10 came to a close. In China’s livestock and poultry farming sector, the hog market saw an “endless” decline in 10! Although the Mid-Autumn Festival and National Day holidays arrived at the end of the previous month, bringing seasonal demand into its peak period, and slaughterhouse operating rates rose to 34.03% before the Mid-Autumn Festival, the increase from the start of the month was only around 3 percentage points. Market stockpiling ahead of the holidays was poor, and large-scale hog companies fell short of their shipment plan, sending hog prices down to 9.96 yuan per kilogram at month-end! At the start of the National Day holiday, the festive atmosphere accelerated people’s movement, while dining and tourism consumption surged. Domestic hog prices briefly rebounded to 10.25 yuan per kilogram. However, as the supply-demand balance was difficult to turn around and the pressure from a supply-demand mismatch continued to materialize, hog prices “slid down,” and the market fell more sharply than expected!
According to data monitoring and analysis, as of 10 month 31, the average ex-farm price of live pigs in the national market for pigs of the three-way crossbreeding is 9.07 yuan/kg, down 0.01 yuan from yesterday and 11.5% from the beginning of 10 month. The market has shown a continued downward trend! However, today the decline in pig prices narrowed slightly, and signs of market stabilization became more pronounced. The scope for a further short-term decline in pig prices may be limited, but whether prices can “reverse” still faces pressure from multiple sides!
Regionally, across the 7 key production areas in the north and south monitored nationwide and the 28 regions for which data are available, live pig quotations showed a narrow, fluctuating trend! In the north, live pig quotations hovered at 8.5~9.3 yuan/kg: Heilongjiang quoted 9.15 yuan, Liaoning 8.95 yuan, Inner Mongolia 8.8 yuan, Hebei 9.05 yuan, Shaanxi 8.9 yuan, and Xinjiang 8.5 yuan/kg. The market was mostly stable, with scattered quotations edging up slightly! In southern markets, including the southwest, east China, central China, and south China, live pig quotations were 8.5~10.55 yuan/kg. Sichuan and Chongqing quoted 8.8~8.9 yuan, Shandong and Anhui 9.1~9.2 yuan, Jiangsu and Zhejiang 9.25~9.4 yuan, Henan 9 yuan, and Guangdong and Guangxi 8.95~10.55 yuan/kg!
At present, the live hog market is adjusting in a weak, consolidating trend. On the demand side, in major domestic consumption areas, mainstream prices for pork carcasses in the Beijing market have fallen by 0.2~0.4 yuan. Market feedback is subdued, and pork carcass shipments remain poor! In the Shanghai market, mainstream pork carcass prices are around 11.8 yuan/kg. Supply is relatively ample; however, demand is sluggish, and surplus inventory has been reported in markets across several areas!
At present, support from pork consumption remains weak, and seasonal demand is following a pattern in which peak-season demand is not strong. On the one hand, household demand is marginally insufficient; trading in fresh pork carcasses is sluggish, and, due to changes in dietary patterns, feedback on pork consumption is generally unremarkable. The operating rate of sampled slaughterhouses is around 30.82%, with no clear improvement in demand. Most slaughterhouses continue to produce according to sales, and market demand for hogs is ordinary. On the other hand, the average weight of hogs sent to slaughter is rising. This week, the average shipping weight increased to 124.74 kg, and the average slaughter weight increased to 94.28 kg, further strengthening hog supply capacity. In addition, frozen pork inventories are at 31.6%; continued shipments of frozen pork are limiting trading in fresh pork!
On the supply side, 10 month is drawing to a close. As month-end approaches, the pace of domestic live hog shipments has slowed slightly. Yesterday, large-scale hog enterprises in Central China, East China, Southwest China, and Northwest China reduced shipments. At month-end, some hog enterprises had completed their shipment plans, and more began limiting volumes! Meanwhile, among independent pig farms, persistently low hog prices have strengthened producers’ reluctance to accept price cuts, slightly easing short-term supply pressure! However, in theory, live hog supply pressure remains considerable. This month, shipments from major hog enterprises may fall short of plan. In addition, the relatively large earlier sow inventory base and improved production efficiency are adding to domestic commercial hog supply pressure. As temperatures fall, the average weight of live hogs shipped is rising, and the share of medium and large hogs in inventory is increasing. The lack of a clear price spread between standard and heavy hogs is limiting the practice of holding hogs back from market. Seasonal changes are also increasing the risk of disease at pig farms, and producers are still expected to sell hogs to realize cash!
Based on this analysis, amid the tug-of-war between supply and demand, the market may remain mostly range-bound in the short term. In early 11, pork prices may have an opportunity for a brief rebound! However, as pressure from the supply side has yet to fully ease, pork prices may still trend weakly amid fluctuations in the first half of 11! However, from the second half of 11 onward, as the weather turns cooler and the peak season for curing meat approaches, improving marginal support from demand may create an opportunity for pork prices to reverse course!