As 10 month draws to a close, the traditional “Golden September and Silver October” period is nearing its end! Recently, the domestic live hog market has been sluggish. Although the traditional seasonal peak in consumption has begun, supply continues to be released as a matter of course, while seasonal demand has failed to peak. With multiple factors at play, domestic pig prices have come under pressure and fallen. In particular, since the middle to latter part of 10 month, the market has been persistently “searching for a bottom.” So what is behind this round of price declines, and where is the “floor”? The analysis is as follows:
According to monitoring by an agency, as of 10 month 28, nationwidethree-way crossbreedlean-type standard hogs had an average ex-farm price of 9.23 yuan/kg, down 0.06 yuan from yesterday. The price center shifted down again, with a year-on-year decline of 24.6%, and the market showed a “plunge” in prices! The gap from this year’s low is now only 0.6 yuan/kg, and pig prices have fallen by a cumulative 9.95% within the month—prices have “fallen sharply”!
By region, among the 28 northern and southern areas in the sample monitoring, the average ex-farm live hog price is close to the 9.25 yuan/kg in Beijing, Tianjin, and Hebei. Live hog quotes in the north and south range from 8.6 to 10.8 yuan/kg. By region, most live hog quotes fell in East China, Central China, North China, Northwest China, and Northeast China, while quotes in Southwest and South China were weak but stable to slightly firmer. Ex-farm live hog quotes were generally 8.9 to 9.7 yuan/kg!
Looking at specific areas, in the northern production regions, the average ex-farm price for live hogs in Heilongjiang, Jilin, and Liaoning has now fallen to 9.1–9.3 yuan; quotes in Shanxi and Hebei are 9.05–9.25 yuan, and quotes in Shaanxi and Gansu are 8.9–9.25 yuan. In the southern market, quotes in Sichuan and Chongqing are 9–9.05 yuan; prices in Shandong and Anhui have fallen to 9.25–9.3 yuan; quotes in the Jiangsu and Zhejiang regions are 9.35–9.7 yuan; Henan quotes are 9.2 yuan; quotes in Hubei and Hunan are 9–9.1 yuan; and quotes in Guangdong and Guangxi are 9.05–10.8 yuan/kg!
Based on this analysis, on the 10th of 28, the domestic live pig market continued its persistent decline, with prices retreating again. The quoted price for standard-weight pigs fell to 9.23 yuan per kilogram. The factors behind the price decline are analyzed below:
On the supply side, based on sow inventory data for the previous 10 months, the mainstream view is that live pig supply in the fourth quarter may follow a “rise-fall-rise” pattern. In 10, planned hog marketings were relatively high! Data monitored by Zhuochuang show that this month, marketings by large-scale pig enterprises increased by 2.45% month over month. Data monitored by Mysteel show that, as of the 21th of this month, less than 62% of the monthly marketing plan for large-scale enterprises had been completed. Marketing progress has been slow, and at month-end, marketing pressure on producers remains considerable!
In addition, since the start of this month, weight gain during pig fattening has continued to accelerate, and the average live weight of marketed pigs has risen to 124.49 kilograms. Also, as seasonal changes have led to more disease at pig farms, independent producers and secondary-fattening operators have been eager to sell heavier pigs. Marketing by large pig enterprises has been constrained, making it difficult to ease supply-side pressure!
On the demand side, after the National Day holiday, pork trading returned to subdued levels. Although cooler weather has stimulated a recovery in pork consumption, growth in domestic sales and actual urban demand has been limited. So far, the operating rate of sampled slaughterhouses is 30.73%, and feedback on downstream market trading has been unremarkable! In particular, the rise in the average live weight of marketed pigs has further strengthened pork supply capacity. However, as downstream traders have reduced purchases to stabilize prices and major slaughterhouses have increased frozen pork stocks released for sale, the market spread between live and carcass prices is insufficient. Slaughterhouses therefore face little difficulty in sourcing pigs, supporting stronger pressure to lower purchase prices!
Accordingly, live pig prices have come under pressure and declined. At the end of 10, the market may continue to fluctuate downward. However, in my view, the “floor” for pig prices may hover at 9~9.1 yuan per kilogram, and the market may lack the basis for a further sharp decline! In particular, as temperatures gradually fall and the southern region approaches its peak season for curing meat, demand is expected to improve gradually at the margin, giving pig prices a chance to stop falling and recover!
According to monitoring by an agency, as of 10 month 28, nationwidethree-way crossbreedlean-type standard hogs had an average ex-farm price of 9.23 yuan/kg, down 0.06 yuan from yesterday. The price center shifted down again, with a year-on-year decline of 24.6%, and the market showed a “plunge” in prices! The gap from this year’s low is now only 0.6 yuan/kg, and pig prices have fallen by a cumulative 9.95% within the month—prices have “fallen sharply”!
By region, among the 28 northern and southern areas in the sample monitoring, the average ex-farm live hog price is close to the 9.25 yuan/kg in Beijing, Tianjin, and Hebei. Live hog quotes in the north and south range from 8.6 to 10.8 yuan/kg. By region, most live hog quotes fell in East China, Central China, North China, Northwest China, and Northeast China, while quotes in Southwest and South China were weak but stable to slightly firmer. Ex-farm live hog quotes were generally 8.9 to 9.7 yuan/kg!
Looking at specific areas, in the northern production regions, the average ex-farm price for live hogs in Heilongjiang, Jilin, and Liaoning has now fallen to 9.1–9.3 yuan; quotes in Shanxi and Hebei are 9.05–9.25 yuan, and quotes in Shaanxi and Gansu are 8.9–9.25 yuan. In the southern market, quotes in Sichuan and Chongqing are 9–9.05 yuan; prices in Shandong and Anhui have fallen to 9.25–9.3 yuan; quotes in the Jiangsu and Zhejiang regions are 9.35–9.7 yuan; Henan quotes are 9.2 yuan; quotes in Hubei and Hunan are 9–9.1 yuan; and quotes in Guangdong and Guangxi are 9.05–10.8 yuan/kg!
Based on this analysis, on the 10th of 28, the domestic live pig market continued its persistent decline, with prices retreating again. The quoted price for standard-weight pigs fell to 9.23 yuan per kilogram. The factors behind the price decline are analyzed below:
On the supply side, based on sow inventory data for the previous 10 months, the mainstream view is that live pig supply in the fourth quarter may follow a “rise-fall-rise” pattern. In 10, planned hog marketings were relatively high! Data monitored by Zhuochuang show that this month, marketings by large-scale pig enterprises increased by 2.45% month over month. Data monitored by Mysteel show that, as of the 21th of this month, less than 62% of the monthly marketing plan for large-scale enterprises had been completed. Marketing progress has been slow, and at month-end, marketing pressure on producers remains considerable!
In addition, since the start of this month, weight gain during pig fattening has continued to accelerate, and the average live weight of marketed pigs has risen to 124.49 kilograms. Also, as seasonal changes have led to more disease at pig farms, independent producers and secondary-fattening operators have been eager to sell heavier pigs. Marketing by large pig enterprises has been constrained, making it difficult to ease supply-side pressure!
On the demand side, after the National Day holiday, pork trading returned to subdued levels. Although cooler weather has stimulated a recovery in pork consumption, growth in domestic sales and actual urban demand has been limited. So far, the operating rate of sampled slaughterhouses is 30.73%, and feedback on downstream market trading has been unremarkable! In particular, the rise in the average live weight of marketed pigs has further strengthened pork supply capacity. However, as downstream traders have reduced purchases to stabilize prices and major slaughterhouses have increased frozen pork stocks released for sale, the market spread between live and carcass prices is insufficient. Slaughterhouses therefore face little difficulty in sourcing pigs, supporting stronger pressure to lower purchase prices!
Accordingly, live pig prices have come under pressure and declined. At the end of 10, the market may continue to fluctuate downward. However, in my view, the “floor” for pig prices may hover at 9~9.1 yuan per kilogram, and the market may lack the basis for a further sharp decline! In particular, as temperatures gradually fall and the southern region approaches its peak season for curing meat, demand is expected to improve gradually at the margin, giving pig prices a chance to stop falling and recover!