Pork consumption before the Spring Festival will enter the traditional peak season. Coupled with consumption driven by holiday consumption such as pickled pork and New Year's Day in winter, pig farming is expected to remain profitable before the Spring Festival. In 2024, sow production capacity entered a slow recovery phase, pig supply began to ease in 2025, and pig prices are expected to be under pressure.
The Zhitong Finance App learned that Guolian Securities released a research report saying that pig prices began to fluctuate upward in April 2024, the impact of pig disease weakened marginally, and feed-side costs continued to decline. Pig prices peaked at 21+ yuan/kg in August, then began to decline. As of December 26, pig prices had returned to 15.42 yuan/kg. Pork consumption before the Spring Festival will enter the traditional peak season. Coupled with consumption driven by holiday consumption such as pickled pork and New Year's Day in winter, pig farming is expected to remain profitable before the Spring Festival. In 2024, sow production capacity entered a slow recovery phase, pig supply began to ease in 2025, and pig prices are expected to be under pressure.
Guolian Securities's main views are as follows:
The Ministry of Agriculture and Rural Affairs has slightly increased its breeding column in November
Sow production capacity continued to rise in November, and pig prices may lose money after the Spring Festival. According to data from the Ministry of Agriculture and Rural Affairs, 40.8 million sows were kept at the end of November 2024, up 0.2% from the previous month and down 1.9% from the previous year, which is equivalent to 104.6% of normal holdings. Although the number of new piglets from August to October 2024 decreased by 1.6% compared to the same period last year, it is already at a high level in recent years. Based on a 6-month fattening cycle, the possibility of phased oversupply of off-season pork consumption after the Spring Festival in 2025 will increase, and pig farming may experience slight profits or even losses. Looking at the whole year, sow production capacity entered a slow recovery phase in 2024. The supply of pigs was relatively relaxed, and pig prices may be under pressure.
Yongyi Consulting's breeding sow inventory continued to increase in November
In November 2024, the breeding column of balanced aquaculture sample enterprises increased 0.34% month-on-month (previous value 0.56%); CUHK breeding sample enterprises were able to reproduce column 0.56% month-on-month (previous value 0.27%). According to feedback from Yongyi Consulting, the overall energy production base maintained a steady and slight increase trend this month. The recovery in sow production capacity showed structural differentiation. Leading group companies and pig breeding companies increased significantly, while the sow production capacity of medium-sized pig companies maintained a slight increase, with a few declines. The production capacity of sows in retail groups has remained stable, and there were no plans to fill the list a few years ago.
Mysteel Data Breeding Sow Inventory Continues to Increase in November
According to Mysteel data, in November 2024, the total sample breeding capacity of sows was +0.36% month-on-month (previous value +0.39%), of which large-scale farm breeding sows were +0.39% month-on-month (previous value +0.37%), and the month-on-month ratio of small to medium breeding sows was -0.67% (previous value +1.06%). According to Mysteel's feedback, pig prices rose slightly after falling in November, but breeding companies still have profit margins, and the overall desire to reduce production capacity on the farming side is weak. In addition, the piglet industry still has expectations for the market after the Spring Festival, and some companies are still willing to restore production capacity and expand slightly. There was a slight decline in the number of small and medium-sized scattered sows, which may be affected by local sporadic outbreaks and swine fever outbreaks in the Northeast region.
Target aspect: We recommend excellent farming enterprises with obvious cost advantages and a high degree of implementation, such as Muyuan Co., Ltd. (002714.SZ), Wen's shares (300498.SZ), etc.; at the same time, recommend post-cycle animal protection and feed sectors, such as Haida Group (002311.SZ).
Risk warning: risk of epidemic diseases, risk of long-term low livestock and poultry prices, risk of fluctuating raw material prices.
