This Tuesday, in China’s live hog market, as 10 began, at the start of the National Day holiday, the festive atmosphere boosted people’s movement and revived group catering demand in various regions. Large-scale pig producers reduced shipments, briefly sending hog prices higher, with standard hogs quoted at 10.25 yuan/kg. Unfortunately, as the festive mood faded, large-scale pig producers had fallen short of their shipment plans for the previous month. During the National Day holiday, some leading pig producers gradually resumed shipments, and hog prices fell again. After the holiday, demand also declined as expected, further highlighting the pressure from excess supply, and hog prices gradually retreated to 9.79 yuan/kg!
Although large-scale pig producers briefly reduced shipments last weekend amid shifts in market sentiment, and hog prices resumed rising, this latest price increase is unlikely to last. The latest news indicates that the live hog market has undergone a “major change,” and the decline in hog prices is “unstoppable.” So, what is the “floor” for hog prices in this phase? An analysis follows:
According to cited data monitoring, across the 7 key monitored production regions nationwide and the 28 provinces and cities covered by monitoring, the national average price for live hog shipments is 9.81 yuan/kg, down 0.05 yuan from yesterday. Hog prices have “turned from rising to falling,” and price declines are spreading across more regions in both northern and southern China. Market sentiment has weakened again. Hog prices remain at a seasonal low, down more than 12.7% year over year! The prevailing view is that the shipment costs of leading and larger pig producers in China are generally 11.5~12.5 yuan/kg. However, with the average live hog price falling below 10 yuan/kg, pig farming has entered a period of deep losses, with mainstream farrow-to-finish operations losing nearly 220 yuan per head!
Currently, live hog quotations in China are under downward pressure. Across northern and southern regions, live hogs are quoted at 8.95~11.2 yuan/kg, with Xinjiang at the lowest and Guangdong at the highest. In most regions of both northern and southern China, live hog shipment prices are generally around 9.4~10.2 yuan/kg, with limited regional price differences. Some production regions still face pressure from an inversion between production and sales markets! For example, quotations in the Sichuan-Chongqing market are 9.4 yuan/kg, while Heilongjiang is at 9.8 yuan/kg. In traditionally high-priced regions, quotations in Jiangsu and Zhejiang are only 10.1~10.2 yuan/kg. Regional price differences are limited, hindering cross-regional live hog transportation, so the market mainly relies on local consumption! However, due to regional differences in the prices of heavier hogs,hog pricesthere are notable differences, and medium and large hogs are moving between regions!
As 10 month moves into its latter part, hogpricesremain sluggish, and hog prices are once again under downward pressure. The logic behind the price decline is analyzed as follows:
On the demand side, current mainstream domestic consumer markets include Beijing and Shanghai. In Beijing, the mainstream transaction price for white-stripe pork at wholesale markets rose by 0.1 to 0.3 yuan. The recent cold air has caused temperatures to drop sharply, improving enthusiasm for pork buying and selling to some extent. In Shanghai, white-stripe pork quotations were steady at around 12.4 yuan/kg. Market arrivals declined, while feedback on buying and selling was average. Pork buying and selling are currently in a phase of bottoming out and recovering. Cooler weather may stimulate household demand, but as tourism consumption cools, urban consumption remains relatively fixed, so the increase in demand is limited. According to institutional research, the operating rate of surveyed slaughterhouses is currently 30.4%, up 0.03 percentage points from the previous day. Slaughterhouse orders are increasing slowly, but the growth rate is extremely slow. Marginal demand support is limited, and its impact on hog prices is also somewhat insufficient.
On the supply side, large-scale hog farming companies briefly reduced marketings over the weekend. At the start of this week, more leading companies in several areas of Southwest, East, and Central China offered hogs for sale, leaving hog circulation conditions loose. In particular, planned hog marketings are relatively high in 10 month. As the month enters its latter part, some companies may have completed their marketing plans or fallen short of expectations, and may step up marketings at month-end. In addition, prolonged losses in hog farming have put severe financial pressure on producers. Some companies have a greater need to recover funds, while sharp temperature fluctuations have led to more disease outbreaks on farms. These factors have further increased producers’ willingness to market hogs, leaving the fundamentals of hog supply loose.
Overall, hog marketings are accelerating, while demand has improved slightly. However, the supply-demand imbalance has not yet been reversed, and hog prices continue to fluctuate downward. In theory, hog prices may remain weak in the latter part of 10 month, but there may be limited room for further declines. Prices may be unlikely to fall below 9.5 yuan/kg this time. In particular, cold air activity is gradually becoming more frequent, which may improve marginal support from pork consumption. Market confidence in the outlook may recover, and support for the bottom of hog prices may gradually strengthen. Pay close attention to changes in the pace of market buying and selling.
Although large-scale pig producers briefly reduced shipments last weekend amid shifts in market sentiment, and hog prices resumed rising, this latest price increase is unlikely to last. The latest news indicates that the live hog market has undergone a “major change,” and the decline in hog prices is “unstoppable.” So, what is the “floor” for hog prices in this phase? An analysis follows:
According to cited data monitoring, across the 7 key monitored production regions nationwide and the 28 provinces and cities covered by monitoring, the national average price for live hog shipments is 9.81 yuan/kg, down 0.05 yuan from yesterday. Hog prices have “turned from rising to falling,” and price declines are spreading across more regions in both northern and southern China. Market sentiment has weakened again. Hog prices remain at a seasonal low, down more than 12.7% year over year! The prevailing view is that the shipment costs of leading and larger pig producers in China are generally 11.5~12.5 yuan/kg. However, with the average live hog price falling below 10 yuan/kg, pig farming has entered a period of deep losses, with mainstream farrow-to-finish operations losing nearly 220 yuan per head!
Currently, live hog quotations in China are under downward pressure. Across northern and southern regions, live hogs are quoted at 8.95~11.2 yuan/kg, with Xinjiang at the lowest and Guangdong at the highest. In most regions of both northern and southern China, live hog shipment prices are generally around 9.4~10.2 yuan/kg, with limited regional price differences. Some production regions still face pressure from an inversion between production and sales markets! For example, quotations in the Sichuan-Chongqing market are 9.4 yuan/kg, while Heilongjiang is at 9.8 yuan/kg. In traditionally high-priced regions, quotations in Jiangsu and Zhejiang are only 10.1~10.2 yuan/kg. Regional price differences are limited, hindering cross-regional live hog transportation, so the market mainly relies on local consumption! However, due to regional differences in the prices of heavier hogs,hog pricesthere are notable differences, and medium and large hogs are moving between regions!
As 10 month moves into its latter part, hogpricesremain sluggish, and hog prices are once again under downward pressure. The logic behind the price decline is analyzed as follows:
On the demand side, current mainstream domestic consumer markets include Beijing and Shanghai. In Beijing, the mainstream transaction price for white-stripe pork at wholesale markets rose by 0.1 to 0.3 yuan. The recent cold air has caused temperatures to drop sharply, improving enthusiasm for pork buying and selling to some extent. In Shanghai, white-stripe pork quotations were steady at around 12.4 yuan/kg. Market arrivals declined, while feedback on buying and selling was average. Pork buying and selling are currently in a phase of bottoming out and recovering. Cooler weather may stimulate household demand, but as tourism consumption cools, urban consumption remains relatively fixed, so the increase in demand is limited. According to institutional research, the operating rate of surveyed slaughterhouses is currently 30.4%, up 0.03 percentage points from the previous day. Slaughterhouse orders are increasing slowly, but the growth rate is extremely slow. Marginal demand support is limited, and its impact on hog prices is also somewhat insufficient.
On the supply side, large-scale hog farming companies briefly reduced marketings over the weekend. At the start of this week, more leading companies in several areas of Southwest, East, and Central China offered hogs for sale, leaving hog circulation conditions loose. In particular, planned hog marketings are relatively high in 10 month. As the month enters its latter part, some companies may have completed their marketing plans or fallen short of expectations, and may step up marketings at month-end. In addition, prolonged losses in hog farming have put severe financial pressure on producers. Some companies have a greater need to recover funds, while sharp temperature fluctuations have led to more disease outbreaks on farms. These factors have further increased producers’ willingness to market hogs, leaving the fundamentals of hog supply loose.
Overall, hog marketings are accelerating, while demand has improved slightly. However, the supply-demand imbalance has not yet been reversed, and hog prices continue to fluctuate downward. In theory, hog prices may remain weak in the latter part of 10 month, but there may be limited room for further declines. Prices may be unlikely to fall below 9.5 yuan/kg this time. In particular, cold air activity is gradually becoming more frequent, which may improve marginal support from pork consumption. Market confidence in the outlook may recover, and support for the bottom of hog prices may gradually strengthen. Pay close attention to changes in the pace of market buying and selling.