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国泰君安:能繁母猪产能连续下降 周期反转渐近

Guotai Junan: Production capacity for breeding sows continues to decline, and the cycle reversal is getting closer

Zhitong Finance ·  11/28/2023 07:15

According to monitoring data from the Ministry of Agriculture and Rural Affairs, at the end of October 2023, the number of sows capable of breeding nationwide was 42.1 million, or 102.7% of the normal stock of 41 million heads. There has been a correction for 10 consecutive months. Pig prices are not strong during the peak season, production capacity continues to decline, and the cycle reversal is getting closer.

The Zhitong Finance App learned that Guotai Junan published a research report saying that, according to monitoring data from the Ministry of Agriculture and Rural Affairs, the number of sows that can breed nationwide at the end of October 2023 was 42.1 million, or 102.7% of the normal stock of 41 million heads. It has been declining for 10 consecutive months. Pig prices are not strong during the peak season, production capacity continues to decline, and the cycle reversal is getting closer.

Poor peak season, declining production capacity

Pig prices are expected to be weak in 2023Q4, and the sustainability of removal exceeds expectations. Guotai Junan believes that the high level of supply comes from the following points:

1) Resurgence of sell-off: The anti-seasonal decline in pig weight is worth paying attention to. Combined with the comprehensive price of piglets, sows, etc., the industry may be interpreting a sell-off. Pessimistic price expectations are the main cause, and the impact of swine disease has also been boosted to a certain extent.

2) Increased supply of frozen meat, elimination of sows, etc.: Currently, the price of eliminated sows is 50-60% of pig prices, and the storage ratio of frozen products is 21%, which is at a historically high level, all of which have increased supply pressure a few years ago.

Guotai Junan believes that due to factors such as the sell-off of listed pigs, elimination of sows, and frozen meat stocks, etc., all increasing supply pressure, pig prices are expected to be weak during the 2023Q4 peak season, and the sustainability of production capacity removal exceeds expectations.

Production capacity continues to decline, cycle reversal is getting closer

Third-party data and official data such as Yongyi Consulting show that data on breeding sows has been declining continuously since December 2022 or January 2023, and has now declined continuously for 10 months. Looking back, Guotai Junan expects 2024Q1 to still be the quarter where the industry lost production capacity. Coupled with the decline in production capacity from 2021 to 2022, the next cycle of continuous decline in production capacity is approaching.

Risk warning: epidemic risk, livestock price fluctuation risk, raw material price fluctuation risk, etc.

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