More than half of 10 has passed. In China’s livestock and poultry farming industry, the hog market has been sluggish since the National Day holiday, with a marked downward trend. The average price of standard hogs in China has fallen below 9.8 yuan/kg, sending the “Second Senior Brother” back to the “pre-Liberation era”!
It is reported that hog supply and demand this week saw prices fall steadily throughout the week. On the one hand, the post-holiday consumption boost faded, and demand weakened. Trading in downstream white carcasses was sluggish, slaughterhouse orders saw no increase, operating rates remained low, and average daily slaughter volumes were low, weakening demand for hogs in the market. On the other hand, hog supply was ample, the price spread between standard and heavier hogs narrowed, and more medium and large hogs were shipped. The average weight of hogs shipped rose sharply, while shipments of standard hogs became concentrated. Both independent producers and large-scale hog enterprises showed a strong willingness to sell and recover funds, leaving the supply fundamentals ample!
As the weekend approached, hog prices continued to fall briefly, and large-scale hog enterprises kept increasing shipments, deepening farming losses. This week, losses for China’s farrow-to-finish operations increased to around 217 yuan per head, and the market showed some willingness to hold prices firm. Over the past two days, large-scale hog enterprises in northern and southern regions reduced shipments, while social farms became somewhat more inclined to wait and see. Supply pressure eased temporarily, the pace of further hog price declines slowed, and the market briefly reached an impasse!
However, the mainstream view is that hog prices will struggle to reverse their downward trend completely. Next week, the domestic live hog market will most likely remain volatile and weak!
On the one hand, there is little opportunity for a significant increase in pork consumption. In the middle to latter part of 10 month, with no boost from holiday effects, pork buying and selling are expected to remain at a steady level, and downstream purchases and sales of fresh pork carcasses are unlikely to increase much! In particular, pork supplies are ample, and traders are maintaining purchases to meet basic demand. Demand from households and urban consumers may see only limited growth, offering little support for hog prices;
On the other hand, supply remains loose! At present, the structure of the domestic live hog inventory is changing, with more large hogs in the market. In addition, the spread between standard-weight and heavier hog prices has narrowed, reducing the willingness of secondary fattening operations to enter the market. Meanwhile, long-term losses from hog fattening have left farming operations short of funds, and the need to replenish cash remains strong. Combined with the increased risk of disease at pig farms due to seasonal changes, pressure on the supply side remains high!
Based on this analysis, amid the tug-of-war between supply and demand, the market may remain volatile and weak in the short term! According to the latest information, following price adjustments by slaughterhouses, on 18 10 the live hog market's quoted price for standard-weight hogs may hover around 9.81 yuan/kg!