According to the principle of "preliminary sow replenishment and inventory determination of long-term hog supply", we have analyzed the structure of the deposits in the previous article. At the same time, a brief analysis of the demand was awakened. The factors affecting pig production in 2009 are now divided into favorable and unfavorable categories for simple summary and analysis.
1, favorable factors
1.1 The chain reaction caused by hog price diving has stopped the growth of sow herds in a timely manner. Chain reaction caused by hog price diving: Decline in profitability of breeding - Poor enthusiasm of commodity piglet restocking - Decreased piglet price - Poor enthusiasm of sow restocking - The growth rate of sow population decreased, while some farmers eliminated mature sows that had poor performance, which greatly reduced the pressure on the surplus of live pigs in 2009.
1.2 The drop in the price of feed raw materials has lowered the cost of live pigs
In the second half of 2008, as the prices of feed ingredients such as corn and soybean meal fell, the cost of live pigs also decreased, which reduced the loss of live pigs.
1.3 Macro policy supports pig production
At the end of 2008, the central government issued 4 trillion yuan of funds to stimulate domestic demand. At the same time, a new land policy was promulgated, and more policies and funds were tilted toward agriculture. As the main body of animal husbandry, the pig-breeding industry may receive greater support at that time.
1.4 Significant increase in risk awareness in large-scale farming areas After the baptism in 2006, 2007 and 2008, a large number of free-ranging households withdrew from the pig-raising industry, and the proportion of large-scale farming increased. At the same time, last year's ultra-high profitability has made the surviving pigland capital grow dramatically, and more new scale farming has mushroomed. Has long been engaged in the pig industry, and after the baptism of scale aquaculture awareness of risk has increased significantly. During the big price hike of pigs that began in May, many pig farms adopted measures to eliminate sows and reduce the number of sows in stock.
2, unfavorable factors
2.1 It is difficult to reduce the amount of “stiffness†in the sow population. The foregoing analysis has analyzed that the sow herd structure is dominated by productive young sows, and it is difficult for forced growers to actively eliminate sows unless there is a long-term deep loss. The capital chain breaks and eventually has to be eliminated. Therefore, the sow herd is "rigid" and it is more difficult to actively drop.
2.2 Migrant workers return home to increase the possibility of return of retail investors The impact of the global financial crisis has affected many coastal enterprises in China. At present, domestic migrant workers have returned home. Due to the lack of a large number of labor-intensive enterprises in the rural areas of the Mainland, the problem of migrant workers returning to their hometowns for re-employment is more prominent. The investment in the pig industry is small, and last year's high pig prices made many farmers taste the sweetness. According to the survey, there have been a lot of responses from migrant workers who want to return to the old industry and continue to engage in pig farming. Before the withdrawal of free-living households, some of them have already been filled up on a scale basis. If retail investors now return, the pressure on the oversupply of live pigs will increase again.
2.3 The macro economy is not optimistic about the shrinking demand Demand is affected by the world financial crisis, China's GDP growth rate has slowed down, unemployment has increased, residents’ purchasing power has declined, and consumers’ willingness to consume has been very cautious. Pork as a “non-host staple†is bound to be affected and demand has been affected. Signs of shrinking. Therefore, under the background that the macro economy is not optimistic in 2009, pork demand will also be affected.
2.4 The strength of farmland/household capital is substantial
The soaring price of pigs in 2007 has made the capital of farms/households significantly enriched. Once the supply of live pigs exceeds demand in 2009, they will lose money. Experience tells us that anyone who can survive the loss period will regain lost ground and usher in a new round of high profit cycle. Therefore, once a loss occurs, the financial strength will determine who is better able to “keepâ€. If everyone’s financial strength is sufficient and they are waiting for others to withdraw, then the 2009 loss period may be very long.
2.5 Sufficient supply of substitutes There is a high possibility of collective diving. In people's daily dietary structure, pork is not a food with high scarcity and low substitution. Poultry meat, poultry eggs, beef and mutton, vegetables, fruits and other foods are undergoing "competition" for consumers' menus. Last year's high pig prices not only increased the scale of raising pigs, but also led to rising prices of poultry and eggs, and increased production scale. Due to the growth cycle, the supply of pork, eggs, poultry, etc. will increase significantly in 2009. The substitution between each other is very likely to lead to collective diving of meat, poultry, eggs and other agricultural products, and they will enter losses together.
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