As 10 moves into its latter part, the domestic live pig market has seen prices fall “out of control” during the month. This is due to a month-on-month increase in supply-side marketings, while demand has fallen sharply month on month. The imbalance between production and sales has become more pronounced, and the domestic live pig market has become mired in a “bottoming-out” slump, with breeding losses continuing to deepen! Although the market is confident that prices will rise in the future, pressure from both supply and demand suggests that prices may continue to fluctuate downward at the end of 10. As for the outlook for pig prices in 11, some institutions believe that there is little prospect of any substantial improvement, and that the price rise may fall short of expectations. The details are as follows:
As of 10 27, the average national ex-farm price for lean-type, three-way crossbred pigs ready for slaughter today is 9.29 yuan/kg, down 0.04 yuan from yesterday. Pig prices continue to trend weakly, down 0.96 yuan from the peak at the beginning of the month. Prices have plunged by nearly 9.4%, showing a larger-than-expected decline! In particular, with no clear support in the market, pig prices are still in the process of seeking a bottom!
By region, among the 28 key areas monitored across the north and south of the country, hog prices are mostly weaker in East China, Central China, and North China, while prices are mainly steady in Northeast China, Southwest China, and South China, with scattered adjustments up and down. The national average hog price at the farm gate is close to Heilongjiang’s 9.3 yuan/kg. Hog prices across the north and south are hovering at 8.55~10.8 yuan/kg, with mainstream prices at around 9~9.8 yuan/kg.
Currently, in northern China, the market in Northeast China has stabilized, with prices in Heilongjiang, Jilin, and Liaoning at 9.1~9.3 yuan/kg. The North China market has adjusted weaker, with prices in Shanxi and Hebei at 9.2~9.45 yuan. The Northwest China market is fluctuating within a range, with prices in Shaanxi and Gansu at 9~9.4 yuan/kg. In southern China, hog prices in Southwest China are weak but steady, with prices in Sichuan and Chongqing at 8.95~9 yuan/kg and prices in Yunnan and Guizhou at 8.65~9.1 yuan. In East China, hog prices are mostly lower, with prices in Shandong and Anhui at 9.45~9.55 yuan and prices in Jiangsu and Zhejiang at 9.45~9.8 yuan. In Central China, prices in Henan are 9.4 yuan, and prices in Hubei and Hunan are 9.1~9.3 yuan. In South China, prices in Guangdong and Guangxi are 8.95~10.8 yuan/kg.
Accordingly, on the 10 month 27, hog prices came under pressure and fell, with the market continuing its broadly weak trend. At present, hog prices face pressure from both supply and sales!
On the supply side, hog supplies have increased rather than decreased. Group hog companies have increased their planned marketings month on month. According to institutional research, as of the 10 month 21, the average marketing progress of domestic large-scale hog companies this month stood at 61.96%, and monthly marketing plans were falling well short of completion! On the one hand, weather-related factors have led to more disease outbreaks at hog farms, increasing producers’ willingness to market. Increased marketings from independent farms have dampened sales performance by group hog companies. On the other hand, demand is recovering only slowly at the margin, while domestic frozen pork inventories remain high. Frozen pork will be released successively in the fourth quarter, restricting the purchase and sale of fresh pork. Meanwhile, the average liveweight of marketed hogs has risen, increasing pork production capacity and further suppressing the pace of marketings by producers. As a result, under the influence of multiple factors, pressure from hog supplies will remain substantial in the short term;
On the demand side, demand has continued to weaken since the National Day holiday, and the market has returned to a subdued state. In particular, changes in dietary habits, adjustments to the domestic population structure, and changes in labor-intensive industries have led to a decline in the concentration of pork consumption. As domestic consumers widely substitute other products in household demand, poultry, eggs, and aquatic products offer better value for money, weakening pork consumption. In addition, frozen pork inventories remain high, the market has faced resistance to a rebound in white carcass prices, and the price spread between live hogs and carcasses at slaughterhouses has narrowed periodically. More slaughterhouses are setting production according to sales, while operating rates have struggled to rise.
Based on this analysis, under pressure from both supply and demand, domestic hog prices have come under pressure and fallen, with the market continuing its gradual downward trend. At the end of 10 month, the market may remain subdued, with prices mainly bottoming out gradually. After entering 11 month, although demand may recover slowly at the margin, this month's planned hog sales by major corporate producers may fall short of expectations, and some production capacity may be marketed later than planned. In addition, the earlier base of breeding sow inventories was high, production capacity has become more efficient, and the average weight of hogs marketed has risen. Supply-side pressure will remain considerable in 11 month. This may dampen expectations of a market rebound. Hog prices in 11 month may see no substantial improvement. Pay close attention to changes in market sentiment, particularly changes on the demand side.