Chapter 21: National Recognition, Pig Prices Fall, Excess Profits
Since the outbreak of African swine fever, high-level officials have made many model predictions and calculated that the pork gap in 2019 will be around 14 million tons.
At present, the country will increase pork imports to more than 3-4 million tons.
In other words, the pork gap this year is probably more than 10 million tons.
Such a huge gap will naturally drive the price of pork to rise. No matter how many policies the country introduces, the price of pork has always been strong.
Because the gap is here, the demand is here.
When supply exceeds demand, economic laws will cause prices to continue to rise, which cannot be transferred by human power.
Now, [Chaoqun Group] says it can supply more than 5 million tons of pork to the market by the end of the year.
This was an unplanned supply of pork.
With this batch of pork, as long as the timing is right, although the price of pork cannot be brought back to the price before the outbreak of African swine fever, suppressing the rise in pork prices will no longer be a problem that troubles the top management.
Pork is related to the happiness of residents.
When the top leaders of the Ministry of Agriculture heard Guan Xuelie said that all the reserved pork of [Chaoqun Group], in addition to meeting the needs of their own [small fresh meat], could completely obey the state's command and invest in this pork price war.
The senior leader of the Ministry of Agriculture was immediately moved, held Guan Xuelia's hand, and said, "[Chaoqun Group] is really a conscientious and responsible enterprise! On behalf of the people, thank you."
"[Chaoqun Group] repays the country with Chicheng, and the country will not hurt the hearts of patriotic enterprises!"
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A few days after the top leaders of the Ministry of Agriculture returned with the inspection team, they quickly held a joint press conference with [Chaoqun Group] in the imperial capital.
Huang Yuping and Guan Xuelie attended the press conference as representatives of [Chaoqun Group].
The standards of this press conference are very high, and it is a rare honor for a private enterprise like [Chaoqun Group]. It has raised the social status of [Chaoqun Group] to a very high level, faintly enjoying the privilege of large state-owned enterprises. treatment.
The specifications of the press conference were very high, but the opening time was very short. That is to say, it was announced that [Chaoqun Group] has more than 5 million tons of pork, which will be put into various regional markets at market prices to calm down the rising prices during this period. pork prices.
Our country has always had the tradition of "the fewer the words, the bigger the matter".
After the news spread, pig-raising companies on the stock market first fell. The stock trend, which had been red, suddenly turned green.
But during the session, the stocks of pig-raising companies surged again.
The reason is that the market does not believe that [Chaoqun Group] can have such a large amount of pork!
In the stock forums of many pig raising companies, investors have been discussing endlessly, but it is generally believed that [Chaoqun Group] may have a huge amount of reserve pork, but it definitely does not have the 5 million tons of reserve pork it advertises.
You must know that the leader of pig raising enterprises [Wen's] only sells 22.29 million commercial pigs a year, which is only 1.67 million tons of pork. This is still a large quantity estimate.
[Chaoqun Group] advertises that it has more than 5 million tons of pork reserves, which is more than what three [Wen's] produce in a year.
In addition, [Chaoqun Group] has sold 32 million commercial pigs in the past nine months, which is 2.65 million tons of pork.
Its pork reserves, plus the pork it has sold, reach 7.65 million tons.
This is the annual output of 4.6 [Wen's].
[Wenshi] has been in the pig breeding industry for more than ten years or decades, and [Chaoqun Group] is just a rising star. It has only been a few years since it entered the pig breeding industry and started breeding on a large scale, that is, Two or three years.
In just the past few years, it has achieved four or five times the achievements of [Wen's].
Not many people would dare to believe such results.
It’s really an exaggeration!
It is generally believed in the market that [Chaoqun Group] will have 12 million to 15 million commercial pigs ready for slaughter in the next three months.
Including the pork stored in its cold storage, the quantity should be around one million tons.
Although this amount is exaggerated, it is not as exaggerated as 5 million tons. It will have an impact on the pork market, but it will never be as big as imagined!
This is the reason why related pig-raising companies fell first and then rose.
The stocks of pig-raising companies have been rising steadily this year, with a few daily limits from time to time.
This is because since the outbreak of African swine fever, the supply of live pigs has decreased and the price of pork has continued to rise. The profit of pig raising companies in the first half of 2019 has reached 650 yuan/head, but in the second half of 2019, the profit level has skyrocketed. , the highest profit reached 2,800 yuan/head, and even now, the profit level is still 2,000 yuan/head.
With such a high level of profitability, it’s no wonder that the stock prices of pig-raising companies have skyrocketed.
A professional organization predicts that the total market value of 29 pork concept stocks is expected to increase by 350 billion yuan in 2019!
The current stock price is still not the end!
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Of course, [Chaoqun Group] does not care about the oaths of investors who own pig-raising companies and are optimistic about the pig-raising industry.
【Chaoqun Group】does not speculate in stocks!
The group only strictly followed the national dispatch, mobilized the reserved pork in cold storages across the group, and sold the pork in major markets across the country at a price slightly lower than the market price.
Tens of thousands of tons of pork are sold every day!
The daily pork consumption nationwide is around 140,000 tons.
Thousands of tons of pork are thrown away every day, which can prevent the price of pork from rising. The price has been trading sideways at the level of 13.81 yuan/jin to 13.95 yuan/jin, and has been unable to break through 14 yuan/yuan.
[Chaoqun Group] has been selling for a week, and the price of pork has dropped to 13.5 yuan/jin.
The stock prices of pig-raising companies have also ended their long-term upward trend, and the stocks of several pig-raising companies have even dropped to the limit. This is a case of several big bookmakers taking advantage of the emotions of investors to cut off the leeks of investors!
Suddenly, there were wailing sounds in several pig-raising company stock bars. They all turned off the lights and ate noodles, and the tears couldn't stop flowing.
And those dealers took the leeks they cut and went to fry and eat the meat!
When things have developed to this point, stock investors, or the market, have long believed that [Chaoqun Group] has huge pork reserves.
[Chaoqun Group], which has such a huge pork reserve, and cooperates with the country's administrative dispatch capabilities, it is too easy to suppress pork prices.
At the end of September, the day before National Day.
A piece of news came out about [Super Group].
It turns out that [Chaoqun Group] last year, in order not to impact the domestic pork market, most of the pork it produced was used for freezing in cold storage.
It was originally intended to be used for production expansion, consumption and export of its [Little Fresh Meat] brand.
However, with the outbreak of African swine fever this year, [Chaoqun Group] is prepared to judge that after the outbreak of swine fever, the shortage of live pigs will increase significantly and the price of pork will rise significantly. Therefore, on the one hand, it will expand pig breeding and on the other hand, it will increase pork reserves.
It is precisely because of this that [Chaoqun Group] has such a high pork reserve.
The amount of pork reserves is so large that [Chaoqun Group] cannot hold it in its own cold storage and has to rent a third-party cold storage for use.
These messages are easily verifiable.
After all, many actions of [Super Group] are traceable, and it will be very clear if you look them up.
It turned out that [Chaoqun Group] actually rented a large number of third-party cold storages after the New Year, storing an incalculable amount of pork.
As soon as this discovery came out, the price of pork in the market plummeted from a high, falling all the way from the price of 13.5 yuan/jin. It fell for several days in a row, and fell directly to the price of 11 yuan.
The market has completely recognized that [Chaoqun Group] has such a large amount of pork reserves.
When expectations change, the price of pork will naturally change.
The price of pork fell directly without the government doing anything.
As the wholesale price of live pigs falls, the retail price of pork on the market will naturally follow suit.
Although the price of pork is still at a high level compared to a year ago and the beginning of the year, at least it will not continue to rise. People who want to eat meat can still afford it if they bite the bullet.
The public naturally welcomes this result.
But some pig-raising companies hate the instigator [Chaoqun Group] to their core.
You have so much pork in reserve, so why don't you keep silent and make a fortune?
Sell your pork quietly and make money quietly!
Why announce it? Why sell?
OK!
The market has accepted this result, and pork can no longer rise!
Pork cannot rise, and the prices of alternative meats such as chicken, duck, beef and mutton have also begun to fall, and the decline is still very strong.
Seeing this situation, those breeding companies hated [Chaoqun Group] even more.
Destroying someone's wealth is like killing one's parents!
However, hate comes after hate, and these breeding companies have nothing to do with [Chaoqun Group].
After all, [Chaoqun Group]'s entry into the pig industry is the development of the entire industry chain, including upstream fertilizer, downstream slaughtering, and sales, all of which are controlled by themselves.
Even if these breeding companies want to stumble [Chaoqun Group], they have the intention but not the ability.
Besides, the [Chaoqun Group], which has solved a big problem in the country, has already been listed on it. To target the [Chaoqun Group] at this time is to hang yourself - you think your life is too long!
Of course, the [Super Group], which has demonstrated huge cold storage capacity and huge capital reserve capacity in this pork incident, will be able to deal with them without even requiring the country to take action.
[Chaoqun Group] can manipulate market prices through market behavior of acquisitions and sales. Just like the four major international grain merchants, it artificially lowers sales prices and raises production costs. With a few back and forth, it can bring the other company to collapse.
As early as 2018, [Chaoqun Group] had this capability. In that year, [Chaoqun Group]'s [Pig Farms] produced a total of 25.5 million pigs, equivalent to 2.11 million tons of pork.
This is unplanned output.
That year, excluding the output of [Chaoqun Group] pig farms, the country produced a total of 54.04 million tons of pork and consumed 55.398 million tons.
In 2018, life for major pig raising companies was already difficult. Limited by a variety of factors, such as rising feed prices, the pig cycle, and the outbreak of African swine fever, pork cannot be sold at a high price.
The profits of various companies generally declined in 2018. Among them, [Muyuan Shares]’s net profit attributable to shareholders of listed companies fell by 78.01%, and [Dabeinong]’s net profit attributable to shareholders of listed companies was 524 million yuan, a year-on-year decrease of 58.58%; the total profit 710 million yuan, a decrease of 54.68% compared with the same period last year.
If [Chaoqun Group] did not freeze most of the pork, but chose to sell it all to the market, it would inevitably cause a sharp decline in the pork market.
Major pig raising companies, including the leader [Wen's], let alone profits, directly suffered losses!
The more you sell, the more you lose.
Because among all pig-raising enterprises, [Chaoqun Group] has the lowest comprehensive breeding costs. If there is a price war, it will also be the one with the last laugh.
If this kind of behavior happens a few times, at least half of the listed pig raising companies will go bankrupt.
It is not impossible for [Chaoqun Group] to use this to expand the number of breeding animals and control the domestic pork price.
Of course, this kind of behavior will definitely attract a blow from the state.
While [Chaoqun Group] has exploded pig-raising enterprises, it will inevitably cause a large number of low-level pig farmers to lose their money, which may cause social instability. This is a situation that the country does not want to see.
[Super Group] would not do such a thing even if they have such ability.
The national level has also seen that [Chaoqun Group] has such a sense of responsibility, and has given more trust and greater authority.
[Chaoqun Group] already has a vague status like [Sinograin] in the pig raising industry, playing the role of a talisman.
Almost all pig-raising companies have already acquiesced in the leading position of [Chaoqun Group], a rising star, in the pig-raising industry. No one can ignore the existence of [Chaoqun Group]!
From now on, [Chaoqun Group] will study the pig farming module carefully even if it sneezes.
Because this may directly drive the price of pork up or down.
[Chaoqun Group] already has the ability to determine the price of pigs with one word!
This is the biggest gain of [Chaoqun Group] in this pork war. Of course, Wu Siyuan, the man behind the scenes, also reaps a lot of influence and energy.
In addition, although the price of pork has dropped from 13 yuan/jin to 11 yuan/jin, [Chaoqun Group] is still making unimaginable profits.
People at the headquarters of [Chaoqun Group] predict that pork sales in 2019 will reach more than 7 million tons. After deducting the breeding cost of 4.2 yuan per catty, the freezing cost of 2.8 yuan, transportation costs, sales costs, interest costs and other intermediate costs, [Chaoqun Group] can earn an average of 5.3 yuan per catty of pork.
More than 7 million tons of pork can generate a profit of at least 74.2 billion yuan.
[Chaoqun Group] borrowed more than 30 billion yuan from banks in order to develop the pig industry, but it earned it all back within two or three years.
After deducting the loans, at least more than 40 billion yuan was earned.
In 2018, the profit of [Wen's] was 4.292 billion yuan, and the pig raising business of [Chaoqun Group] alone was almost the sum of the profits of ten [Wen's].