China's livestock companies – particularly the ones that are operating in the pig industry -- had a rough financial year in 2014, according to annual reporting numbers released in April. Of China's 13 livestock companies that are traded in the A shares market, two of them experienced net losses for the year. Of the remaining 11 companies, none earned more than CNY100 million (US$72.9 million) in net profits, stated a report provided by Smart Agriculture Analytics.
Together, these 13 Chinese livestock companies earned a total of about CNY220 million (US$247) in profit in 2014 – an amount that is less than what most leading companies would earn in a month.
The swine industry had an especially difficult time during the first half of 2014, both live hog and pork prices dropped to their lowest levels since 2006. With the prices as they were, some companies reportedly lost up to CNY300 (US$337) per head. Pig and pork prices did recover slightly during the period from July to September, but once October arrived, the market again plummeted.
While the Chinese pig industry has seen some positive signals of an economic recovery so far in 2015, the livestock companies remain cautious about their financial situations.