农林牧渔行业2024年中期策略：把握周期，拥抱成长

Investment Rating - The report maintains an investment rating of "Outperform the Market" for the agriculture, forestry, animal husbandry, and fishery industry [2][6]. Core Insights - The agriculture, forestry, animal husbandry, and fishery industry has underperformed compared to benchmark indices, with a return of -7.51% from early 2024 to June 26, 2024, lagging behind the CSI 300 index by 8.94 percentage points [5][12]. - The industry is expected to enter an upward cycle as pig prices stabilize and rise, driven by a reduction in supply and improved profitability in the breeding sector [5][30]. - The pet food sector has shown significant growth, while the wood processing sector has lagged behind; overall, the industry is currently valued at a historical low, presenting investment opportunities in specific sub-sectors [5][6]. Summary by Sections Market Review - The agriculture, forestry, animal husbandry, and fishery index has seen a decline of -12.65% over the past year, underperforming the Shanghai Composite Index by 7 percentage points [10]. - The pet food sub-sector has performed well, while the wood processing sub-sector has seen lesser gains [12][13]. Livestock Breeding - The pig breeding sector is entering an upward cycle, with a decrease in piglet supply and a stabilization of pig prices, leading to increased optimism among breeders [15][22]. - The average price of pigs reached 18.84 yuan/kg in mid-June 2024, reflecting a month-on-month increase of 3.80% and a year-on-year increase of 31.64% [22][24]. - The leading pig breeding company, Muyuan Foods, reported a 9% year-on-year increase in pig output for the first five months of 2024 [26]. Animal Health - The animal health sector is expected to benefit from the upcoming launch of new vaccines and the increasing scale of livestock breeding operations [44][46]. - The market for veterinary drugs has shown steady growth, with a compound annual growth rate of 7.76% from 2016 to 2021, although it faced a slight decline in 2022 due to the downturn in the breeding sector [42][44]. Seed Industry - The seed industry is poised for growth as 2024 is marked as the year of commercialization for biological breeding in China, with favorable policies and regulations being implemented [5][6]. - Companies in the seed sector are expected to benefit from increased industry concentration and profitability [5][6]. Pet Food - China's pet food market is projected to continue growing significantly, driven by changes in population structure and rising living standards [5][6]. - The market for pet food exports has shown signs of recovery, with domestic brands gaining market share [5][6].