Visual China.
Blue Whale Finance Zhang Jinglun.
2023 is undoubtedly a "cold winter" for pig and cattle breeding enterprises, from large-scale factories to free-range farmers, in the past year, it is difficult to escape the business situation of large losses.
On February 1, Tianbang Food responded to the 2023 performance on the interactive platform, saying that the company expects the loss in the fourth quarter of 2023 to increase compared with the first three quarters, mainly due to the serious epidemic in Anhui, Shandong and other production areas, and the company to accelerate the slaughter of commercial pigs and piglets for disease prevention and other reasons. The pig price in the fourth quarter was low, and the weight of the slaughtered commercial pigs did not reach the ideal level, and the cost was high, resulting in a loss in the breeding sector in the fourth quarter. In January 2024, the company's main breeding indicators have basically returned to normal levels.
In fact, not only Tianbang Food, judging from the performance forecasts released by pig and cattle breeding enterprises such as Muyuan Shares, New Hope, and Tang Renshen, in the context of the continuous downturn and the annual volume increase and price decline, the general performance in 2023 is expected to be lost.
For animal husbandry, it is no longer a question of earning more or less, but a matter of life and death. Gao Hongbin, honorary president of the China Dairy Association, commented publicly.
How should the aquaculture industry survive in the new year?
The performance of breeding enterprises is generally lost
Looking back on 2023, domestic raw milk and pigs will mostly show weak operation.
According to the data of the Animal Husbandry and Veterinary Bureau of the Ministry of Agriculture, according to the monitoring of 500 county fairs and collection points across the country, in the first week of January 2024, the average fresh milk in 10 major producing provinces such as Inner Mongolia and Hebei was **366 yuan kg, a year-on-year increase of **112%。In the first week of January 2023, the figure was 412 yuan kg, raw milk** has been declining throughout 2023.
Looking back at the performance of pig prices (foreign three-yuan pigs) in 2023, it quickly fell below 15 yuan kg after the Spring Festival, and fell again after a slight **, which did not exceed 15 yuan kg in the entire second quarter, and fell below 14 yuan kg in early July; Since August, pig prices have been affected by the rainy season, storage and other factors into the duration of about 2 months, the most close to 18 yuan kg, the whole industry is in a short period of profitability. Since the fourth quarter, pig prices have fallen, hitting the lowest price of the year at 13 on December 971 yuan kg.
Under the cold winter, the loss of breeding enterprises has become the norm.
In the first half of 2023, profits will generally decline in upstream dairy enterprises, including Youran Dairy, Modern Dairy, China Shengmu, and Original Ecological Dairy. Youran Dairy had a net loss of 9 in the first half of the year500 million to 10300 million yuan, with a profit of 2 in the same period in 2022$1.9 billion; Modern Dairy expects a net profit of between 200 million yuan and 2200 million yuan, a year-on-year decrease of about 57%-61%; China Shengmu expects a net profit of 20 million yuan to 24 million yuan, a year-on-year decrease of about 89%-91%; The net loss of the original animal husbandry was 2600 million to 2800 million yuan, compared with a net profit of 52.7 million yuan in the same period last year.
Looking at pig enterprises again, the three giants of pig breeding are generally losing money.
Muyuan shares on January 30 (002714SZ) released its 2023 annual performance forecast, expecting a net profit loss attributable to the parent company of 3.9 billion yuan to 4.7 billion yuan in 2023, compared with a profit of 132 in the same period last year6.6 billion yuan.
Wen's shares released the 2023 annual performance forecast on January 31. In 2023, the net profit attributable to shareholders of listed companies of Wen's shares is expected to lose 6 billion yuan to 6.5 billion yuan, compared with a profit of 52 in the same period last year$8.9 billion.
New Hope released a performance forecast on January 30, and it is expected to deduct a non-net profit loss of 4.5 billion yuan in 2023. New Hope said that affected by the decline in pig sales, the loss of the pig industry is the main reason for the non-net profit loss in the current period.
The pig and cattle breeding industry "increased in volume and fell in price".
The large losses of pig and cattle breeding enterprises are undoubtedly closely related to the continued downturn in the market last year.
From the perspective of supply and demand, the abundant production capacity and oversupply may be the main reasons for the downturn in the pig and cattle breeding industry.
In the dairy farming industry, due to the weak consumption of domestic dairy products and the accelerated expansion of the domestic raw milk industry in the past two years, the balance between supply and demand of raw milk has been broken from the end of 2022 to the first half of 2023, and small and medium-sized ranches are once again facing the dilemma of "killing cattle" and withdrawing.
In the pig industry, the number of listed pig enterprises slaughtered in 2023 will increase year-on-year. According to the National Bureau of Statistics, the annual pork output was 57.94 million tons, an increase of 4 over the previous year6%, the highest level since 2015. Judging from the sales data released by pig breeding enterprises, the slaughter volume of Muyuan shares, Wen's shares, and New Hope in 2023 will be 6381 respectively60,000 heads, 2,626220,000 heads, 1768240,000 heads.
On the other hand, the rising cost of feeding is also squeezing farmers' profit margins. According to the data of the Ministry of Agriculture and Rural Affairs, in 2023, China's soybean meal and corn will continue to run at a high level, and the average price will increase by 4 compared with the semi-annual increase in 20228% and 14%。According to data from the Ministry of Agriculture and Rural Affairs, as of January 26, 2024, the average spot transaction price of soybean meal in China was 3,452 yuan; In terms of corn, in the third week of January this year, the national average of corn was **270 yuan kg, ** still remains high.
In general, feed costs account for about 65% to 70% of the cost of dairy farming and 60%-70% of the cost of pig farming. Industry insiders said that at present, large-scale farms without debt generally produce a kilogram of milk at a cost of 3About 8 yuan kg, under the current milk price level, in addition to the top 20% to 30% of the industry's pastures with a particularly high production level, as well as the pastures with superior resource capacity, it is not easy for other ranches not to lose money.
How the industry should get out of trouble
It is worth mentioning that as the Spring Festival approaches, raw milk has not shown a trend. According to the data of the Ministry of Agriculture and Rural Affairs, the monitoring of 500 county bazaars and collection points across the country showed that in the fourth week of January (the collection date was January 24), the average fresh milk in 10 major producing provinces such as Inner Mongolia and Hebei was **364 yuan kg, compared with the previous week**0.3%, year-on-year **110%。
However, the hog ** showed a significant rebound pattern. According to data from Sopig.com, the national average price was as low as 13 on January 15After 48 yuan kg, the pig price opened rapidly, and by January 31, the national average price had come to 1566 yuan kg, compared with 14 in the same period last year16 yuan kilogram ** 15 yuan kg, a year-on-year increase of 1059%。
Li Wenxu, an analyst at the business club, said that from the annual comparison, it can be seen that the domestic pig price in 2023 will be at a low level in the past three years. At present, the overall domestic pig inventory is still at a high level, and the pig market continues to be high, or the pig price is suppressed to a certain extent, but the pig price has been at the bottom, and the space is limited.
In addition, Tianbang Food, a listed pig company, said on the interactive platform that the company expects the loss in the fourth quarter of 2023 to increase compared with the first three quarters. However, in January 2024, the company's main breeding indicators have basically returned to normal levels.
After the holiday, it is the off-season for traditional meat demand, and live pigs may be under weak pressure. Lei Liugong, director of the Department of Market and Information Technology of the Ministry of Agriculture and Rural Affairs, said at a press conference of the State Council Information Office on January 23 that the current pig market is still relatively loose, and pig breeding is likely to continue to lose money after the Spring Festival. With the pig production capacity gradually reaching a reasonable level, the pig market situation in the second quarter is expected to be better than the same period last year.
For small and medium-sized farmers, the quickest way to alleviate losses is to reduce the number of stocks. A farmer from Inner Mongolia told the Blue Whale financial reporter, "We are eliminating a group of old, sick and weak cattle to achieve the purpose of reducing feeding costs, and then consider expanding the scale when the first improves." ”
Jiang Han believes that breeding enterprises need to adjust the breeding structure, according to market demand and changes, increase or decrease the number of certain breeding species in a timely manner, maintain a reasonable amount of stock, and avoid excessive expansion or reduction. This helps to reduce production costs and risks, and increases profitability.
Cost is also one of the important factors in determining profits. With the production cost of feed, veterinary drugs, etc., the cost of breeding is gradually increasing.
Industry insiders suggest that breeding enterprises need to strengthen production management, through strengthening feeding management, optimizing feed formula, improving production efficiency and other measures to reduce production costs, improve product quality and added value. This helps to improve the competitiveness and market share of the enterprise.
In addition, actively expanding sales channels is also an effective strategy to cope with market changes. "By cooperating with slaughtering and processing enterprises, carrying out online and offline sales, etc., we will improve product visibility and market share. This helps to expand market share and increase sales revenue, increasing the profitability of the business. Jiang Han said.
As for the prospects of the aquaculture industry in 2024. Jiang Han believes that with the improvement of people's living standards and the upgrading of consumption structure, the demand for high-quality, green and healthy aquaculture products is increasing, which provides a broad market space for the development of the aquaculture industry.