Qingming, May Day, the deep-seated reasons for the price of live pigs “do not rise and fall”, do farmers know?
Source: Knowing Editing / Poker Investor Wen / Fu Guangdong
The gradual adjustment of national policies, capital intervention, changes in consumption structure, improvement in production levels, environmental protection and other factors have all implied that the pig-raising era of relying on investment for profiteering has become a thing of the past. In the next 10 years, China’s pig industry will gradually To mature.
For a person who has been working for many years and is preparing to raise pigs as a career, "What kind of development model will China's pig industry enter?" is a heavy topic because the results are not optimistic, and the industry is understood and made. There are not many people thinking, but I really hope that it will lead to discussion. I am worried that my worry is just worrying.
Although this topic is difficult for me to control! I think it will be affected by several factors:
1 The gradual adjustment of national policies and the multiple pains of the pig industry have determined that the pig industry in China will rapidly mature.
From December 30, 1996, the "Decision of the State Council on Effectively Reducing the Burden of Farmers" began in 1998, China's agricultural development has entered a new stage. To ease the burden on farmers and protect rural productivity, the central government first proposed "to insist more." Give less, let the farmers get more affordable ideas. In 2003, on the basis of completing the pilot work of tax and fee reform, the agricultural tax rate was gradually reduced, and the burden on farmers was effectively reduced.
By removing the restrictive regulations on peasants' employment in cities, the urban and rural labor market will be gradually unified; the reform of the household registration system will be deepened to promote urban-rural integration. After canceling the urban-rural restrictions, farmers do not have to pay the public grain, the farmers' farming is reduced, the rural pigs are gradually decreasing, and the large-scale pig farms are gradually being rolled out. The acceleration of large-scale pig raising should be around 2005 and 2006. The pace of development is the same (I think Wen is the best for homeopathy). In 2006 and 2010, the epidemic raged and caused a decline in production in 2007 and 2011, which forced large-scale reshuffling of large-scale farming models, investment methods, and investors.
When Professor Lang Xianping began to talk about the dual economic system and talked about the deterioration of the investment environment, the source channels for raising pig capital became diversified. The state-owned giants, real estate developers, IT companies, and international investment banks with the word “中” began to enter the market. In the pig industry, the phenomenon that the industry believes that the three-year cycle has become increasingly blurred and difficult to predict. The era of speculative profiteering has passed. Especially after the implementation of the new Environmental Protection Law on January 1, 2015, the pig industry began to become a more socially responsible enterprise and began to improve itself. The capital market and investment model began to return. reason. The next 10 years will be an important period for China's pig industry to gradually mature.
2 The adjustment of future consumption structure will lead to the continuous decline of the number of live pigs
China is a big pork producer and a big consumer. On January 20, 2015, the National Bureau of Statistics announced that the year-end stock of pigs in 2014 was 46.583 million heads, down 1.7% year-on-year in 2013. In 2014, the number of live pigs reached 73.51 million. Head, an increase of 2.7% over the same period of 2013. What is the per capita consumption? In 2014, the output of pig, beef, sheep and poultry was 85.4 million tons, an increase of 2.0% over the previous year, of which the output of pork was 56.71 million tons, an increase of 3.2%. According to the data released by the National Bureau of Statistics in 2014, the population of mainland China is 1,367.8 million. If the import and export volume of domestic pork and chop is neglected, the per capita meat production in 2014 is 62.43 kg, of which the per capita pork production is 41.46 kg.
In February 2014, the General Office of the State Council issued the "China Food and Nutrition Development Program (2014-2020)" to clarify the food consumption target. By 2020, the national per capita annual ration consumption of 135 kg, meat 29 kg, fruit 60 kg . Along with people's emphasis on healthy eating, people's demand for cattle, sheep and fish will inevitably increase. The demand for pork will inevitably decline, and how much will it fall? If we consider the Chinese people's habit of eating pork, the proportion of pork consumption is 60%. To calculate, per capita pork consumption is about 18 kilograms. In 2020, China's population reached 1.45 billion, and pork demand was only 24.62 million tons, down more than half. According to the current standard, each pig produces 77kg of meat, so the annual output will drop from the current 73.01 million heads to 319.15 million heads.
At the end of 2014, the number of sows was about 43 million. Although I have no objection to the pigs that provide about 17 pigs in the year of 2014, the number of sows is gradually reduced, and the efficiency is a big trend. If the level of the US is reached in 2009, 20.56, then in 2020, we may only need 15.52 million sows, and the future body mass will be higher than the current standard of more than 90kg, then it may only need 13.3 million heads, which is equivalent to a 70% decline in sows. A large number of uncompetitive pig farms began to close gradually. Of course, this is only an ideal algorithm. It may not fall so fast in 2020, but this is the general trend. The situation of the pig industry is not optimistic.
3 The gradual improvement of people's living standards will lead to a gradual change in production methods.
China's complex topographical structure has created the world's largest variety of local breeds. According to the 1986 China Pig Variety and the Food and Agriculture Organization of the United Nations (FAO), there are 48 local pig breeds in China. China is the world's most abundant pig breed, accounting for 34% of the world's pig breeds.
Although local pigs have many excellent qualities, the biggest problem is economic benefits. In the era of pork and food, due to the market's excessive pursuit of high lean meat rate and economic interests, most of the large-scale pig farms are specialized in commercialization, and local pigs are either crossed and improved. Either being squeezed into a remote mountain village, the Chinese people's preference for soil pork has been delayed. Although the "white pork black pig skin" variety has been developed, there is no real use of local varieties.
At present, the amount of live pigs is basically close to the peak. In the next 10 years, people's demand for pork is definitely better and better. If you want to use the current taste of fast pigs (chicken) to meet market demand, become the mainstream of the market, profit. Space is definitely not going to go anywhere. I believe that the current high-density, high-intensive production methods are continuing and becoming mainstream. It may be the market demand for pork in the developing countries of the world. How to protect and develop local varieties and develop personalized market needs. Achieving a healthy, green, organic and environmentally friendly feeding model is definitely a big direction in the future and a major trend.
4 Feeding diet structure, environmental protection and consumption area determine the scale and layout adjustment of the farm
Since the beginning of pig breeding, corn-soybean-type diets have become mainstream, but China's forage corn and soybean meal are not self-sufficient and dependent on imports. In 2014, the national corn output was 215.763 million tons, and the total domestic consumption was 189 million tons, of which feed consumption was 117 million tons, an increase of 4.5 million tons from the previous year. It is estimated that 2.7 million tons of imported corn will be imported. In 2014, China’s total soybean imports were 7140. Ten thousand tons, an increase of 12.7% year-on-year, while domestic production is only 12 million tons.
When China's pig raw materials begin to rely on imports, and the land that pollutes China continues, and it is tax-free, this should not be a government that the developing government is willing to see. In the future market, the government should dominate the diversification of feed diet structure, the development and effective use of regional feed resources. This direction should be more compatible with the development and utilization of local pigs, thus driving the pig breeding model to new environmental protection and health. And ecological development.
Regardless of how the environmental protection achieves zero emission and compliance discharge after 15 years, how to plan the no-guard zone, the best way to treat pig waste is always to use it. Returning to the field means that each farm must have a land area that can be absorbed. If the scale is too large and too concentrated, it means that the cost of the manure disposal of the farm should be increased. In the face of gradual rational farming profits in the future, the increase in cost means losing the advantage. China's flat northern grain-producing regions are not like the United States, failing to concentrate on China's largest pig-raising group. China has a complex topography and dense population. How to effectively deploy and establish a foothold in the local conditions will be a problem that pig farmers must face in the future.
5 China's economic growth rate has dropped to 7%, and the profits of pigs related to the national economy and the people's livelihood must return to rationality.
As an important part of the consumer price index (CPI), meat consumption, whether in developed countries or developing countries, controls the proportion of CPI, which is a major event concerning the national economy and people's livelihood. Pig raising under the subsistence line of pork (fast pigs) is impossible to continue to make money, and must rely on industrial back-feeding and government subsidies. This is an inevitable trend in the development of industrialized society. China's economic growth rate is expected to fall to 7%, and it will fall. The profit margin of commodity pigs may be as high as 100~200 yuan/head. In recent years, the return on capital may remain around 10%~15%. In the past ten years, the construction cost of traditional pig farms has been around 250~400 yuan/m2. After catching the market for three years, it has returned to the capital, and the return on capital is as high as 30%.
But in the next few years, with the continuous integration of national policies, regulations and industries, the golden age of developing pigs will never return. At present, the newly invested 100,000 pig farms (5,000 sows) with new investment, the construction area + environmental auxiliary facilities may reach 70,000 m2, the investment is about 210 million, and the unit construction area cost is as high as 2,500~3,000 yuan/m2. If it is only a commodity market, the return on capital is only 6%-11%. As China's industrialization process intensifies, the return on capital may be even lower, and even start to lose money. Therefore, I always feel that the labor-intensive animal husbandry industry has different purposes for government intervention in countries with different factor endowments.
The United States subsidizes animal husbandry because its factor endowment structure is rich in capital and labor, and the livestock industry is not competitive in an open and competitive market. The subsidy for China's animal husbandry is because policy makers believe that the technology of developed countries is good. In the case of the lack of funds and labor in the case of the factor endowment structure that violates China, it is hoped that its producers will choose American technology in an open competitive market. I think this is an advancement in the industry, which leads to the company's inability to make a profit. The company has no viability, so the government must protect and support it. Once the government does not support it, livestock production will automatically adapt to China's factor endowment structure, so a large number of capital-intensive pig farms will close down due to high production costs... So I think how to follow the changes in China's factor endowment structure and gradually adjust the business model However, it is not far behind, and it will be crucial in the next decade.
Competition between the six farms will intensify
There is basically no profit margin for binary breeding pigs, and the original seed farm is facing integration. Large-scale breeding companies and pig farm management service companies will gradually emerge.
The State Council's "Opinions on Accelerating the Development of Modern Crop Seed Industry" for the first time clarified the strategic position of the seed industry. The public has an urgent desire for the development of the seed industry, but China is still only a long-established animal husbandry country, not a strong country.
Large-scale farming began soon (not the individual level depends on the group level). For highly commercialized and intensive farming, no matter the technology, management, and concept are relatively backward, at this stage, it is not necessary to introduce high-tech, The selection and improvement of high-input commercial varieties is equivalent to implementing the catch-up strategy of breeding under the current factor endowment conditions in China. If the enterprises are forced to produce products that do not conform to the characteristics of factor endowment, the adoption of non-conformity endowment structure The technology must then deviate from the optimal structural level of the enterprise in an open competitive environment. If the protection and subsidies given by the government are not enough, then the breeding enterprises that implement the catch-up strategy will fail in the open competition market without viability. (Similar to the weak economic foundations of the 1950s and 1960s, a series of problems caused by the development of heavy industry in the United Kingdom.)
There is statistics in economics, the cost of introducing new technology patents will not exceed 30% of the cost of the original research, and the introduction of excellent populations should be far below 30%. However, it is impossible for the take-up to continue. The next 10 years is an important period for the pig company from “takenism” to “foreign use” to “independent cultivation” because of the low return on capital of 6%-11% of commercial pigs. It will inevitably lead to the integration and upgrading of breeding companies and breeding service companies to seize the breeding pig market.
The profit margin of purebred pigs should be 1000-2000 yuan/head, and an investment of 210 million 100,000 original seed farms. If 30% of the breeding pigs can be sold, the return on capital can be as high as 20~40%, but how In order to sell pigs and stabilize the customer base, we will rely entirely on powerful technical teams to develop breeding pigs with high market fit, use a strong after-sales service team to stabilize the customer base, and integrate upstream feed and midstream commercial pigs from the enterprise level. In the downstream slaughtering and processing and market, improve the entire industrial chain and establish strategic alliances to achieve a stable win-win situation. In the next 10 years, livestock companies must position themselves to survive.
7 The change of factor endowment structure in China in the next decade determines that it is difficult for pig farms to achieve complete mechanization.
Although 2010 is the turning point of Lewis, the demographic dividend is coming to an end, but the base of China's 1.3 billion population, no matter how the factor endowment structure changes, the labor force should always have a surplus, the more advanced the farm, the viability of the future in an open competitive environment. The worse, especially for commodity pigs with low return on capital. Human-computer mutual assistance and local conditions can maximize social benefits. The government hopes that enterprises will assume social responsibilities, arrange peasant employment, promote rural economic development, no taxes, no fiscal revenue, then there must be social benefits. If even the most traditional pig production can achieve high-end atmospheric grades, I think this is not It is in line with the vested interests of the government and does not conform to the current rate of change in the factor endowment structure.
Since the labor force should always have a surplus, but there is a phenomenon of finding people difficult, I think because the current performance-oriented, leading to the construction of international metropolises, a large number of migrant workers in the country to build basic construction, and other infrastructure construction Almost, the real estate fever slowly declined, the concentrated development of the city turned to satellite cities, the construction of rural infrastructure began, the rural development gradually started, the tide of migrant workers began to flow back, the local farmers entered the large-scale pig farm, and the pig farms achieved non-resident through strict management. Field management, going home during the day and going to work at night, I think as long as the conditions of the farm are better, the management is free, and the people who return to become pigs will gradually become mainstream, which is more in line with the government’s vestedness than the complete mechanization of the farm. Benefits, and at the same time more viable in the open competition market!