Time flies, and the traditional “Golden September and Silver October” period is nearing its end. Recently, domestic hog prices have followed a monotonous downward trend! In particular, during “Golden September and Silver October,” prices have “fallen without a break,” with the price center repeatedly breaking lower. At the beginning of 9月, quotations for standard hogs stood at 11.09 yuan/kg. However, by late 10月, the price center had retreated to 9.61 yuan/kg. The market has seen an “overly rational” decline, highlighting the fact that the peak season has failed to bring a boom! In particular, after the National Day holiday, hog prices continued their downward momentum, with prices persistently searching for a bottom!
As of 10月22日, the national average ex-farm price for lean-meat standard hogs was 9.61 yuan/kg, down 0.12 yuan from yesterday. The decline in hog prices widened, and the average price for standard hogs retreated to around 4.8 yuan/jin. The decrease compared with the same period last year widened to 16.72%. Hog fattening is suffering heavy losses; losses for some leading hog companies raising their own piglets and fattening them may exceed 260 yuan per head, while losses at smallholder farms may exceed 500 yuan per head. The market is characterized by prices that are “quick to fall and slow to rise”!
In particular, according to feedback from various regions, hog quotations across the country are “in the red” in all 7 key monitored production regions in the north and south, covering 28 monitored provinces and municipalities. Mainstream quotations fell by 0.05~0.2 yuan/kg, and the average hog price fell to a level close to that in Heilongjiang. In both northern and southern regions, mainstream hog quotations retreated to around 9.2~10.1 yuan/kg. The price center “broke through” to the downside. In particular, in East China, hog quotations generally fell to 9.8~10.1 yuan/kg, and the market is showing an unexpectedly sharp downward trend!
At present, domestic hog prices are “falling without a break.” Compared with 10.25 yuan/kg at the beginning of the month, prices have fallen by a cumulative 0.64 yuan/kg during the month, a decline of 6.24%. Hog prices have plunged, and in my view, the factors behind the decline are as follows:
In terms of weather, cold air has been moving in more frequently recently, and temperatures across northern and southern China have fluctuated sharply. This has increased the risk of stress in hog fattening, while disease outbreaks at pig farms have become more frequent. Farmers are increasingly fearful, and their willingness to sell hogs is high!
In terms of slaughter weight, the average slaughter weight of standard hogs rose to 124.33 kg last week, and the average weight of hogs increased substantially. The composition of market inventories has changed, with the proportion of medium and large hogs gradually rising in particular. Cooler weather is boosting weight gain among fattening hogs, increasing the supply of standard hogs at market weight. With supply remaining ample, the price spread between standard and heavier hogs has gradually narrowed in many regions, reducing the cost-effectiveness of holding hogs for additional weight gain and increasing farmers’ willingness to sell. In particular, hog fattening has been unprofitable for an extended period, leaving pig farms facing significant financial difficulties and increasing the need for forced sales to raise cash!
From the perspective of supply fundamentals, sow inventories stopped falling and began to rise at the end of last year, and the sow inventory base is high. Meanwhile, PSY has increased substantially, significantly restoring the number of piglets produced per sow and further intensifying the pressure from latent capacity in commercial hogs during this phase! Combined with insufficient marginal support from demand last month, large-scale pig companies’ shipment plans were not completed as expected, and production capacity lagged at pig companies in many areas. This month, the supply capacity of commercial hogs at suitable market weights has increased further, while capacity remains in the phase of being released through inertia!
According to consumer feedback, pork purchasing and sales demand has been lackluster recently. Although cooler weather has boosted expectations for market demand for pork, market feedback has been unremarkable! In particular, amid changes in residents’ consumption habits, pork’s share of demand has gradually declined. Downstream sales of white-chilled carcasses have been poor, slaughterhouse orders have contracted, and the operating rate has hovered at around 30.31%. Demand lacks clear support! In addition, last week, the frozen pork storage capacity utilization rate at sampled slaughterhouses was 31.87%. Frozen pork stocks are at a high level, further dampening market confidence in price increases. Slaughterhouses are mostly producing to match sales, providing insufficient support for market hog supplies!
Based on this analysis, amid the tug-of-war between supply and demand, hog prices are under downward pressure, with the center of gravity continuing to decline. Given the strong bearish sentiment in the market, prices may remain weak for a short while! Although some institutions remain confident that prices will rise later, in theory, hog prices may be unlikely to see any substantial improvement! Focus on changes in the pace of hog purchasing and sales at the grassroots level!
As of 10月22日, the national average ex-farm price for lean-meat standard hogs was 9.61 yuan/kg, down 0.12 yuan from yesterday. The decline in hog prices widened, and the average price for standard hogs retreated to around 4.8 yuan/jin. The decrease compared with the same period last year widened to 16.72%. Hog fattening is suffering heavy losses; losses for some leading hog companies raising their own piglets and fattening them may exceed 260 yuan per head, while losses at smallholder farms may exceed 500 yuan per head. The market is characterized by prices that are “quick to fall and slow to rise”!
In particular, according to feedback from various regions, hog quotations across the country are “in the red” in all 7 key monitored production regions in the north and south, covering 28 monitored provinces and municipalities. Mainstream quotations fell by 0.05~0.2 yuan/kg, and the average hog price fell to a level close to that in Heilongjiang. In both northern and southern regions, mainstream hog quotations retreated to around 9.2~10.1 yuan/kg. The price center “broke through” to the downside. In particular, in East China, hog quotations generally fell to 9.8~10.1 yuan/kg, and the market is showing an unexpectedly sharp downward trend!
At present, domestic hog prices are “falling without a break.” Compared with 10.25 yuan/kg at the beginning of the month, prices have fallen by a cumulative 0.64 yuan/kg during the month, a decline of 6.24%. Hog prices have plunged, and in my view, the factors behind the decline are as follows:
In terms of weather, cold air has been moving in more frequently recently, and temperatures across northern and southern China have fluctuated sharply. This has increased the risk of stress in hog fattening, while disease outbreaks at pig farms have become more frequent. Farmers are increasingly fearful, and their willingness to sell hogs is high!
In terms of slaughter weight, the average slaughter weight of standard hogs rose to 124.33 kg last week, and the average weight of hogs increased substantially. The composition of market inventories has changed, with the proportion of medium and large hogs gradually rising in particular. Cooler weather is boosting weight gain among fattening hogs, increasing the supply of standard hogs at market weight. With supply remaining ample, the price spread between standard and heavier hogs has gradually narrowed in many regions, reducing the cost-effectiveness of holding hogs for additional weight gain and increasing farmers’ willingness to sell. In particular, hog fattening has been unprofitable for an extended period, leaving pig farms facing significant financial difficulties and increasing the need for forced sales to raise cash!
From the perspective of supply fundamentals, sow inventories stopped falling and began to rise at the end of last year, and the sow inventory base is high. Meanwhile, PSY has increased substantially, significantly restoring the number of piglets produced per sow and further intensifying the pressure from latent capacity in commercial hogs during this phase! Combined with insufficient marginal support from demand last month, large-scale pig companies’ shipment plans were not completed as expected, and production capacity lagged at pig companies in many areas. This month, the supply capacity of commercial hogs at suitable market weights has increased further, while capacity remains in the phase of being released through inertia!
According to consumer feedback, pork purchasing and sales demand has been lackluster recently. Although cooler weather has boosted expectations for market demand for pork, market feedback has been unremarkable! In particular, amid changes in residents’ consumption habits, pork’s share of demand has gradually declined. Downstream sales of white-chilled carcasses have been poor, slaughterhouse orders have contracted, and the operating rate has hovered at around 30.31%. Demand lacks clear support! In addition, last week, the frozen pork storage capacity utilization rate at sampled slaughterhouses was 31.87%. Frozen pork stocks are at a high level, further dampening market confidence in price increases. Slaughterhouses are mostly producing to match sales, providing insufficient support for market hog supplies!
Based on this analysis, amid the tug-of-war between supply and demand, hog prices are under downward pressure, with the center of gravity continuing to decline. Given the strong bearish sentiment in the market, prices may remain weak for a short while! Although some institutions remain confident that prices will rise later, in theory, hog prices may be unlikely to see any substantial improvement! Focus on changes in the pace of hog purchasing and sales at the grassroots level!