According to China Pig Farming Network data, on 10 month 16 day, the national live hogs (three-way crossbred) The price was reported at 9.88 yuan per kilogram, once again falling below the 10-yuan threshold. The Mid-Autumn Festival and National Day holidays, which had been widely anticipated, failed to bring the expected rebound. After briefly recovering from 10.06 yuan per kilogram at the end of 9 to 10.31 yuan per kilogram on 10 6, hog prices turned downward, and the live hog market saw “a peak season that failed to peak.”
The secondary market, however, moved in the “opposite” direction. In early trading on 10 19, pork-related stocks rose across the board: Shengnong Development gained more than 6%, while Lihua Corporation, Tianbang Foods, Tiankang Biotech, Shennong Group and others also advanced. The CSI Livestock and Poultry Farming Index, tracked by the China Merchants CSI Livestock and Poultry Farming ETF (516670), rose 1.25%.
Industry insiders believe that the combination of three pressures has pushed the sector into an exceptionally prolonged period of bottoming out.
First, the peak season has been underwhelming, with seasonal demand elasticity on the consumer side clearly weakening. During the stocking window for the two holidays, hog prices recorded only a slight three-day rebound before falling again. Experts from the Ministry of Agriculture and Rural Affairs believe that hog supply is currently relatively ample, while end-market consumption has declined temporarily; hog prices may fluctuate slightly in the short term.Hog-to-feed ratioThe ratio also remained below the 6:1 breakeven point, leaving pig farmers in a state of widespread losses.
Second, the duration of losses has set a record, and cash flow pressure is approaching a critical point. GF Securities noted that the national average hog price in 9 month was 10.49 yuan/kg, and the industry’s cumulative loss period had reached one year. Another institution estimated that the cash flow loss cycle in the farming industry had exceeded 8 months, setting a record for the longest continuous period of losses. China Galaxy Securities data showed that on 24 9 month, the profits from self-bred and self-raised hogs and from piglets purchased for fattening were -205.66 yuan/head and -117.99 yuan/head, respectively, with losses widening further compared with mid-9 month.
Third, capacity reduction has entered the “deep-water zone,” and willingness to replenish stocks has fallen to rock bottom. At the end of the second quarter, the national breeding sow inventory stood at 3780 ten thousand head, down 263 ten thousand head year on year, a decrease of 6.5%, equivalent to 100.8% of the normal inventory level. Caitong Securities data showed that breeding sow inventory fell a further 0.86% month on month in 9, and the reduction trend continued.
The price signal is more straightforward. As of 9 month 29, 7 kilograms of weanedpigletPig pricesfell to 118 yuan per head, down 44.3% year over year, reaching a new low for the year and nearing the historical low in 2023; 50-kilogram binary sowsPig prices1295 yuan/head, down 18.5% year-on-year; cull sowsPig prices7.39 yuan/kg, down 13.7% year over year. Prices for piglets, sows, and cull sows all fell, indicating that farmers are not only reducing capacity but may also have stopped stocking up for the next cycle.
The secondary market, however, moved in the “opposite” direction. In early trading on 10 19, pork-related stocks rose across the board: Shengnong Development gained more than 6%, while Lihua Corporation, Tianbang Foods, Tiankang Biotech, Shennong Group and others also advanced. The CSI Livestock and Poultry Farming Index, tracked by the China Merchants CSI Livestock and Poultry Farming ETF (516670), rose 1.25%.
Industry insiders believe that the combination of three pressures has pushed the sector into an exceptionally prolonged period of bottoming out.
First, the peak season has been underwhelming, with seasonal demand elasticity on the consumer side clearly weakening. During the stocking window for the two holidays, hog prices recorded only a slight three-day rebound before falling again. Experts from the Ministry of Agriculture and Rural Affairs believe that hog supply is currently relatively ample, while end-market consumption has declined temporarily; hog prices may fluctuate slightly in the short term.Hog-to-feed ratioThe ratio also remained below the 6:1 breakeven point, leaving pig farmers in a state of widespread losses.
Second, the duration of losses has set a record, and cash flow pressure is approaching a critical point. GF Securities noted that the national average hog price in 9 month was 10.49 yuan/kg, and the industry’s cumulative loss period had reached one year. Another institution estimated that the cash flow loss cycle in the farming industry had exceeded 8 months, setting a record for the longest continuous period of losses. China Galaxy Securities data showed that on 24 9 month, the profits from self-bred and self-raised hogs and from piglets purchased for fattening were -205.66 yuan/head and -117.99 yuan/head, respectively, with losses widening further compared with mid-9 month.
Third, capacity reduction has entered the “deep-water zone,” and willingness to replenish stocks has fallen to rock bottom. At the end of the second quarter, the national breeding sow inventory stood at 3780 ten thousand head, down 263 ten thousand head year on year, a decrease of 6.5%, equivalent to 100.8% of the normal inventory level. Caitong Securities data showed that breeding sow inventory fell a further 0.86% month on month in 9, and the reduction trend continued.
The price signal is more straightforward. As of 9 month 29, 7 kilograms of weanedpigletPig pricesfell to 118 yuan per head, down 44.3% year over year, reaching a new low for the year and nearing the historical low in 2023; 50-kilogram binary sowsPig prices1295 yuan/head, down 18.5% year-on-year; cull sowsPig prices7.39 yuan/kg, down 13.7% year over year. Prices for piglets, sows, and cull sows all fell, indicating that farmers are not only reducing capacity but may also have stopped stocking up for the next cycle.