As the end of 10 approaches, the domestic hog market is facing a supply-demand mismatch. The imbalance between production and sales is difficult to reverse: supply continues to exert pressure, while demand provides little support. Strong supply and weak demand are clearly evident, and domestic hog prices have been battered! During the traditional seasonal peak for pork consumption—the “golden September and silver October” period—the hog market has seen a “cliff-like” decline. Reportedly, at the start of last month, domestic prices for standard hogs briefly rebounded to around 11.09 yuan/kg. However, the expected pre-holiday price increase failed to materialize. With the market peak falling short of expectations, prices gradually retreated. At the end of 9, prices for standard hogs fell below 10 yuan/kg. In 10, prices briefly rose to 10.25 yuan/kg at the start of the month, but demand came under marginal pressure as supply pressure continued to be released through market inertia. The market remained sluggish, and prices plunged “cliff-like”!
As of 10 30, institutional data showed that the national average ex-farm price for lean-type standard hogs (three-way crossbred) was 9.08 yuan/kg, down another 0.08 yuan from the previous day. Hog prices remained weak near the bottom, with the average price approaching 4.5 yuan/jin. After dropping into the “4-yuan era,” prices continued to fall. They were down nearly 18% cumulatively from the start of last month, with the price level declining from 11 yuan to 9 yuan/kg. The market’s “cliff-like” downward trend was pronounced!
According to the latest information, the hog market was broadly lower across the 28 northern and southern regions under nationwide key monitoring. In the north, prices in the Northeast market—Heilongjiang, Jilin, and Liaoning—fell to 8.9~9.2 yuan/kg. In the North China market, prices in Shanxi and Hebei were 8.9~9.05 yuan/kg, while prices in Shaanxi and Gansu in the Northwest fell to 8.8~9.2 yuan/kg. In the south, prices in Sichuan and Chongqing in the Southwest were 8.85~9 yuan/kg, while prices in Yunnan and Guizhou were 8.5~9.05 yuan. In East China, prices in Shandong and Anhui were 9.1~9.15 yuan, and prices in Jiangsu and Zhejiang were 9.15~9.45 yuan. In Central China, prices in Henan were 9.05 yuan, while prices in Hubei and Hunan were 8.85~9.15 yuan. In South China, prices in Guangdong and Guangxi were 9.05~10.55 yuan/kg!
Accordingly, at present, most of the 7 production regions across northern and southern China are seeing continued declines in the hog market. The number of regions where the average hog price has fallen below 9 yuan/kg has increased significantly. In the high-priced East China market, quotations have generally fallen to around 9.15 yuan/kg, and the market's price center continues to move lower. The following is an analysis of the factors supporting the decline in hog prices:
On the demand side, an analysis of the consumer market shows that, at present, in major domestic cities, the quotation for dressed pork in Beijing has fallen by 0.1 yuan. Pork trading in the market is ordinary, and sales are not moving smoothly. In Shanghai, dressed pork quotations have stabilized at 12~12.2 yuan/kg. Arrivals at wholesale markets have decreased, and trading in dressed pork is poor. Some markets still have a certain amount of unsold inventory. At present, pork consumption is not concentrated. Although the weather is turning cooler and temperatures are falling in northern China, improving demand for pork trading at rural fairs in the domestic market, reduced movement of people in cities and cooler tourism consumption mean that demand lacks any clear increase. Domestic slaughterhouses continue operating on an order-based basis, with the operating rate of sampled slaughterhouses at around 30.97%. Demand lacks clear support.
On the supply side, regarding shipments by leading hog producers, shipments from Northeast China producers increased yesterday, while shipments from large-scale producers in East China, Central China, Northwest China, and Southwest China declined slightly. However, as losses from hog fattening have deepened, this week the average loss per hog for farrow-to-finish farms exceeded 300 yuan. In addition, greater temperature fluctuations have increased biosecurity risks at pig farms. With losses continuing, the need to recover funds has grown, and farms in the broader market are keen to sell. As for hog deliveries to slaughterhouses, deliveries in Northeast China were smooth yesterday, procurement was relatively easy, and market sentiment was bearish. In East China and Central China, large-scale hog producers made ordinary progress with shipments, and slaughterhouses procured hogs relatively smoothly. In southern markets, some large-scale hog producers made ordinary progress toward completing their shipment plans. At present, market sentiment is mainly bearish or stable, with little confidence in a price increase.
In particular, in 10, large-scale pig producers have relatively high planned marketings. Hidden production capacity in hog supply is being released in a concentrated manner. In addition, confidence in the market outlook is weak among producers, hogs are being marketed at heavier weights, the share of medium and large hogs in inventories is increasing, and the domestic price spread between standard-weight and heavyweight hogs is narrowing. Concerns about an oversupply of hogs and pork are undiminished, prompting increased marketings by various market participants!
Based on this analysis, demand is insufficient to absorb supply, the seasonal recovery in demand is weak, and group pig producers are increasing marketings during the month. Moreover, the pace of marketings has been slow during the month, putting considerable pressure on the supply side of the market! In the short term, hog prices may continue to fluctuate downward, and this decline is likely to push prices below 4.5 yuan per jin! As for forecasts of rising hog prices, the mainstream view is that after mid-to-late 11, as temperatures fall further and expectations for southern China’s cured-meat season strengthen, the hog market may gradually improve. However, the potential for price increases will also be constrained!