From the evening of November 6th to November 7th, there were many pig breeding companies such as Muyuan Stock, Zhenghong Technology, Dongrui Stock, Wen's Stock, Lihua Stock, Tangrenshen, Tianbang Stock, etc. The company releases its monthly sales report for October. Monthly report data show that pig prices in October increased by 11% to 13% compared with September. Although pig prices have generally risen, the pig sales revenue of listed companies in October was obviously divided. The specific performance is that the sales revenue of leading companies has increased significantly month-on-month, while companies below the waist have shown a trend of shrinking sales and sales month-on-month.
In this regard, analysts said that excluding the possibility of secondary fattening, the main reason is that the current continuous increase in feed costs has put greater pressure on the operations of enterprises below the waist. These companies can only sell pigs in advance to withdraw funds and make some profit margins for the market. If feed prices continue to rise, it is necessary to consider releasing grain reserves to relieve the difficulties of the majority of pig farmers.
The monthly sales of leading companies increased month-on-month
The October sales monthly report data showed that the average sales price of Muyuan Co., Ltd.’s commercial pigs was 26.05 yuan/kg, a month-on-month increase of 12.97%, achieving sales revenue 14.937 billion yuan, a month-on-month increase of 24.9%. The average sales price of Wen's pigs was 26.69 yuan/kg, a month-on-month increase of 11.72%, and sales revenue was 5.474 billion yuan, a month-on-month increase of 18.69%. Tangrenshen achieved a total pig sales revenue of 594 million yuan, a month-on-month increase of 13.91%. The average sales price of Lihua's pigs was 27.10 yuan/kg, an increase of 11.31% month-on-month, and sales revenue was 174 million yuan, the same as in September.
A staff member of Wen's Co., Ltd. said in a telephone interview with reporters that the company operates steadily and does not hold back sales. According to the requirements of the market regulatory agency, the majority of pigs sold for slaughter are 120 kilogram standard pigs. Pigs of this weight are suitable for direct slaughter in slaughterhouses and are not suitable for secondary fattening by free-range farmers. Staff from Muyuan Co., Ltd., Lihua Co., Ltd., and Tangrenshen also expressed similar views.
Mao Tengjiang, chief researcher of Tengjiang Investment, analyzed in an interview with reporters on November 8 that judging from monthly report data, the operating efficiency of leading companies in the pig sector is better and they can seize the current rise in the pig spot market. Business opportunities, actively increase sales, maintain stable expectations of the consumer market, and also create value for shareholders.
ensp;Shrinking companies may be affected by feed cost pressure
The reporter noticed that in addition to the above-mentioned companies, there are also many companies whose monthly sales reports show that the number of pigs slaughtered has dropped sharply month-on-month, and sales The revenue has shrunk significantly month-on-month. Are there problems in this type of enterprises that are reluctant to sell and do secondary fattening?
The reporter called three companies whose production volume and sales have shrunk month-on-month. They all expressed their unwillingness to be interviewed and said that the month-on-month shrinkage was mainly due to production planning arrangements.
In this regard, Mao Tengjiang analyzed the companies that have shrunk. The companies that have shrunk in slaughter volume and sales are mainly companies below the waist in the pig sector. They have a history of large debts, small business scale, tight cash flow, etc. The problem, as reflected in the third quarter financial statements, is that it has reduced its losses from the previous quarter but has not yet made a profit, and there is still great pressure on operations. If this kind of "shrinking" enterprise is betting on the future market, engaging in secondary fattening and holding back sales, it is a very unwise behavior. The current monthly contracts of pig futures have been inverted, and investors in the futures market are bearish on future pig prices. By the time the above-mentioned companies put their secondary fattening pigs on the market, they may have missed the opportunity to turn around. I tend to believe that the above-mentioned "shrinking" enterprises are more likely to sell pigs in advance and give up part of the market profits for other pig breeding enterprises. Actively collect cash flow by selling stocks in advance.
Li Binbin, a big data analyst at Huinong.com, expressed support for the above point of view. He analyzed the causes of the shrinkage and said: Since this year, major feed mills have raised pig feed prices as many as 13 times in a row, which has affected downstream pigs. Breeding enterprises pose certain operating pressure. Pig breeding enterprises with an excessively high feed-to-meat ratio have been calculated and found to be unprofitable and even at risk of losses. They can only decisively reduce the scale of breeding and sell pigs for slaughter in advance to cut off losses and retain funds.
He added that the increase in feed prices is due to factors such as high temperature and drought weather, as well as monetary policy, epidemic prevention and control, geopolitical conflicts, energy shortages and other factors. The intertwined influence of multiple factors is difficult to subside in the short term. This is a big test for the entire pig sector. The leading enterprises in the pig sector have advanced breeding technology, efficient management, and open up the upstream and downstream industrial chains. When faced with challenges, the operations of leading companies are more resilient, which is reflected in the market pattern of 'survival of the fittest, and the strong will remain strong'. This is the main reason for the divergence of pig sales revenue in October among listed pig companies.
Li Binbin said: Although the leading companies in the pig sector are always strong, the pig breeding industry is an industry with highly dispersed production capacity and is closely related to people's livelihood and employment. Feed prices remain high, and the pressure will be passed from the feed end to the consumer end. It is recommended to consider gradually releasing the national grain reserves and putting them on the feed market to relieve the operating pressure of the majority of farmers.