Home » Pork prices have fallen for 22 consecutive weeks. Breeding companies reduce losses and stabilize production to cope with changes-Domestic News-Huasheng News

Pork prices have fallen for 22 consecutive weeks. Breeding companies reduce losses and stabilize production to cope with changes-Domestic News-Huasheng News

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Pork prices have fallen for 22 consecutive weeks-

Pig breeding companies reduce losses and stabilize production to cope with changes

Since the beginning of this year, domestic pork prices have fallen for 22 consecutive weeks, and the industry has suffered serious losses. Under the new situation, how to stabilize pig production and effectively avoid market risks?

The loss is still growing

Monitoring data from the Ministry of Agriculture and Rural Affairs on 500 bazaars across the country showed that in the fourth week of June, the national average price of live pigs was 13.76 yuan/kg. Starting from 36.01 yuan/kg in the third week of January, it has fallen for 22 consecutive weeks, with a cumulative decline of 62%. In the fourth week of June, the national pork price was 24.60 yuan/kg, a decrease of 29.62 yuan/kg from the third week of January, a cumulative decrease of 54.6%.

“The slaughter volume, live weight of slaughtered pigs and pork imports continue to increase, combined with the continuous launch of commercial frozen products and the sluggish consumption of fresh meat, causing pig prices to continue to fall.” As for the reason for the deep drop in pig prices, the Beijing Institute of Animal Husbandry and Veterinary Research, Chinese Academy of Agricultural Sciences Researcher Zhu Zengyong summed it up.

From the perspective of supply, the current national pork supply is very abundant. Data show that from January to May, the slaughter volume of pigs in designated slaughter companies across the country increased by 40.4% year-on-year. From January to May, pork imports were 1.96 million tons, a year-on-year increase of 13.7%. Imports of beef, lamb and poultry also increased by 18.6%, 22.4% and 13% respectively.

“The price of pork continues to drop, mainly because there were too many hairy pigs in the past. At present, the unit weight of white striped pigs on the market is generally larger, with a unit weight of more than 90 kg/head accounting for about 70%. These white striped pigs are basically delayed It took a month or two to be slaughtered, and it took too long to be slaughtered. In other words, the white pigs currently on the market are basically the hairy pigs that should have been slaughtered a month or two ago.” Beijing Xinfadi Agricultural Products Wholesale Market Statistics Department Manager Liu Tong said.

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Liu Tong told reporters that the phenomenon of large white-striped pigs taking up too much started before the Spring Festival and has been going on for several months. It is estimated that in one or two months, the oversized pigs will not be able to digest them completely.

What is the profit and loss situation of the farmers? It is understood that at present, the average breeding cost per kilogram for self-breeding and self-raising farmers is about 17 yuan, and the breeding cost per kilogram for outsourced piglet farmers is about 26 to 27 yuan.

Zhu Zengyong’s research found that self-breeding and self-raising of 120 kilograms of commercial pigs made a profit of about 200 to 300 yuan in May, and began to lose money at the beginning of June. The loss ranged from 100 to 200 yuan, and the loss expanded to 350 yuan in mid-June. Purchased piglet farmers have already started to lose money in March. At the end of May, each pig lost about 1,000 yuan, and the loss reached more than 1,400 yuan in mid-June.

Use hedging to reduce losses

The price of pigs has fallen deeply and has fallen below the cost of breeding, but farmers still have ways to minimize losses. This method is to participate in hog futures trading.

At the beginning of this year, my country’s first live-delivered futures variety-live pig futures was officially listed for trading on the Dalian Commodity Exchange. Although hog futures will not directly affect the fundamentals of domestic hog supply and demand, futures hedging provides a way for companies in the industry chain such as breeding, slaughter, and trade to evade price risks and maintain and increase value.

The so-called futures hedging means that operators use futures contracts as a temporary substitute for buying and selling commodities on the spot market in the future, and carry out buying and selling operations in advance to lock in prices in advance to avoid the risk of large fluctuations in market prices.

The pig breeding cycle is relatively long, and it usually takes about 10 months from the conception of the sow to the growth of the piglet for slaughter. In the long breeding cycle, there are uncertainties in many aspects such as disease, supply and demand, and feed prices. As a result, the price of live pigs may deviate significantly from expectations in the future. With the tool of hog futures, when the price of hog futures is moderate, breeding companies can pre-sell hog futures equal to their future slaughter quantity in the futures market to lock in profits in advance.

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Corresponding to the continued decline in spot prices, domestic hog futures prices have also continued to fall sharply since late February this year. However, since it was officially listed for trading in early January, until mid-May, the main contract price of live hog futures was above 25,000 yuan/ton for four months, and even hovered around 30,000 yuan/ton. Calculated at a price of 25,000 yuan/ton, if a pig breeding company sells live pig futures in time and locks in profits in advance, the benefits are still considerable.

On June 24, Jin Xinnong, a leading pig breeding company, issued an announcement stating that since the hog futures were first listed on the Dalian Commodity Exchange, the company has gradually established a hog futures hedging contract. As of June 23, all hogs in its positions have been The futures contract was actively liquidated. According to preliminary calculations, since the first quarter of this year, the pig futures hedging business carried out by Jinxin Agricultural Research Institute has achieved a profit of RMB 108,927,300.

Currently, live pig futures and spot prices have fallen below the cost of breeding. According to the law of fluctuations over the years, pig prices may rebound seasonally after July, and breeding companies can make corresponding arrangements.

Accelerate industrial upgrading

With the successful recovery of domestic pig production capacity, the fall in pig prices has objectively forced the industry to accelerate the pace of transformation and upgrading.

After the outbreak of African swine fever, due to a serious shortage of sows, large and medium-sized breeding companies adopted recurrent hybridization to produce parent sows on a large scale. At present, we are speeding up the elimination of outdated production capacity and replacing it with binary sows with higher production capacity.

“Scientific and technological innovation is the driving force of industrial development. The problem of neck-chucked pigs in my country is prominent. In the long run, my country’s pig breeding industry is attached to the industrial market, and it is difficult to reflect the guiding ideology of agriculture first, and the enthusiasm for independent cultivation of enterprises is weak. The top core breeding system is small in scale, and the independent and decentralized breeding pig supply model prevents the formation of independent seed industry technological innovation capabilities. The epidemic continues to impact the pig breeding industry, and group and specialized seed companies are still in their infancy.” Zhu Zengyong said.

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In view of the outstanding problems faced by the sustainable development of the pig industry and the technical difficulties of the main links of the pig industry chain, the industry should focus on the protection of breed resources and core population cultivation, nutrition and feed, smart breeding facilities and equipment, pig disease prevention and control, and waste prevention. Increasing efforts to tackle key problems in collaborative innovation in terms of hazardous chemical treatment and resource utilization, slaughter and processing, etc.

Zhu Zengyong said that my country is rich in pig germplasm resources, but the utilization rate is low. It is hoped that in the future, with the protection and utilization of local breeding pig resources, the improvement of the scientific and technological innovation capabilities of the seed industry, the continuous improvement of research-enterprise cooperation mechanisms, and the accelerated development of group breeding, the self-sufficiency rate of my country’s breeding pigs can be significantly increased.

“At present, pig prices are falling, and farms must not panic. It should be realized that as the production capacity of live pigs is restored, the price of pigs will fall is an inevitable trend. At the same time, the price of pigs will not continue to fall, as the big pigs are suppressed by the market. After digestion, pig prices will continue to rebound seasonally. Breeders must continue to prevent and control major diseases such as African swine fever so as not to miss the rebound of pig prices.” Zhu Zengyong said. (Reporter Huang Junyi)

Source: Economic Daily

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