March 27, 2025

 

China's pig industry rebounds: Profits surge in 2024

 

In January 2025, most listed pig companies in China that released their 2024 preliminary performance reports recorded significant increases in profits, recovering from deficits in recent years.

 

Muyuan projected a sales revenue of ¥136.225 billion (US$18.9 billion) in 2024 and a net profit attributable to shareholders of listed companies of ¥17-¥18 billion (US$2.36-$2.5 billion), up 499% to 522%, respectively, compared with a loss of ¥4.263 billion (US$592.3 million) in 2023.

 

Meanwhile, Wen's estimated an operating income of more than ¥100 billion (US$13.9 billion) in 2024, with net profit attributable to the parent company expected to reach ¥9-¥9.5 billion (US$1.25-$1.32 billion). This marks the highest performance in the past five years, representing a year-on-year increase of 241% to 249%, respectively.

 

New Hope Liuhe projected its net profit attributable to shareholders of the listed company to range from ¥450-¥550 million (US$62.5-$76.4 million) in 2024, up from ¥249 million (US$34.6 million) in the previous year. This represents a remarkable growth of 80.58% to 120.71%, respectively.

 

Haida Group is also anticipating strong performance in 2024, with record-setting feed sales, pig production, and net profit attributable to the parent company. Annual feed sales (in terms of volume) were estimated at 26.5 million tonnes, while pig release volume was forecast to exceed 5.77 million heads. The group's net profit was projected to range between ¥4.25-¥4.8 billion (US$590-$666 million).

 

Additionally, both Lihua and Tianbang are expected to report profits exceeding ¥1 billion (US$139 million) in 2024.

 

Juxing Agriculture and Animal Husbandry issued an announcement stating that it expects a net profit attributable to the parent company of ¥480-¥550 million (US$66.7-$76.4 million) in 2024, a sharp turnaround from the net loss of ¥645 million (US$89.7 million) recorded in the same period last year.

 

Factors driving performance growth

 

The positive performance outlook for those companies can be attributed to several key factors.

 

Secondly, reduced prices for feed raw materials and effective energy cost management have significantly lowered breeding expenses. In 2024, both soybean meal and corn prices saw declines. CBOT soybean futures fell by 22%, while domestic soybean meal futures on the Dalian Commodity Exchange dropped by 19%.

 

With supplies increased and demand lower, corn prices slid modestly as well. Higher pork prices, combined with lower breeding costs, have positively impacted profit margins. Additionally, companies have optimised their breeding structures and enhanced production efficiency, leading to a substantial increase in the number of pigs slaughtered and resulting in higher revenue.

 

Gross profit margins and breeding costs

 

For Muyuan, the full cost of pig farming declined throughout 2024, falling to about ¥13/kg (US$1.81/kg) in December, a decrease of ¥2.8/kg (US$0.39/kg) from the start of the year.

 

Currently, the company has further lowered the cost of pig farming to ¥11.38/kg (US$1.59/kg). These reductions were achieved through optimised feed formulas, improved feed utilisation, enhanced disease control, and other measures, significantly boosting the company's gross profit margin and overall profitability.

 

Similarly, Wen's breeding costs have decreased sharply year-on-year, contributing to a notable increase in profits from its pig farming business. By strengthening feed procurement management, optimising breeding processes, and improving production efficiency, Wen's has effectively lowered its breeding costs and improved its gross profit margin.

 

Technological innovation and efficiency gains

 

Technological advancements have played a critical role in improving production efficiency. For example, Muyuan has embraced artificial intelligence technology, integrating it into traditional pig farming practices.

 

The development of intelligent farming equipment and systems has improved production and labor efficiency. These systems enable real-time environmental monitoring, precise feeding, and disease alerts, optimising breeding efficiency and improving pig health. Other companies, such as Wen's and New Hope, are also ramping up investments in technology to further upgrade breeding practices and enhance production efficiency.

 

Industry trends and future outlook

 

While the recovery of pig prices in 2024 has propelled the pig breeding industry's recovery, further supply expansion in 2025 could lead to potential price pressures.

 

Even with demand growing in tandem, price hikes will be mild at best. Consequently, pig producers will have to focus on cost control and efficiency improvements to maintain their competitive edge.

 

About EFL AG-DATA

EFL AG-DATA is a startup incubated by Singapore's Nanyang Technological University's Innovation and Enterprise Company (NTUitive) Incubator Program. It is developing an agricultural hub that will revolutionize the feed-to-meat supply chain in China and Southeast Asia countries through data-driven solutions. EFL's mission is to empower farms through innovative data-based services that solve complex problems and enhance productivity.

 

- EFL AG-DATA