamentals. It is possible to boost pig prices to the highest point of the year all of a sudden. The average profit has already exceeded 760 yuan since last Friday.'

The breeding profits of listed companies are also rising. Taking Muyuan Foods as an example, with an average price of 20.41 yuan per head, and combined with its cost of nearly 14 yuan per kilogram market, it can realize profits of over 700 yuan for each pig slaughtered.

Against the backdrop of the expected increase, the Price Monitoring Center of the National Development and Reform Commission also stated today that considering the persistent gap in live pig inventory, there is a strong willingness from breeders to raise prices. After experiencing a small drop, pig prices may rise again slightly. It is expected that the weekly average price of live pigs will increase slightly this week and the expected profit of live pig breeding will increase slightly.

'Buying at the Bottom' for profit? What do listed companies say?

With the high returns per head exceeding 700 yuan, insiders and investors are speculating whether listed pig-breeding companies will increase their output in the second half of the year and seize the peak period dividends of this hog cycle.

Lan Jia, the secretary of the board of directors of New Hope, told reporters from Cailian News, 'The breeding and planting plans for the second half of the year have been basically determined, with a range of output numbers. From what I see right now, the output for each month in the future should be similar to the past few months, and there will not be much increase.'

Personnel from Wens Foodstuff Group answered that the company has always adhered to balanced production and prudent management without taking bets on the market. The output in the second half of the year is mainly related to factors such as the previous planting volume and production and operation level and is not significantly influenced by the current pig prices. The current pig prices may affect the subsequent planting plans and thus affect the subsequent output.

Jiang Hong, the secretary of the board of directors of China National Chemical Corporation, told Caixin reporters, "The change in the output of live pigs needs to be planned from the reserve of breeding pigs, breeding, conservation, and fattening, and the increase or decrease in output needs to be planned in advance and the cycle is relatively long, so it is not possible to increase the output in a very short period of time. Therefore, the company did not increase the output in the third and fourth quarters, and will still follow the plan at the beginning of the year."

However, even if the overall output remains unchanged, some listed pig companies have indicated that there is a possibility of adjusting between months. ST Tianbang (002124.SZ) related personnel told Caixin reporters, "The overall volume will not change much because the output actually determined six months ago. But if the outlook is bullish later, it may be raised a bit, and there may be small adjustments between months based on the prices of their own pigs and fat pigs and piglets in each region."

Another related pig company source said that the overall output is fixed, and there may be small differences between months, but since the listed pig companies are batch-oriented and continuous production, the space for adjustment between months is small.

Zhu Zekun told Caixin reporters, "The group's factory has already decided how many pigs it can produce in the second half of the year in the first half of this year. There may be some differences in the monthly output based on the profitability period, but the overall output in the second half of the year will not show significant differences, because the early investment has already been decided. And even if there is adjustment between months, the extent will not be too high."

It is worth mentioning that under the influence of seasonal consumption demand, pig companies generally have higher output in the second half of the year than in the first half of the year. Taking Muyuan Foods as an example, the company sold 32.388 million live pigs in the first half of the year, and the annual output target is 66 million-72 million heads, and the second half of the year needs to output 33.612 million-39.612 million heads.

Based on this calculation, even if relevant pig companies do not increase their output under the strong expectation of pig prices in the second half of the year, their full-year profits can still be expected.