The Status And Prospects Of The Hog Breeding Industry

This thesis has three parts. The first part is a brief introduction of hog price cycle. To begin with, the hog price cycle generally shows a period of three years with a longer period of price going up and a shorter period of price going down. Secondly, two key factors dominate hog price cycles which are supply and cost. As for supply factor, it involves hog manufacturing cycle, livestock structure and farmers' expectation and behavior. Generally, it requires 13 months from breeding sows to commodity hogs. Sows are usually regarded as productivity by professionals while livestock levels as one of leading indicators of hog price cycle. However, hog price cycle sometimes will be deviated due to farmers' expectation and behavior. This paper tries to deduce hog price cycle from supply layer and result in a continuing diminishing price cycle. Another key factor of hog price cycle is cost including feed cost and labor cost, which is the reason for rising bottom price in each hog price cycle. To sum up, the author forecasts the hog price in 2013 by using the above theory.The second part of the thesis analyses the efficiency of hog breeding. At first, the author definite a performance indicator to measure efficiency which is PSY, the number of healthy commercial hogs one sow can provide every year. Secondly, there are three core factors which will influence the final performance of breeding. Disease is an external disturbance while hog-breeding model is the most important factor. In this paper, the author think scale of production can have a win-win result of different parties and will be an inevitable trend of the industry through analyzing the current situation, on-going changes and future development. To explore a way of scale production with Chinese characteristics, the thesis forecast the possible opportunities and challenges by discussing the main construction of farmers, successful cases and existing hog-feeding models. The thesis also points out that tight cooperation with farmers and enterprises may be a possible way for the industry because it does good to outside expansion and performance improvement. Finally, the second part shows a comparison of relevant listed companies in expansion speed and volatility of earnings.The third part is a prospective study of the hog-breeding industry. Firstly, it analyses the trends of future development and points out that appropriate scale of production is the main trend of the industry through discussion on scale effect, opportunity costs and expansion restrictions. Thus, the paper also suggests hog-breeding enterprises to focus on optimizing models to take full use of its own advantages. At last, the author gives some advice to both industry capitals and secondary market investors. To industry capitals, contrarian thinking should be a better choice while PSY and its fluctuation are key factors. To secondary market investors, cyclical investment may be wise and enterprises with high growth quality will result in good investment performance.