Rising fodder makes the "replacement effect" of wheat gradually appear

Since 2012, due to the adverse climate, the quality of maize in the Huanghuai region of northern China has been low, and the demand for high-quality corn in Northeast China has been strong, and the regional supply is tight. From December 2011 to July 2012, the price of corn continued to rise. Among them, from January to May, the year-on-year increase was larger than 10%. In June and July, the purchase of feed companies slowed, and the corn deep-processing companies suffered losses. Demand restrained domestic corn prices from stabilizing, with increases of 8.3% and 8.2% respectively.

Soybean meal is a by-product of soybean oil production. 80% of domestic soybeans rely on imports. Of these, soybean imports from the United States account for a large proportion. The price fluctuations in soybeans and soybean meal in the United States will directly affect domestic soybean meal prices. Therefore, the domestic soybean meal prices fluctuate by a large margin and have a high frequency of fluctuation. From November 2011 to February 2012, affected by the increase in soybean cultivation in the United States, the decline in international soybean prices drove domestic soybean meal prices to fall sharply. According to statistics, the monthly average purchase price of soybean meal for aquaculture companies has fallen by more than 8%, and the decline rate has slowed to about 4% in March. Since then, it has begun to rise month by month. From late June to the end of July, the international soybean prices have continued to rise due to the continued drought in the United States, driving domestic soybean meal prices to rise continuously. As of the end of July, the purchase price of soybean meal for aquaculture companies has reached 4 yuan per kilogram, reaching the highest point in history since 2009.

Wheat "replacement effect" appears

With the rising prices of corn and soybean meal, the cost of raising the breeding industry continues to increase. Affected by the continuous increase in market supply, prices of live pigs and pork continue to fall. According to data from the Ministry of Commerce, since 2012, the wholesale price of fresh pork has basically continued to fall. At the end of July 2012, the price was 19.90 yuan per kilogram, down 16.6% from 23.86 yuan in early January.

The continuous decline in the price of pork and the continuous rise in feed prices have squeezed the profits of the farming industry. According to data from the National Development and Reform Commission, after April, the pig-to-food ratio has been below the break-even point of 6.0:1, and farmers in some areas have suffered serious losses. In order to reduce the cost of farming, many companies use wheat instead of corn as feed, and many large companies are also investigating wheat as a feed substitute for corn.

It is understood that, from a technical point of view, the ratio of feedstuffs for wheat to replace corn is 30%-50%, the replacement ratio for feedstuffs for growing pigs is 50%-70%, and the replacement ratio for feedstuffs for finishing pigs is 70%-100. %. It can be seen that in terms of technology, there is no technical difficulty for wheat to replace corn in pig feed.

Feed consumption of wheat in China has increased significantly

The consumption demand of wheat in China mainly includes milling, ie producing flour, feed demand, industry and seed demand. Among them, the demand for flour milling accounts for a large proportion. Before 2010, it basically accounted for about 3/4 of the total wheat consumption. According to statistics from the National Grain and Oil Information Center, from 2010 to 2011, wheat's milling consumption accounted for 73.8% of total consumption, feed consumption accounted for 12.2%, industrial demand accounted for 9.8%, and seed demand accounted for 4.2%. Before 2011, the consumption structure of wheat has been relatively stable. However, the feed consumption of wheat in 2012 increased significantly. According to the statistics of the Grain and Oil Information Center, the feed consumption of wheat in 2011-2012 will reach 23 million tons, which is more than 70% higher than the 13.5 million tons in the previous year. The proportion of consumption as feed also rose from 12.2% in 2010-2011 to 18.8%. At the same time, according to the forecast of the Grain and Oil Information Center, the demand for wheat for food has not decreased during 2012-2013.

Imports of corn and wheat will increase significantly

In order to make up for the lack of domestic supply, China's corn and wheat imports have increased significantly. According to the forecast of the National Grain and Oil Information Center in July, China's imported corn reached 5.5 million tons in 2011-2012, an increase of 462% from the previous year's 979,000 tons; 2.49 million tons of imported wheat was up by 271% over the previous year's 795,000 tons. .

In recent years, as the consumption level of residents continues to rise, the total consumption of meat and eggs will continue to increase, and the consumption of corn will also increase. Due to the limited planting area and the increase in the cost of planting, in the long run, the increase in corn production will increase. Limited, prices will continue to rise. In the context of the sharp rise in corn prices, wheat replacement will gradually become the norm, and the increase in wheat consumption will also lead to an increase in wheat imports.