As 10 moves into its latter part, the domestic livestock and poultry farming sector is seeing ongoing supply-demand imbalances in the hog market, particularly between production and sales. Hog prices remain in a low-level tug-of-war, and the market continues to face pressure and adjust weakly. According to the data, at the start of the National Day holiday, the quoted price for standard-weight hogs briefly rose to 10.25 yuan/kg. However, as the holiday atmosphere faded, marginal support from demand weakened, while the pace of marketings from farms recovered. Hog prices resumed their decline, and the market continued to trend downward. Currently, the quoted price for standard-weight hogs in the three-way crossbreed category has fallen to 9.61 yuan/kg. Hog prices have hit a new low for this stage, reaching their lowest level since the second half of the year!
At present, the hog market is seeing both “weak fundamentals and strong expectations”! Reports indicate that at the end of the third quarter, the national breeding sow herd had fallen to 3602 ten thousand head, down 10.7% year on year. Compared with 3780 ten thousand head at the end of the second quarter, this was a decrease of 178 ten thousand head, indicating a clear acceleration in capacity reduction! This was mainly due to weak piglet market conditions and deepening losses from breeding sows kept for fattening. The market shifted from culling sows involuntarily to doing so proactively, with low-priced sows coming to market in concentrated numbers. The domestic target for reducing the breeding sow herd was exceeded! In light of changes in the sow herd, market confidence in the outlook for hog prices in the third quarter of next year is gradually strengthening. However, the hog market is still facing pressure from “weak fundamentals” at this stage!
On the one hand, the concentrated culling of less productive sows is holding back demand for standard-weight hogs. In addition, seasonal peak demand has been underwhelming, and pork trading lacks support! In particular, since the start of this month, as the holiday atmosphere has faded, pork trading has become quiet again. Although the weather has turned cooler, growth in demand in the domestic market and cities remains limited. Currently, the operating rate of slaughterhouses is hovering around 30.3%, with demand lacking support and downstream markets unable to absorb hog sales effectively!
On the other hand, oversupply has become more pronounced! Due to disease outbreaks at pig farms and the accelerated culling of sows, pressure from market hog shipments has surged, especially as shipment plans fell short of completion last month, while the number of breeding sows stopped declining and rebounded 10 months ago. Moreover, the sow population is at a high level, and production efficiency has increased significantly, further expanding supply this month!
In addition, market hog weights have risen recently, and the pace of weight gain during finishing has accelerated. With domestic frozen pork inventories also high, pressure from multiple sources has been realized at once, and the live hog market has seen a sharper-than-expected decline!
According to the latest information, following price adjustments by slaughterhouses, the average ex-farm price of live pigs of the three-way crossbreed is expected to be 9.51 yuan per kilogram on 10 month 23. The market’s purchasing and selling pace will be worth watching going forward!