Cyclical, regional and seasonal characteristics of the industry
(1) Periodicity
Market demand is basically the same as that of the feed industry, while the market demand situation of the feed industry and its changes are directly affected by the downstream aquaculture industry, and ultimately depends on the diet structure of the population and the consumption of meat and other products. China is a country with a large population. With the continuous growth of population and the continuous improvement of people's consumption level, the demand for livestock, poultry and aquatic products will remain at a high level and remain stable. The huge demand for animal food will promote the development of livestock, poultry and aquaculture industry, thus stimulating the growth of feed industry.
Judging from the changes in feed production over the past decade, China's feed production has maintained a steady growth. However, in the short term, the demand for feed and feed additive products will change due to fluctuations in the downstream aquaculture industry. Taking pig feed as an example, the cyclical fluctuation characteristics of China's pig breeding industry are more obvious, which makes the demand for pig feed and feed additives fluctuate to a certain extent. There is a pig cycle in the pig farming industry, that is, "insufficient supply of pork-rising pork prices-excessive increase in pig stocks-excess supply of pork-falling pork prices-excessive reduction in pig stocks due to losses by farmers-insufficient supply of pork" cycle. The "pig cycle" has a certain impact on the pig feed industry, when the pig stock reaches a high level, the demand for pig feed is strong.
(2) Regional
As downstream feed enterprises are affected by the economic transportation radius, in order to reduce transportation costs and enhance competitiveness, large feed enterprises generally adopt the production and operation mode of "widely set up factories and sell nearby", so feed production and operation have certain regional characteristics. According to the Ministry of Agriculture and Rural Affairs's "Overview of the Development of the National Feed Industry in 2021", there are 13 provinces with a feed output of more than 10 million tons in 2021, namely Shandong, Guangdong, Guangxi, Liaoning, Jiangsu, Henan, Sichuan, Hebei, Hubei, Hunan, Anhui, Fujian and Jiangxi. The company's products mainly serve feed enterprises and terminal breeding enterprises, so the regional distribution of the sales network is relatively close to the regional distribution of feed enterprises, the national market has been fully covered.
(3) Seasonality
Influenced by the market consumption of livestock products and the seasonal characteristics of the growth of farmed animals, there is seasonality in the consumption market of feed and feed additives in China. The seasonal consumption market of poultry and livestock products is mainly manifested as follows: strong consumption before major festivals, and weak consumption usually occurs after festivals. In addition, according to the consumption habits of the Chinese people, the second half of the year and the Spring Festival are the peak sales seasons for livestock and poultry meat products. Therefore, the third and fourth quarters are the peak sales seasons for the industry, and the sales revenue accounts for a relatively high proportion.