【申万食品&农业】Animal Husbandry Update Recommendation

English summary

# Raw milk prices stabilize and rebound, capacity clearing continues. As of mid-to-late July, contract milk price in major producing areas recovered to 3.05 yuan/kg, the highest level since 25Q3, slightly rising in off-season, possibly confirming that raw milk prices have begun to move out of bottom range. In June, dairy cow capacity continued to decline, with inventory falling about 22,000 heads per month, down more than 150,000 heads since the beginning of the year, down about 12% from cycle peak, further enhancing certainty of supply-side contraction. According to data from Shandong Dairy Association, in June bulk milk mainstream price has risen to 2.8-3.1 yuan/kg, some areas exceeding 3 yuan/kg, and the spread between bulk milk and contract milk has basically been erased. # The bottom of this cycle's milk price has been confirmed, and we are optimistic about a definite turning point in this milk price cycle in H2. # Beef cattle prices stabilize in off-season, and a new round of increase may follow. As of late July, national average price of fattening bulls was 27.2 yuan/kg; beef cattle prices have been steady in the past two months, with a year-on-year increase of about 6%. Referring to past experience, from mid-to-late August, as demand gradually recovers, beef cattle prices are expected to start a new round of increase within the year. ...