There is no highest, only higher!
The cold winter of 2023 is not far away, and the fierce competition in 2024 has started again! The two major pig kings of Muyuan and Wen's have successively revealed that the inventory of fertile sows has hit a new high, and the total slaughter volume will exceed 100 million in 2024! In addition, the slaughter volume of New Hope has risen even more, and the sales of live pigs in January have risen by more than 33%! In this situation, can pig prices really reverse in 2024? Under the fierce battle in the pig market, it is not only the farmers who are injured, but the first "thunderstorm" pig enterprise in 2024 has appeared.
Although the pig industry will be tormented in 2023, most of the eliminated will be small pig farms and free-range farmers. But 2024 may be very different, because the debt of many pig enterprises has reached the "thunder point", if the number of pigs remains high and the price of pigs is still low, I am afraid that some listed pig companies will also face the tragic situation of "survival of the fittest".
If pig raising is a marathon, then Muyuan and Wen's two pig kings have successfully rushed in 2024.
According to the announcement of the two major pig companies, Muyuan's latest breeding sow herd is 31290,000 heads, corresponding to the expected growth of about 10% in 2024; Wen's latest breeding sow herd is 1.55 million heads, and the sales goal of pork pigs (including hairy pigs and fresh products) in 2024 is about 30 million to 33 million.
It is estimated that Muyuan and Wen's will slaughter more than 100 million heads in 2024, and the maximum number of heads will reach more than 103 million!
As we all know, the two major pig kings will already lose money in 2023, among which Wen's is the "largest loss" of listed pig companies (pig loss of 5.5-5.8 billion yuan)". So why do the two major pig companies still increase production capacity?
First of all, the first point is that the two major pig enterprises have abundant funds, so the growth of slaughter in 2024 has actually laid the foundation, after all, the breeding sow herd has been steadily rising, so it will not terminate the volume increase target because of a year's loss.
Secondly, the second point is that the cost of the two major pig enterprises is leading, and the average complete cost of pig breeding in Muyuan in 2023 will drop to 15 yuan kg, and the comprehensive cost of Wen's will drop to 163 yuan kg.
The most important thing is that the fundamentals of the national pig ** in 2024 have improved, and the pig price will be better than in 2023 can be basically determined. On the basis of this slight improvement, Muyuan and Wen's have a greater chance to "turn losses into profits".
It can be seen that behind the two pig kings who dare to rush, it is because they themselves are leading. However, based on the industry-wide perspective, this will delay the pace of the reversal of the pig cycle, and even make the pig price profit cycle shorter. After all, the people of the country only need 700 million pigs a year, but only the two major pig enterprises occupy 1 7, which means that the cake of more than a dozen other listed pig enterprises and 20 million farm households in the country is only more than 600 million.
And, won't other pig companies increase production?
In 2023, although all major pig companies are deeply in losses, the gene of "increasing production" is engraved in the bones.
New Hope's latest January sales briefing shows:The company sold 172 live pigs in January 2024480,000 heads, a month-on-month change of 1705%, a year-on-year change of 3359%；The income is 215.9 billion yuan, a month-on-month change of 1798%, a year-on-year change of 527%；The average sales price of commercial pigs is 1330 yuan kg, a month-on-month change of 184%, a year-on-year change of -1068%。
It can be seen that New Hope's pig production capacity has also increased significantly. You must know that New Hope will have a profit of nearly 300 million yuan in 2023, so even if the cost of pig raising of New Hope is slightly higher than that of Muyuan and Wen's, their financial situation can also support them to continue to increase and improve their breeding performance in the increment.
Shennong Group also revealed that the company has 100,000 sows and more than 80,000 sows, and there are two total scales of 2The 40,000-head sow farm is expected to be completed in the first half of 2024, which will allow it to produce 130,000 sows by the end of the year, supporting the group's target of 3.5 million slaughter by 2025. The author interviewed Chairman He Zuxun at the end of 2023 and learned that Shennong Group believes that 10% annual growth is relatively healthy.
In addition,There is also Jin Xinnong selling live pigs in January 2024 13320,000 heads, compared to 5010,000 head increased by 265 times!
Dabeinong hog sales in January 2024Hogs63.50,000 headsCompared to 27 in January 2023680,000 heads, an increase of 229 times!
Obviously, as long as the "healthy business conditions" pig enterprises are still increasing production in 2024, because they will always believe that "pig prices will be better and the cost will be lower this year", especially relying on increasing the full production rate to reduce the average cost per head.
So, what about pig companies that are "not very healthy"?
According to the announcement of Aonong Biotech on February 5, 2024, the company received a notice of consent to pre-reorganization and a decision to appoint a temporary administrator served by the Intermediate People's Court of Zhangzhou City, Fujian Province ("Zhangzhou Intermediate Court"), and the Zhangzhou Intermediate Court decided to initiate a pre-reorganization of the company.
Do you feel "déjà vu" for this scene? Last year's "Zhengbang change of ownership" stemmed from this reorganization.
In addition, Aonong Biotech also announced that it recently received a notice from the company's controlling shareholder Zhangzhou Aonong Investment *** referred to as "Aonong Investment") and the actual controller Wu Youlin that Aonong Investment and Pingtan Tiantian Asset Management negotiated and reached an agreement on the termination of the agreement to transfer the company's shares; Aonong Investment and Wu Youlin decided to terminate their transfer of no more than 152,435,188 shares of the Company by way of transfer by agreement (no more than 175%).
"Selling yourself" seems to have quietly begun, fortunately, Aonong itself is also a leading feed company, at least to ensure that pigs still have feed to eat, and there will be no similar incidents like "starving pigs" in the short term. However, if Aonong does not encounter a major reversal in pig prices in 2024, I am afraid that it will inevitably repeat the mistakes of the past in the end, constantly selling assets to obtain cash support and repay debts.
According to the Financial Associated Press, Aonong Biotech disclosed that the average cost of overall breeding in the first six months of 2023 was 1983 yuan kg, significantly higher than the pig price level**, resulting in a serious cash flow loss in 2023.
So from the perspective of the changes in sows that can reproduce, can the pig price rush to 19 yuan kg in 2024? I'm afraid that in addition to the very temporary high ** due to emotions,The average pig price reached 17 yuan and more than kilogramsIt's very rare。Therefore, it is very urgent for Aonong Biotech to reduce the cost to less than 17 yuan kg as soon as possible!
Moreover, it is not only Aonong Biology that needs to be vigilant, but also many listed pig enterprises whose breeding costs are much higher than 17 yuan per kilogram, and the cost has been declining slowly for more than two years. Once the capital chain is broken, I am afraid that it may not be possible to find a "receiver" like Zhengbang.
All in all, after the large-scale development of pig raising, the "pork cabbage price" has become a basic plate that is difficult to change, so the "pig market fierce war" will eliminate a large number of family farms, and will make the pig enterprises also decide the winner.