The worst of the feed industry in North China is over.

Introduction

When feed consumption first started in April 2015, we went to Guangdong, the largest province of feed production, to conduct a survey. Now that feed consumption has reached its peak, we set out again from Weifang, Shandong Province, through eight areas: Fangzi, Hanting, Linyi, Yucheng, Jujia, Xinji and Jizhou. Field investigations were conducted on the main feed production enterprises, pig breeding enterprises and laying hen breeding enterprises along the way.

After more than 20 years of development, Shandong feed industry has made remarkable achievements. In the past three years, the total feed output of Shandong has been about 21 million tons, ranking firmly in the second largest province of feed output. In addition, according to the latest data from the National Bureau of Statistics, Shandong produced 3.962 million tons of poultry eggs in 2013, while Hebei produced 3.461 million tons of eggs, ranking second and third in the country. Hebei, close to Beijing and Tianjin, the fresh eggs are mainly supplied to the Beijing-Tianjin market, and can be radiated to Shanghai, Guangdong and other major sales areas. Through the investigation of these two regions, we can understand the current formula changes of feed production enterprises in North China, the stock structure of laying hens and pig breeding enterprises, breeding profits, the capacity loss of the breeding industry, as well as the understanding and participation of these enterprises in the futures market.

Sow fencing is now growing, and it will take time to form a production capacity.

We visited three large-scale pig farms, with 30, 100 and 200 sows respectively. The proportion of large-scale pig farmers in North China is increasing. 50% of farmers with less than 10 sows have withdrawn from the market. The withdrawal of these farmers is the main reason for the low stock of pigs in the whole market.

The improvement of the scale of pig farming is conducive to the improvement of production efficiency. The PSY (average number of weaned piglets per year) in these three farms ranges from 16 to 18, which is higher than the national average of 15.92 in 2014, but still lower than the average of 20 in developed countries such as the United States.

The feed-to-meat ratio of live pig farming is also quite different. In the pig farms with more fine management, the feed-meat ratio can reach 2.5, and the poor one is more than 3.0. In the case of hurdle pressure, the feed-meat ratio is even higher. Pig prices remained strong in the first half of 2015, while feed prices continued to fall. Farmers generally extended the feeding cycle and increased the weight of fattening pigs to 240 Mel 250 jin, compared with the normal level of 200 Mel 220 jin.

Among the three pig farms we visited, one did not expand the herd because the environmental protection facilities were not up to standard, and the other two all expanded the herd of Cunlan sows, which reached 100%. However, the stock of live pigs is the same as that of the same period last year, and the stock of fattening pigs has declined compared with the same period last year. The reason for the expansion of sows is, on the one hand, losses for three consecutive years, the stock of sows has been reduced to a certain extent, and pig houses have room for expansion, providing convenient conditions for expansion; on the other hand, pig prices have rebounded since March this year. Pig farming profits have reached the level of 700 yuan per head, and farmers also have funds to expand the group.

When pig prices skyrocketed in 2011, retail investors blindly mended pig prices regardless of sow breeds and weight, resulting in a decline in pig prices for three consecutive years. Due to the withdrawal of retail investors, the proportion of group expansion in the whole market is only 20%, and the filling time is relatively late, and most of the expanded sows are in the stage of waiting for delivery or breeding. According to the calculation that the reserve sows began to breed after two months, 4 months of pregnancy and 6 months after landing, the supply of live pigs increased significantly after 12 months. The data we monitor show that in May 2015, the price of reserve sows began to rise sharply and the fencing increased significantly, so the supply of live pigs is expected to increase in the second half of 2016.

The three pig farms we investigated are more optimistic about pig prices in the later stage: on the one hand, with the implementation of the new "Environmental Protection Law", more farms near water sources and farms with substandard pollutant emissions are closed, and the stock of the whole market decreases; on the other hand, a large proportion of retail investors withdraw from the pig farming market, and after pig prices pick up, these farmers who quit do not appear as blind fences as in 2011.

The above three pig farms believe that pig farming can remain profitable from the fourth quarter of 2015 to the first half of 2016, and capital preservation will not be a problem in the second half of 2016. However, we are cautious about the price of pigs. In August 2015, the slaughtering capacity of designated pig slaughtering enterprises across the country was only 15.0026 million, down 19.05 per cent from the same period last year, and the number of designated slaughtering decreased by 15 per cent for six consecutive months. At the same time, the cumulative slaughter volume from January to August 2015 decreased by 12.06% compared with the same period last year. Market supply is falling, while pig prices have fallen to 18 yuan / kg, down 10% from their peak. In addition, shipments and sales of Shuanghui and Yurun, China's two largest meat processing companies, both declined in the first half of 2015. As the increase in pig prices is higher than that of terminal meat products, the net profit of processing enterprises has dropped sharply compared with the same period last year. There is no doubt that the end demand is low, so we are cautious about the late increase in pig prices.

The degree of scale has increased, and the stock of laying hens has not decreased.

Most of the laying hens raised in North China are Highland series, and they are mainly young hens. They will see the eggs after 60 days, and all of them will enter the peak laying period after 175 ~ 180 days, and the laying rate can reach more than 85% during the peak period. The Jiajia Poultry Egg Development Zone in Gaocheng City, Shijiazhuang City, Hebei Province, which we investigated, used to be the area with the highest concentration of laying hens in northern China, but the outward transportation of poultry eggs has decreased significantly in recent years.

In the past, only armour eggs were mainly sold to Guangdong, Guangxi and other regions, but now laying hens breeding in Yunnan, Sichuan, Hubei and Hunan are developing rapidly. Because these areas are close to the marketing area and have a cost advantage, the outward shipping volume of poultry eggs in Hebei began to decline, and local sales began to increase. In the Hebei market, large-scale farmers put on horse equipment, launched clean eggs and brand eggs, and directly entered the supermarket, and the profits were OK, but the competitiveness of retail investors with less than 10,000 stocks declined, withdrew from the market one after another, and the degree of scale of laying hens breeding continued to improve.

The situation of laying hens resting is also different for farmers of different sizes. For retail investors with a stock of less than 10,000, the laying hens rest obviously. The breeding equipment of this part of farmers is relatively simple, and the ventilation, heat insulation and cooling equipment are not perfect. There are about 45 days of high temperature in summer every year, and the laying rate of laying hens will drop by 5% and 10%. On the other hand, there is basically no resting phenomenon in large-scale modern farms.

In the areas we studied, the stock of laying hens did not decline. When the price of eggs fell to 3.20 yuan per jin from March to June 2015, it is true that some farmers cleaned out chickens ahead of time, but most of the hens were eliminated for more than 480 days, and those under 400 days were rarely eliminated, and they did not wait and see after elimination, but chose to continue to fill the fence. From March to June, the price of egg chicks remained at a high level of 3.2 yuan per chicken. Due to the limited size of henhouses, the stock of laying hens maintained the same level as in the same period last year, and only a few retail investors planned to expand chicken sheds. Large-scale farmers made considerable profits for the whole year of 2014, and most of them expanded their henhouses. A farm we visited is building a new 50, 000-stock chicken house, which will be completed in November and is ready to continue introduction. Therefore, it is expected that the egg supply pressure will still exist in the fourth quarter of 2015, the egg price will be less than 4 yuan / jin, and the Dalian egg futures 1601 contract may fall to 3600 yuan / 500kg.

Both retail investors and large-scale farmers are still very strange to egg futures and think that the futures market is far away from them. Due to the lack of basic knowledge of the futures market, they think that the daily fluctuation of the spot price of the egg period should be consistent, and once the short-term deviation occurs, they will have doubts and worries about the futures market. and can not make good use of futures tools to transfer risk. Therefore, with the gradual deepening of the market understanding of egg futures, egg futures still have a lot of room for development.