Feed rose 150 yuan/ton! Some households stop loss and leave the market.

The peak season is not prosperous. Pig prices are down again. The attitude of retail farmers and listed companies is two days.

Near the Mid-Autumn National Day, this should be the peak season for pork consumption. However, pig prices continue to decline, pig futures prices have been falling, and the pig industry has failed to usher in the long-awaited peak season rebound window.

The "Securities Daily" reporter learned through various interviews that the peak season is not prosperous, superimposed on unfavorable factors such as feed price increases and large fat pressure, and some free-range farmers have processed live pigs into bacon in advance in an attempt to reduce losses. Capital markets are also cautious about the downward phase of the pig cycle, believing that the current market has not yet bottomed out. Correspondingly, listed companies such as Tang Renshen are actively planning to expand production, believing that the pig cycle is inevitable. Only by controlling costs and managing them well can they safely pass the bottom of the market and usher in the highlight of the market.

The adjustment range has been deep and the cycle has not yet bottomed out.

"The adjustment is enough, but the adjustment time is not enough." A private equity fund manager told the "Securities Daily" reporter his views, "At present, the pig-to-food ratio has fallen below 5, and some areas have fallen to 4.3, with a head loss as high as 900 yuan. This adjustment range is in any previous pig cycle., Is a great bottoming signal. However, the downward phase of the pig cycle is generally 25 months, the short downward cycle is 20 months, and the long downward cycle is 31 months. At present, since the decline in April, only in the past four months, the adjustment time is far from enough, do not rule out the possibility of a new low, we remain on the sidelines."

Since September, the main pig futures contract has fallen from 17237 yuan per ton to 16000 yuan per ton, a drop of 7.17 per cent. The above-mentioned private equity fund manager said: "Pig farming is a market with scattered production capacity and rigid demand, and the market structure determines that the help up and help down will occur from time to time. From the market we track, the pig cycle has a trend of accelerating divergence in recent years, not only the bottom is lower, but also the peak is higher, the cycle is also lengthening."

Pig prices fell, feed prices rose, free-range farmers stopped and left the market.

Not only is the capital market bearish on the pig industry, but also free-range farmers have shifted from wait-and-see to stop-loss departure. Liu Yiyou, a big pig farmer, has contacted the local bacon workshop and is ready to treat the big fat pressed into bacon at one time, hoping to reduce feed, water, electricity and labor costs. Recently, the price of feed has risen sharply, and the price of superimposed pigs has continued to fall, which has put greater pressure on scattered farmers. Liu Yiyou to the "Securities Daily" reporter calculated an account: "big fat pressure bar** uneconomical, high temperatures easily lead to disease, loss is very large, feed consumption is also an expense. South pig corn needs to be supplied from the north, logistics costs are also an expense. Maybe the northern corn belt pig will be slightly better."

However, what he thought of as "good" did not happen. On the contrary, on September 7, the domestic feed industry ushered in a wave of "general tide". New Hope, Zhengbang Technology, and Tongwei shares have successively issued price increase notices, involving multiple product lines such as concentrated materials and suckling pig materials, with an increase of between 50 yuan and 150 yuan per ton. Caixin Futures analyst Hu Shiyao told the Securities Daily reporter: "U.S. corn and soybean futures are running at relatively high historical levels, coupled with high shipping logistics costs, the global supply chain is not running smoothly, the downstream feed costs have an upward impact, feed mills will inevitably transmit cost pressure to the downstream. From our observation, the recovery of global consumption is earlier than the recovery of agriculture and logistics industry, the demand for food and feed has rebounded strongly, and the transmission effect of feed cost pressure is likely to continue into next year and even the following year."

Brave Embrace Cycle and Practice Internal Management Skills

The capital market is bearish on the market, with free-range households stopping losses and leaving the market, while listed companies are bucking the trend. On the evening of September 1, Tang Renshen announced that as of August 31, 2021, about 7.15 million shares of the company were repurchased through centralized bidding through the special securities account for share repurchase, accounting for 0.59 of the company's current total share capital. The transaction price was 7.33 yuan/share, the transaction price was 5.65 yuan/share, and the transaction amount was about 45.35 million yuan. Tang Renshen said that he continued to recognize the company's intrinsic value and was optimistic about the subsequent development prospects, so he increased his repurchase of shares in the secondary market.

On the evening of September 6, Tang Renshen announced that in order to optimize the allocation of resources, integrate the industrial resources in Guangdong Province, and expand the industrial scale, the company plans to invest in the establishment of Guangdong Tang Renshen Industrial Development Co., Ltd. (tentative name), with a registered capital of 0.2 billion yuan, and the company holds 100% of its equity.

In addition to Tang Renshen, new hope, Tianbang shares, Zhengbang technology and other pig raising enterprises have stepped in to increase their shares, optimistic about the future development prospects of the industry and the company, and expressed confidence and positive attitude to the market. As of August 31, New Hope had repurchased about 10.01 million shares, accounting for 0.2224 of the company's total share capital, with a total transaction amount of 0.229 billion yuan. Tianbang shares plan to increase their holdings by 0.1 billion yuan to 0.15 billion yuan by the chairman and other executives, which will be completed within 6 months from May 24, 2021. Zhengbang Technology Company has repurchased 38.58 million shares, accounting for 1.23 of the company's total share capital, with a total repurchase amount of 0.495 billion yuan. In addition, New Hope, Wen's shares and other listed companies in * * nearly two months to accept institutional research, all believe that the pig industry as a typical entity operation, should focus on the long-term, lay a good foundation to practice internal skills, can not only pursue short-term financial indicators, more can not only care about the immediate gains and losses, can usher in the market highlight moment.

Sun Shuangsheng, the secretary of the Tang Dynasty, told the "Securities Daily" reporter: "The Tang Dynasty has been raising pigs for more than 30 years since 1990. We went through multiple pig cycles. Personally, I think that pig-raising enterprises should not be afraid of the pig cycle. Enterprises cannot control the fluctuation of pig prices, but they can practice their internal skills, reduce costs and improve labor efficiency. The second is not to hide, to be confident and ready to meet the peak of the pig cycle, to earn more money than others when the market is good, and at the bottom of the cycle, when everyone is not confident, we should do a good job in the company's production and operation management, enhance the ability and confidence of employees, step through the bottom of the market, and usher in the market boom cycle."