Piglet prices have continued to decline, reaching a new low in recent years. Although low prices would normally encourage producers to restock at lower levels, restocking interest has remained weak and piglet demand has stayed low amid factors such as subdued expectations for the market outlook and the ongoing impact of endemic pig diseases. As time passes, producers’ expectations for market conditions at the time of subsequent hog shipments have shifted. Restocking enthusiasm at year-end may improve at the margin, and piglet prices could recover slightly. However, factors such as production capacity and production efficiency are expected to limit the upside.
Piglet prices fall to a recent-years low
Data from Zhuochuang Information show that since month 8, the national market price of 7-kilogram piglets first fell rapidly and then declined more slowly. As of month 10 day 23, the market price of 7-kilogram piglets was 95 yuan per head, down 174 yuan per head from the end of month 7. The data show that piglet prices have fallen below their low in recent years, and for the first time in recent years have dropped below 100 yuan per head. Typically, low piglet prices attract some producers to restock at lower levels. However, piglet prices have now remained low for several months, and producers’ enthusiasm for restocking with piglets has shown little improvement. This is due, first, to producers’ pessimism about the market outlook and, second, to the ongoing presence of pig diseases, which has made producers more cautious about restocking.
Figure 1 Muyuan Information’s monitored national price trend for piglets weighing 7 kilograms
Data source: Muyuan Information
Hog prices remain at the bottom, keeping piglet demand low
The Muyuan Information Swine Research Group previously studied the correlation between piglet prices and hog prices. The results showed that piglet prices are one indicator of breeding operations’ expectations for future hog prices. Piglet prices have fallen to lows seen in recent years, yet this has not stimulated breeding operations to replenish their herds, indicating their pessimistic expectations for future hog prices. Based on the growth cycle, the 8-10 period is when piglets weighing 7 kilograms are replenished; these piglets would be marketed in 2027 during 2-4, when demand is expected to be at a low after the Spring Festival. Hog prices may remain low at that time, failing to provide breeding operations with sufficient incentive to replenish their piglet stocks. Meanwhile, hog prices have fluctuated downward over the past several months, with no sufficient upward momentum evident so far. Some breeding operations are pessimistic about the outlook, and, with pig diseases persisting since the second quarter, they are relatively cautious about replenishing their herds. Overall piglet demand remains low, and prices have hit a new low.
National average live pig price trend monitored by Zhuochuang Information 2
Data source: Zhuochuang Information
Piglet prices may rise slightly at year-end
According to a survey by Zhuochuang Information, pig farmers showed a slight increase in willingness to restock piglets in late 10 month. In 11 month, on the one hand, the cost of restocking piglets is low; on the other hand, piglets restocked in 11-12 month are scheduled for sale in 2027 year 5-6 month. By then, live pig prices may recover, and pig farmers have some expectations of rising prices, which may support an increase in willingness to restock piglets. However, capacity reduction remains limited and psy is rising. Some pig farmers still have limited expectations of rising prices in the later market, so willingness to restock piglets in 11-12 month may not increase significantly, and the rise in piglet prices may be limited.