Investment Rating - The report maintains an investment rating of "A" for the agriculture sector, suggesting a focus on the recovery cycle of feed and marginal improvements in breeding [1]. Core Insights - The agriculture sector has shown a decline of 2.97% in the past week, with the animal health, food and feed additives, fruit and vegetable processing, aquaculture, and seeds sub-industries performing the best [1][22]. - The report highlights a potential recovery in the feed industry due to the decline in upstream raw material prices and improvements in the breeding sector, particularly for Haida Group, which is expected to see an upward trend in its operational fundamentals [2][4]. - The report emphasizes that the current market may be overly pessimistic about the impact of rising pig production capacity on profitability, while it overlooks the positive effects of declining raw material costs and potential macro demand recovery in 2025 [3]. Summary by Sections Swine Breeding - As of August 1, 2025, the average prices for external three yuan pigs in Sichuan, Guangdong, and Henan were 13.70, 16.04, and 14.38 yuan per kilogram, reflecting increases of 0.74%, 3.22%, and 1.77% respectively [2][31]. - The average pork price was 20.60 yuan per kilogram, down 1.29% from the previous week, while the average wholesale price for piglets was 27.00 yuan per kilogram, up 3.85% [31]. - The report suggests that the swine breeding industry is expected to enter a profitability cycle starting from Q2 2024, although the average debt reduction rate indicates a long road ahead for the industry [3]. Poultry Breeding - The weekly price for white feather broilers was 6.83 yuan per kilogram, up 1.94%, while the price for broiler chicks rose significantly by 33.16% to 2.57 yuan per chick [46]. - The report notes that the breeding profit for broilers is currently negative at -0.43 yuan per chick, and egg prices have decreased by 2.70% to 7.20 yuan per kilogram [46]. Feed Processing - In June 2025, the total industrial feed production in China was 27.67 million tons, a slight decrease of 0.1% month-on-month but a year-on-year increase of 6.6% [55]. - The report indicates that the production of compound feed, concentrated feed, and additive premix feed saw year-on-year growth of 6.6%, 3.4%, and 8.7% respectively [55]. Aquaculture - As of August 1, 2025, the prices for sea cucumbers, shrimp, and bass remained stable at 90.00 yuan per kilogram, 320.00 yuan per kilogram, and 50.00 yuan per kilogram respectively [64]. - In freshwater products, the price for grass carp was 16.70 yuan per kilogram, down 0.30%, while crucian carp saw a slight increase of 0.09% to 22.99 yuan per kilogram [64]. Crop and Grain Processing - As of August 1, 2025, soybean prices were stable at 3926.32 yuan per ton, while corn and wheat prices slightly decreased to 2402.75 yuan and 2440.50 yuan per ton respectively [75]. - The report highlights a significant increase in the price of enoki mushrooms, which rose by 37.78% to 6.20 yuan per kilogram [75].

2025年至今，生猪期现货市场供需博弈加剧，呈现"现货上下两难、期价重心震荡上移"的格局。从产能 角度来看，今年生猪供应宽松，但未出现往年的大跌行情，受养殖端缩量提价、政策调控加码等因素影 响，价格整体走势平稳，行业仍处于磨底阶段。全国生猪现货价格在13500~16500元／吨区间震荡，高 点出现在春节前，低点出现在端午节后。我的农产品网数据显示，8月初，全国生猪出栏均价为14.10元 ／千克，低价区报13.20元／千克。 今年以来，生猪期货主力合约价格波动率整体呈现下降趋势，处于较低水平。上半年期货市场整体 呈"弱预期"走势，市场预期后市供应压力较大，对猪价持悲观预期，年初主力合约价格最低跌至12600 元／吨附近。但在现货市场价格下跌幅度有限的情况下，受期现回归驱动，期货近月合约价格出现向上 修复的补涨行情，彼时正向套利策略普遍表现较好。随后，受4月上旬贸易摩擦、7月生猪行业"反内 卷"政策预期等因素影响，生猪期货价格进入震荡反弹阶段，重心曲折上行。7月23日，主力合约最高涨 至15150元／吨。不过，目前仍处于季节性需求淡季，现货价格大幅贴水期货价格，主力合约价格冲高 回落，7月底震荡回调。临近交割月， ...

Core Insights - The Ministry of Agriculture and Rural Affairs has initiated a meeting focused on the high-quality development of the pig industry, emphasizing the need to reduce production capacity, control operations, and lower the weight of pigs, marking a significant phase in capacity regulation [1][3]. Group 1: Production Capacity Management - The national target for the breeding sow inventory has been adjusted down by 1 million heads to alleviate supply surplus pressure [3]. - Measures include halting secondary fattening and controlling the market behavior to prevent excessive inventory [3]. - The target for the average slaughter weight is set around 120 kg to avoid overstocking and subsequent supply excess [3]. Group 2: Market Dynamics - As of July 30, the national average price of live pigs reached 6.98 yuan per jin, marking a new low for the year [5]. - Historical data indicates that if the breeding sow inventory decreases to 39 million heads, pig prices could rise by 11%-19% year-on-year in the fourth quarter, reflecting a price elasticity driven by supply improvements [7]. - The current valuation of the livestock sector is at a historical low, with the China Livestock Index at a price-to-book ratio of only 2.67, placing it in the 12th percentile historically [7]. Group 3: Industry Outlook - Low cost is identified as the core competitive advantage for listed pig companies to navigate the pig cycle, with a focus on companies that excel in cost control or have clear cost-reduction pathways [1][8]. - The recovery of livestock inventory is expected to gradually boost demand for feed, while the approaching high temperatures will lead to a sales peak for aquatic feed [1][9]. - The Livestock ETF closely tracks the China Livestock Index, with over 60% of its components related to pig farming, and nearly 40% encompassing upstream and downstream sectors such as vaccines and feed [10][14].

2025年至今，生猪期现货市场供需博弈加剧，呈现"现货上下两难、期价重心震荡上移"的格局。从产能 角度来看，今年生猪供应宽松，但未出现往年的大跌行情，受养殖端缩量提价、政策调控加码等因素影 响，价格整体走势平稳，行业仍处于磨底阶段。全国生猪现货价格在13500~16500元／吨区间震荡，高 点出现在春节前，低点出现在端午节后。我的农产品网数据显示，8月初，全国生猪出栏均价为14.10元 ／千克，低价区报13.20元／千克。 今年以来，生猪期货主力合约价格波动率整体呈现下降趋势，处于较低水平。上半年期货市场整体 呈"弱预期"走势，市场预期后市供应压力较大，对猪价持悲观预期，年初主力合约价格最低跌至12600 元／吨附近。但在现货市场价格下跌幅度有限的情况下，受期现回归驱动，期货近月合约价格出现向上 修复的补涨行情，彼时正向套利策略普遍表现较好。随后，受4月上旬贸易摩擦、7月生猪行业"反内 卷"政策预期等因素影响，生猪期货价格进入震荡反弹阶段，重心曲折上行。7月23日，主力合约最高涨 至15150元／吨。不过，目前仍处于季节性需求淡季，现货价格大幅贴水期货价格，主力合约价格冲高 回落，7月底震荡回调。临近交割月， ...

Group 1 - The report highlights a reversal in the pig farming dilemma, indicating a potential recovery in the industry due to policy-driven capacity adjustments and supply reductions [2][8]. - The current pig cycle is in a de-stocking phase, with the number of breeding sows in China decreasing from a peak of 41.42 million in 2024 to 40.43 million in June 2025, a decline of approximately 2.4% [22][23]. - The Ministry of Agriculture and Rural Affairs has set a target to reduce the breeding sow population by about 1 million heads, aiming for a total of 39.5 million [22][23]. Group 2 - Short-term pig prices are expected to decline due to reduced second fattening and seasonal demand, but a long-term increase is anticipated if the breeding sow population stabilizes below 39.5 million [26][29]. - As of July 25, 2025, the profit from self-breeding pig farming was 62.16 yuan per head, a decrease of 31.61% from the previous week, while the loss from purchasing piglets expanded to 71.39 yuan per head [32][33]. - The report emphasizes that large-scale enterprises will have more stable profitability compared to smallholders due to cost advantages and industry chain synergies [32]. Group 3 - The report identifies two key companies in the pig farming industry: Yongshun Biological and Dayu Biological, detailing their business models and market positions [3][35]. - Yongshun Biological focuses on the research, production, and sales of veterinary biological products, with over 30 types of vaccines for pigs and poultry, maintaining over 90% of its revenue from vaccine sales [3][37]. - Dayu Biological specializes in feed additives and veterinary drugs, with its feed additive and feed businesses accounting for 65.39% and 29.74% of its revenue, respectively [50][56]. Group 4 - The report provides an overview of the pig farming industry chain, which includes upstream breeding, feed production, and veterinary supplies, midstream modern farming practices, and downstream processing and distribution [21][24]. - The entire industry chain is heavily influenced by technological advancements, management practices, disease control, and is subject to environmental regulations and government oversight [21][24].

Core Viewpoint - Since early June, live pig futures prices have shown a trend of fluctuating upward, but recently have experienced a pullback due to overall macro sentiment. As of July 30, the main contract for live pig futures closed at 14,075 yuan/ton, an increase of 600 yuan/ton or 4.5% from the closing price of 13,475 yuan/ton on June 9 [1]. Group 1: Market Dynamics - The live pig spot price has continued to decline since August 2024 due to excess production capacity. As of June 2025, the number of breeding sows in China was 40.43 million, showing a negligible decline of less than 1% from the peak at the end of 2024 [1]. - The Ministry of Agriculture and Rural Affairs has implemented a series of regulatory measures since June, including suspending the expansion of breeding sows and regulating secondary fattening. Following these measures, leading breeding companies quickly responded, leading to a rebound in live pig spot prices from their lows [1]. - As of July 3, the average daily price of live pigs in the mainstream market was 15.5 yuan/kg, an increase of 1.56 yuan/kg or 11% from the low point in early June [1]. Group 2: Supply and Demand Analysis - Despite the rebound in prices, supply-side pressures have not been effectively alleviated, and the current period is characterized by weak demand. The price of live pigs has shown a pullback after reaching a high in July [2][3]. - The recent "anti-involution" measures in the pig industry are expected to effectively eliminate outdated production capacity and control the weight of market pigs, which may lead to a decrease in live pig inventory [2]. - The average daily slaughter volume has decreased by 7.93% compared to June, making it difficult to absorb the output, and the spot price in Henan has dropped from 15.5 yuan/kg at the beginning of the month to 14 yuan/kg [3]. Group 3: Future Outlook - The "anti-involution" measures are expected to gradually take effect, potentially reducing the number of breeding sows to 39.5 million. This is likely to provide bottom support for long-term contracts [4]. - The increasing proportion of large-scale breeding enterprises is expected to smooth out the volatility of pig prices, reducing the impact of significant fluctuations in production capacity on prices [4]. - In 2024, the number of breeding sows among major listed companies is projected to increase by 6.12%, and the annual output of the top 10 listed pig companies is expected to reach 142.75 million heads, an increase of 10.56% compared to 2023 [4].

Group 1 - The Chinese pig farming industry has experienced significant capacity expansion since 2020, leading to oversupply and sustained low prices, resulting in continuous losses for most pig farming companies, with only Zhengbang Technology remaining profitable in 2023. However, overall profitability is expected to improve in 2024, with net profits turning positive for most companies [1] Group 2 - Since March 2021, the net profit level of large-scale pig farming in China has fluctuated significantly, remaining in a loss state from early 2023 until September 2023, when it turned profitable. It is projected that net profits will decline again until April 2025, reaching 86 yuan per head [2] Group 3 - The net profit of free-range pig farming in China has shown a similar trend to that of large-scale farming. The lowest net profit was recorded in June 2021 at -665 yuan per head, while the highest was in October 2022 at 1246 yuan per head. By April 2025, the net profit for free-range farming is expected to be 50 yuan per head [4] Group 4 - The cost of large-scale pig farming in China has been on a downward trend since March 2021, decreasing from 2884 yuan per head to 2033 yuan per head by April 2025, indicating effective cost control [8] Group 5 - Similarly, the cost of free-range pig farming has also decreased from 2971 yuan per head in March 2021 to 2123 yuan per head by April 2025, reflecting good cost management [9]

Core Viewpoint - Muyuan Foods has reported a significant increase in net profit for the first half of the year, with figures ranging from 10.5 billion to 11 billion yuan, marking a tenfold increase compared to last year. However, this performance is still below the peak of the previous cycle, indicating a potential shift in the industry towards a low-profit era due to prolonged pig cycles and increased market competition [2][4][6]. Group 1: Industry Cycle and Company Performance - The pig cycle in China has been disrupted, with the previous cycle lasting six years without signs of reversal in pork prices, contrasting with the historical four-year cycle [6][7]. - The expansion of large-scale pig farming enterprises has led to a market where 70% of production is controlled by large farms, reducing the flexibility of smaller farmers and extending the industry cycle [6][7]. - Muyuan's production capacity has increased dramatically, with the number of pigs raised rising from 10.25 million to 71.6 million from 2019 to 2024, reflecting the aggressive expansion of leading companies [6][7]. Group 2: Challenges Facing Muyuan Foods - Muyuan Foods faces three major challenges: a prolonged wait for the pig cycle to recover, increasing supply from a high number of breeding sows, and rising debt levels that limit future expansion [8][9][11]. - The number of breeding sows in China remains high, with 40.78 million expected by the end of 2024, indicating that supply will not decrease significantly in the near term [9][11]. - Muyuan's debt has escalated from 21.175 billion yuan to 110.112 billion yuan, with a debt-to-asset ratio rising from 40.04% to nearly 60%, constraining its ability to finance further growth [13][15]. Group 3: International Expansion and Market Risks - Muyuan Foods is planning to raise at least $1 billion through an IPO in Hong Kong, aiming to enter overseas markets with its "pig farming solutions" [16][21]. - The company has partnered with BAF in Vietnam to provide pig farm design and biosecurity solutions, but the success of this model in Southeast Asia remains uncertain due to local competition and market conditions [19][21]. - The infrastructure challenges in Southeast Asia may hinder the replication of China's large-scale farming success, limiting the potential for Muyuan's technology and service exports [22][21].

Core Viewpoint - The A-share listed pig farming companies are experiencing a "volume increase and price decrease" pattern in the first half of 2025, with several leading companies like Muyuan Foods showing positive performance forecasts [1][2]. Industry Overview - As of July 25, 2025, there are 35 pig-related stocks in China's A-share market, with 20 companies disclosing June sales data. Most companies reported a year-on-year increase in sales volume, but sales revenue did not grow correspondingly due to a decline in selling prices [2][13]. - The Ministry of Agriculture and Rural Affairs held a meeting on July 23, 2025, emphasizing the need for market guidance and policy support to stabilize the pig market and promote the industry's transformation and upgrade [3]. Company Performance - In June 2025, the total sales volume of the 20 listed pig companies exceeded 17 million heads, with Muyuan Foods, Wens Foodstuff Group, and New Hope leading in sales volume [4][6]. - Muyuan Foods reported sales of 701.9 thousand heads and sales revenue of 12.799 billion yuan, with a year-on-year sales volume increase of 58.35% and revenue increase of 27.65% [6]. - Wens Foodstuff Group sold 300.73 thousand heads with a revenue of 4.92 billion yuan, showing a year-on-year sales volume increase of 28.93% but a revenue decrease of 5.40% [6]. - New Hope sold 133 thousand heads with a revenue of 1.871 billion yuan, reflecting a slight sales volume increase of 3.38% but a significant revenue decline of 19.14% [6]. Market Dynamics - The overall pig farming industry has been profitable for 14 consecutive months since May 2024, with the production situation generally favorable [4]. - The average selling price of pigs has decreased, impacting revenue despite increased sales volumes [7][12]. - Some companies, such as Muyuan Foods and Zhengbang Technology, managed to achieve both sales volume and revenue growth [7]. Future Outlook - Muyuan Foods expects a net profit of 10.2 to 10.7 billion yuan for the first half of 2025, representing a year-on-year growth of over 1,129% [14]. - New Hope anticipates a turnaround in performance, attributing improvements to enhanced production management and cost reductions [15]. - Companies are exploring international markets, with plans to expand into Southeast Asia, the Middle East, and Europe, aiming to enhance their global presence [16].

Core Insights - The Ministry of Agriculture and Rural Affairs convened major pig farming companies to discuss promoting high-quality development in the pig industry, signaling a shift towards efficiency rather than scale [1][2] - The industry is transitioning from a focus on scale to efficiency, with leading companies like Muyuan, Wens, and New Hope benefiting from cost reduction and efficiency improvements [3][4] - The government aims to stabilize pig prices and prevent overproduction, indicating a commitment to maintaining industry balance and supporting cost-effective producers [4][6] Industry Dynamics - The recent meetings and discussions reflect a clear "anti-involution" strategy, aiming to curb reckless expansion among high-cost producers [2][4] - The profitability of pig farming has been consistent for 14 months, with 11 out of 14 listed pig companies reporting positive performance in their semi-annual reports [3][4] - Large funds are increasingly investing in leading pig farming companies, as evidenced by significant inflows into the livestock farming ETF (516670), which has seen over 100 million yuan in recent investments [4][6] Market Trends - The ETF related to livestock farming shows strong upward momentum, indicating growing investor interest in the sector [6] - The government's proactive stance on industry regulation is expected to increase in intensity, reinforcing the trend towards prioritizing quality over quantity in production [4][6] - The focus on cost control and efficiency is likely to further enhance the competitive edge of leading companies in the pig farming sector [4][6]