New added capacity of hogs is more than 170 million head, and hog market price is not optimistic in 2018

By CnAgri2018-03-09 10:44:05 Print In 2017, hog price was declining, but the investment momentum of enterprises didn’t abate. According to incomplete statistics by BOABC, about 126.7 billion yuan of investment focused on hog industry in the whole year, the total capacity of the newly added hog breeding projects will reach more than 170 million head (due to the fact that some enterprises did not specifically disclose the project amount and scale capacity for investment, so this part of capacity isn’t accounted).
We conduct a detailed analysis of investment in hog farming in 2017:
 
In terms of sub-regions: Heilongjiang has become the most favored province for investment in pig farming in 2017 by both the planned production capacity and the investment amount.

The newly-increased production capacity mainly concentrates in potential and key development areas. Among them, hog production capacity invested in TOP3 provinces including Heilongjiang, Inner Mongolia and Sichuan was 18.15 million head 6.95 million head and 4.82 million head respectively, accounting for 22%, 8% and 6% respectively; the amount invested was 21.6 billion yuan, 16.8 billion yuan and 13.0 billion yuan, accounting for 17%, 13% and 4% respectively.

From the perspective of enterprises, besides integrated breeding enterprises such as WENS and Muyuan, feed enterprises like Da Bei Nong, Tech-Bank and CP Group have greater momentum.

In 2017, Da Bei Nong planned to increase hog capacity of about 12.76 million hogs with an investment of about 11.8 billion yuan; Tech-Bank planned to add hog capacity of about 10.3 million head with a total investment of 8.9 billion yuan; Muyuan invested about 6 billion yuan in adding hog capacity of 8.15 million head; and the investment is about 6 billion yuan Yuan; Wens planned hog capacity of about 3.5 million head with an investment of about 5.1 billion yuan.
In term of investment way, building new farms is the leading way with acquisition as a supplement. As for breeding mode, enterprises are more inclined to adopt multiple modes including “company + farmer” mode and that of raising self-produced pigs.
 
The newly added production capacity in 2016 and 2017 will gradually be released. It is estimated that hog prices will not be optimistic in 2018, posing a greater risk to pig breeding enterprises and farmers.