The profits of Egafey dropped sharply in the third quarter and increased the construction of pig farms.

(agricultural Wealth Network) Last year, the real protagonist of "Goldman Sachs Pig farming" Agriffy International Group released the latest quarterly report, due to rising feed costs in the domestic market and falling pork prices, Agriffy's gross profit fell 38% in the third quarter compared with the same period last year. In order to reverse the unfavorable situation, Agriffy began to build a pig farm.

The company's third-quarter results showed revenue of $45.12 million, down 8.8% from $49.43 million in the same period last year. Agriffy's gross profit and net income fell more sharply than revenue, with gross profit of $7.6 million in the third quarter, down about 38% from a year earlier, and net income of $2.9 million, down about 65% from a year earlier.

From 2007 to 2008, pork prices in China soared. Egafey, which used to focus on feed business, invested more than 100 million US dollars raised in NASDAQ into the domestic pig industry. Large pig breeding farms and commercial pig production bases were built in Jiangxi, Shanghai, Fujian, Guangxi, Hainan and other places, which was mistaken for Goldman Sachs as the spokesman of the horse-racing paddock in China's pig industry.

Agriffy's management headquarters in Nanchang declined to respond to the decline in revenue and profits. Aigufei's main business in China is divided into pig farming and feed. Feng Yonghui, chief consultant of Souzhu, told CBN that falling pork prices and rising feed costs may be the main reasons for the sharp drop in profits.

The national average price of pork has fallen from 18.4 yuan per kilogram in April to 17.21 yuan per kilogram in November, according to Souzhu.com. While pork prices have fallen, the prices of products such as corn, which are used as feed materials, have risen all the way. According to materials released by the China Feed Industry Association, corn in Shandong Province increased from 1.35 yuan / kg to 1.90 yuan / kg in the first three quarters of this year, an increase of more than 40%. The rise in the price of feed raw materials led to an increase of 0.3 yuan per kilogram in the cost of fattening pigs, which further reduced the profits of pig enterprises.

Although the pig business is under pressure to make profits, Agriffy continues to expand pig farms. Gerard Daignault, chief operating officer, said: "on November 10, according to the western farm model, Agafi began to build a new pig farm in Dahua County, Guangxi. In the future, it will have a storage capacity of 10, 000 sows and 250000 live pigs by 2011, bringing the annual pig sales capacity of the whole to 2.5 million."