The hog market has remained under pressure recently, with the downward trend intensifying further! According to the monitoring data on livestock products and feed from rural trade markets for week 3 of month 10, released by the Animal Husbandry and Veterinary Bureau of the Ministry of Agriculture and Rural Affairs, national hog and piglet prices are accelerating their decline to the bottom, and industry losses have widened again. Under the farrow-to-finish model, losses per head have widened again to 335 yuan. Operating pressure on producers continues to mount, highlighting market risk warning signals.
Specifically, the national average price of live pigs in week 3 of 10 was 10.71 yuan/kg, down a further 1.7% from the previous week, marking a decline for 7 consecutive weeks. Piglet prices also fell at an accelerating pace. Data show that the national average price of piglets in week 3 of 10 was 18.45 yuan/kg, with a single-week drop of 3.1%, marking a decline for 13 consecutive weeks. In contrast, feed prices remained relatively strong. In week 3 of 10, the average price of compound feed for fattening pigs was 3.37 yuan/kg, up 0.3% year on year.
Current pig farming costs are providing strong rigid support. Amid the pattern of “falling pig prices and rising costs,” farming profits are being continuously squeezed, putting cash flow under pressure for many small and medium-sized farmers. Large pig farming groups have likewise not been spared: among the leading pig farming companies that have published their reports for the first three quarters, only 10 of the 2 were profitable. They were Haid Group and Lihua Corporation, and their profitable business was not pig farming.
The share of loss-making businesses in the industry continues to grow, and deepening losses will also force inefficient production capacity to exit more quickly, creating conditions for a subsequent recovery in the hog cycle. At the end of the third quarter, the breeding sow inventory had already fallen below the normal level, but the effects of capacity reduction will take several months to reach the market hog slaughter stage. As a result, short-term supply pressure is unlikely to ease quickly, and the market lacks the basis for a rapid reversal in the near term.
On the demand side, the market had originally hoped that seasonal consumption would recover as buyers stocked up on cured meat, but consumption has been slower to pick up at this stage. The increase in end-consumer pork consumption has fallen short of expectations, and wholesale market sales have been lackluster, making it difficult to provide effective support for depressed pig prices. With strong supply and weak demand, pig prices continue to test the bottom, and the window for a market rebound has been repeatedly pushed back.
The Ministry of Agriculture and Rural Affairs has also repeatedly reminded pig farmers to view fluctuations in the pig cycle rationally, and not to blindly buy pigs at the bottom of the market, replenish their herds, or hold back pigs from sale. This will help avoid increasing investment during a downturn and further amplifying business risks.