The game between supply and demand is still continuing. How will pork prices go in the future?
In terms of pig production, with the continuous growth of fertile sows, the supply of pork market improved significantly, and the price of pork fluctuated downward.
According to the monitoring of the Ministry of agriculture and rural areas, 39.5 million sows could be bred in October, an increase of 32% over the same period last year; 387 million sows were on hand, an increase of 27% over the same period last year. At present, pig production capacity has recovered to about 88% at the end of 2017. According to this trend, in the second quarter of next year, the national pig inventory will basically return to the level of normal years.
With the release of new pig production capacity in the early stage, Chinas pork market supply improved significantly, and the price fluctuated downward. Since September, the price of pork has dropped for more than two consecutive months. According to the Bureau of statistics, the price of live pigs fell 1% month on month in mid November.
On the future trend of pig price, Anxin securities research paper believes that downstream demand and pig supply are restored, and the game between supply and demand is still continuing. Although there is not much room for pig price to rise, the probability of a sharp fall is also small. With the gradual decline of temperature, pork consumption is about to enter the peak consumption season in the past year, and the demand for pickled meat in southern China is gradually opening, and the demand for pork in the fourth quarter is expected to improve.
Based on the analysis of pig supply and demand in the three months before the Spring Festival, the increase of pig demand is expected to significantly exceed the increase of supply from November 2020 to January 2021, and the rise of pig price is expected to continue. It is recommended by the company that it will continue to invest in the agriculture and fishery industry.
Guotai Junan research paper points out that this round of cycle brings huge profits to the industry, but it also raises the break even line of the industry. The production capacity of breeding pigs will be the decisive factor to determine the current profitability and future viability of the pig breeding industry. With the gradual decline of pig price, it is only a matter of time for large-scale farms without the ability to provide piglets by themselves and the losses of individual farmers. After the waves have washed sand, the top enterprises that can survive in the bottom of the industry are the head enterprises that retain their own breeding farms and have excellent cost control ability. In the future, we will continue to pay attention to the breeding growth stocks with high efficiency and good cost control ability in the process of large-scale cultivation. In the long run, the concentration of the pig industry has been improved. From the perspective of growth, it is recommended that the pig industry, including muyuan shares, new hope, Zhengbang technology, Wenshi shares, DaBeiNong, Tiankang biology, etc.