Prices are falling, falling—the decline in hog prices seems “endless”! In the latter part of 10 month, domestic hog prices continued their weak, “bottoming-out” trend today, with the market’s center of gravity shifting further down. Hog farmers are facing a situation like “a dull knife slowly cutting flesh.” In particular, long-term losses from hog fattening have put mainstream farmers under varying degrees of financial pressure. More are selling their hogs and exiting the market; small independent farms are eager to sell, and some secondary-fattening operators who previously bought standard-weight pigs to replenish their stocks are also selling them, leaving ample hog supplies in circulation. However, marginal support from demand is under pressure, and hog prices lack an opportunity to rise. The market may remain in a state of “relentless decline”!
According to reports, industry organizations estimate that on 10 27, the nationwide lean-type three-way-crossThree-way crossbreedThe average price of live hogs at the farm gate is 9.29 yuan/kg, down 0.04 yuan from the previous day, and hog prices are down 22.3% year over year. The live hog market has fallen to its lowest level since the second half of the year, down a cumulative 16.23% from the peak at the beginning of last month. During the “Golden September and Silver October” months, hog prices have steadily declined, with the market showing a peak season that has failed to peak!
According to regional feedback, the live hog market is “in the red” across the 28 key monitored regions in northern and southern China! Among them, live hog quotations have fallen across the board in East China, Central China, and North China. In South China, Southwest China, Northwest China, and Northeast China, quotations have mostly remained flat, with prices rising and falling slightly in some regions! The national average farm-gate price of live hogs is close to the level in Heilongjiang. There is no significant price difference between production and sales markets in the northern and southern regions, while inverted prices are evident in some areas. In particular, live hog quotations in Southwest China have successively fallen below 9 yuan/kg, with the market showing a breakdown and further decline!
At present, domestic hog prices are falling “without end.” After the National Day holiday, the market has continued to slide, and the average live hog price has kept declining. It is now only 0.66 yuan/kg above this year's low of 8.63 yuan/kg! So, with hog prices under pressure, will they now fall below the “previous low”? The analysis is as follows:
In terms of demand, the current seasonal peak has been lackluster. Although the weather is gradually getting cooler and the Beginning of Winter solar term is approaching after Frost's Descent, the operating rate of the sampled slaughterhouses currently stands at 30.46%. Demand has changed little, and consumption lacks any substantial increase! On the one hand, dietary habits are changing, with residents consuming more low-fat foods and showing less willingness to consume pork. Meanwhile, supplies of substitutes such as beef, mutton, poultry, and aquatic products are ample, giving consumers more choices and reducing pork's share of consumption. On the other hand, with the arrival of the fourth quarter, slaughterhouses are processing and storing meat from earlier periods, and frozen products are being shipped out gradually. This is taking up market share for fresh products, further restricting shipments of fresh pork carcasses and curbing the recovery in slaughterhouse operating rates!
In terms of supply, the release of hog supplies driven by existing momentum has not yet subsided, and production capacity remains at a relatively high level for this stage! On the one hand, large-scale hog enterprises were slow to market hogs earlier, and pressure from delayed production has risen sharply this month. Planned hog marketings by sampled enterprises are up nearly 2.45% month over month (Zhuochuang data). However, large-scale hog enterprises have made slow progress toward completing their marketing plans in the first half of this month. In addition, as the risk of swine disease at hog farms rises and farming losses deepen, more smallholder farms are marketing hogs. This is limiting the marketing performance of large-scale hog enterprises. In the latter half of 10 month, large-scale hog enterprises face considerable marketing pressure, and their willingness to sell hogs is strong. On the other hand, the recent drop in temperatures has accelerated weight gain among fattening hogs. Last week, the average weight of marketed hogs reached 124.49 kilograms, while carcass weight reached 93.93 kilograms, increasing the supply capacity for pork. In addition, supplies of frozen pork have increased, further reinforcing the market's oversupply situation!
Based on this analysis, demand has shown little marginal recovery, while supply-side pressure remains strong. At month-end, large-scale hog enterprises still have relatively low marketing plans, and the imbalance between production and sales may persist, with hog prices likely to continue fluctuating downward. However, based on past experience, large-scale hog enterprises may slow their marketing pace at the end of the month and at the start of the next month, leaving limited room for a further price decline at month-end. In this round of price declines, the quoted price for standard-weight hogs may not fall below its previous low, and the bottom of hog prices may hover around 9~9.1 yuan/kilogram. Pay close attention to changes in market buying and selling activity!
According to reports, industry organizations estimate that on 10 27, the nationwide lean-type three-way-crossThree-way crossbreedThe average price of live hogs at the farm gate is 9.29 yuan/kg, down 0.04 yuan from the previous day, and hog prices are down 22.3% year over year. The live hog market has fallen to its lowest level since the second half of the year, down a cumulative 16.23% from the peak at the beginning of last month. During the “Golden September and Silver October” months, hog prices have steadily declined, with the market showing a peak season that has failed to peak!
According to regional feedback, the live hog market is “in the red” across the 28 key monitored regions in northern and southern China! Among them, live hog quotations have fallen across the board in East China, Central China, and North China. In South China, Southwest China, Northwest China, and Northeast China, quotations have mostly remained flat, with prices rising and falling slightly in some regions! The national average farm-gate price of live hogs is close to the level in Heilongjiang. There is no significant price difference between production and sales markets in the northern and southern regions, while inverted prices are evident in some areas. In particular, live hog quotations in Southwest China have successively fallen below 9 yuan/kg, with the market showing a breakdown and further decline!
At present, domestic hog prices are falling “without end.” After the National Day holiday, the market has continued to slide, and the average live hog price has kept declining. It is now only 0.66 yuan/kg above this year's low of 8.63 yuan/kg! So, with hog prices under pressure, will they now fall below the “previous low”? The analysis is as follows:
In terms of demand, the current seasonal peak has been lackluster. Although the weather is gradually getting cooler and the Beginning of Winter solar term is approaching after Frost's Descent, the operating rate of the sampled slaughterhouses currently stands at 30.46%. Demand has changed little, and consumption lacks any substantial increase! On the one hand, dietary habits are changing, with residents consuming more low-fat foods and showing less willingness to consume pork. Meanwhile, supplies of substitutes such as beef, mutton, poultry, and aquatic products are ample, giving consumers more choices and reducing pork's share of consumption. On the other hand, with the arrival of the fourth quarter, slaughterhouses are processing and storing meat from earlier periods, and frozen products are being shipped out gradually. This is taking up market share for fresh products, further restricting shipments of fresh pork carcasses and curbing the recovery in slaughterhouse operating rates!
In terms of supply, the release of hog supplies driven by existing momentum has not yet subsided, and production capacity remains at a relatively high level for this stage! On the one hand, large-scale hog enterprises were slow to market hogs earlier, and pressure from delayed production has risen sharply this month. Planned hog marketings by sampled enterprises are up nearly 2.45% month over month (Zhuochuang data). However, large-scale hog enterprises have made slow progress toward completing their marketing plans in the first half of this month. In addition, as the risk of swine disease at hog farms rises and farming losses deepen, more smallholder farms are marketing hogs. This is limiting the marketing performance of large-scale hog enterprises. In the latter half of 10 month, large-scale hog enterprises face considerable marketing pressure, and their willingness to sell hogs is strong. On the other hand, the recent drop in temperatures has accelerated weight gain among fattening hogs. Last week, the average weight of marketed hogs reached 124.49 kilograms, while carcass weight reached 93.93 kilograms, increasing the supply capacity for pork. In addition, supplies of frozen pork have increased, further reinforcing the market's oversupply situation!
Based on this analysis, demand has shown little marginal recovery, while supply-side pressure remains strong. At month-end, large-scale hog enterprises still have relatively low marketing plans, and the imbalance between production and sales may persist, with hog prices likely to continue fluctuating downward. However, based on past experience, large-scale hog enterprises may slow their marketing pace at the end of the month and at the start of the next month, leaving limited room for a further price decline at month-end. In this round of price declines, the quoted price for standard-weight hogs may not fall below its previous low, and the bottom of hog prices may hover around 9~9.1 yuan/kilogram. Pay close attention to changes in market buying and selling activity!