For this kind of voice in the market, there are different opinions in the industry at present. Bian Xiao believes that opinions are mainly divided into three categories:
1. Industry organization: It still belongs to the end of the pig cycle. Generally speaking, the second quarter is the off-season of pig market consumption, and the output of farmers will decrease accordingly. The recent rebound in pig prices is a short-term mismatch between supply and demand, which conforms to the seasonal law of the pig market and cannot be used as the main reference for putting pig production capacity in place. In addition, the number of fertile sows is still 4 1.77 million, which is still 770,000 more than the maximum set by the government. Obviously, the production capacity has not been completely reduced, and leading companies are still expanding to increase market share. Although the loss of raising pigs has been large since last year, the production capacity has not been significantly reduced.
Second, the expert team: the pig price has entered the rising channel, and a new round of pig cycle has started. Zhu Zengyong, chief analyst of the monitoring and early warning of the whole pork industry chain of the Ministry of Agriculture and Rural Affairs, believes that the trough stage of two rounds of pig prices can be defined as a complete pig cycle, so as of March 2022, the last round of pig cycle has ended and a new round of pig cycle has begun. From the second half of this year to the first half of next year, the whole industry will be in a state of low profit.
Third, the scale of pig enterprises: more optimistic about the market in the second half of the year. For people who really raise pigs, they are more concerned about the trend of the market. At present, large pig farms are generally optimistic about the market in the second half of the year, especially in the peak consumption season in the fourth quarter. However, for the de-capacity, large pig enterprises believe that it will take some time, at least until the third quarter before they really enter a new cycle.
For the above differences, Bian Xiao thinks he still agrees with the view that the cycle is over. The price of live pigs is determined by market supply and demand, which may lead to a rapid increase in pig prices in a short period of time due to various factors. However, from the perspective of big data, especially sows, it still needs to be further lowered. Judging from the consumption situation in the market outlook, the pig price may continue to fluctuate for some time.
Do you think the new pig cycle has begun?