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The slaughter of hogs of domestic large-scale farming enterprises increased in 2017, but the growth will slow down later

China Agriculture Report By CnAgri2018-02-09 09:27:51China Agriculture Report Print
Keywords:Livestock Hog Feed
Domestic large-scale hog farming enterprises all saw great growth in slaughter in 2017, of which, the production of Wens, Muyuan, Zhengbang and Tech-Bank was 19.04 million head, 7.23 million head, 3.42 million head and 1.01 million head, increasing 11.18%, 132.4%, 51.14% and 74.84% year on year separately. In addition, Truein Group and New Hope Group are expected to slaughter about 2.4 million hogs respectively.
Under the circumstances that hog prices keep low, hog farms suffered serious losses, and a large number of middle and small-sized enterprises exited the market, large scale hog farming enterprises accelerated hog industrial projects to be put into operation relying on their financing capacity in capital market, so hog capacity was centralizedly released in 2017. As a representative company, with strong fund-raising capacity, Muyuan Group has started to raise capital to promote hog industrial projects in various regions since 2014. During the period from 2014 to 2016, Muyuan Group totally raised RMB 4.7 billion, finished seven hog farming projects in Henan province, built 20 hog farms, and reached a hog production capacity of 3.675 million head.
It’s predicted that general large scale hog farm enterprises will slow down growth in capacity in the next few years
(1) At present, hog prices fluctuate around RMB14.5/kg, and feeding benefit keeps at a normal level, RMB200-300/head. It’s expected that hog prices in 2018 will maintain this level, and will not see excessive profit which appeared in 2016, and investors’ willing of investment will decline.
(2) Environmental protection policy becomes stricter. If the combination of farming and animal husbandry can’t be realized, the expansion of hog capacity will face increased resistance. It’s very difficult to obtain a large area of land for developing planting and farming project or cooperate with surrounding farmers to bring about effective utilization of waste things.
(3) Land for livestock raising is not included in the land planning of the government. Under the influence of environmental protection policy, the demand of land for scale farming of hog is increasing, and the shortage of land for farming also has an impact on hog capacity expansion of enterprises.
However, we think that Wens Group will continue to realize stable growth by virtue of its superior “company + farmer” business mode. It’s expected that Wens Group’s production capacity will increase about 4.5 million head annually in 2018 and 2019, and its slaughter will be up to 30 million head, steadily moving towards its production target of 80 million head. 
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