Zhi Tong Cai Jing·2025-10-13 08:09Core Viewpoint - The report from CITIC Construction Investment indicates that despite a recent pullback in the stock prices of livestock-related companies due to a slowdown in the reduction of dairy cow inventory, the underlying cyclical logic remains intact, presenting a good opportunity for investment amidst the current cycle [1][2]. Group 1: Market Dynamics - Since mid-August, livestock stocks, represented by YouRan Agriculture, have experienced significant pullbacks, raising market concerns [2]. - The recent pullback is attributed to several factors: unexpected dairy cow inventory reduction data leading to a rapid price increase, profit-taking pressures, and seasonal supply and demand fluctuations [2]. - Despite short-term negative data, the long-term logic of the meat and dairy cycle remains unaffected, with dairy cow inventory reduction expected to continue into the off-season [2]. Group 2: Beef Market Insights - The wholesale price of beef in China reached 66.04 yuan/kg as of October 11, remaining near recent highs despite a slight decline from the pre-National Day peak [2]. - The prices of both dressed beef and wholesale beef have hit new highs due to pre-holiday stocking, indicating a clear upward trend in beef prices [2]. - The beef market is characterized by a tightening supply situation, with prices expected to continue rising in the coming years [3]. Group 3: Dairy Market Analysis - Although there has been a temporary slowdown in dairy cow inventory reduction, the overall trend remains unchanged, with raw milk prices stabilizing at 3.04 yuan/kg as of September 30 [4]. - In Shandong, the raw milk purchase price is below the comprehensive cost, indicating ongoing losses and a continued reduction in dairy cow inventory [4]. - The expected rise in beef prices will likely encourage farms to cull dairy cows, accelerating the reduction of dairy cow inventory and hastening the bottoming process of the raw milk cycle [4].