On 11 month 2, the hog market saw a marked change, breaking a decline that had lasted for several weeks! According to data monitored by Zhu Hao Duo, hog prices turned higher across 18 provinces nationwide today, reversing the broad-based weakness seen previously and lifting the national average price of three-way crossbred live hogs by 0.02 yuan/kg to 9.11 yuan/kg. Although hog prices remain low by current standards, the end of the decline has eased farmers’ pessimism somewhat. Is the hog market finally about to turn around?
Looking at the latest hog price trends across 31 provinces and municipalities nationwide, this round of rebounds still shows pronounced regional differences. Many northern production areas saw steep declines earlier, leaving farmers under heavy financial pressure. Their reluctance to sell has grown, and their willingness to hold prices firm has strengthened noticeably. In some southern areas, as temperatures fall, preparations for curing meat have gradually begun, orders from slaughterhouses have edged up, and purchasing activity has improved, driving quoted prices higher. However, prices remain low in a small number of provinces, and increases are generally modest. This is a recovery from low levels, not a strong surge.
In the short term, the factors supporting this price recovery are mainly farmers’ efforts to hold prices firm and a temporary boost in demand; the underlying supply and demand fundamentals have not changed fundamentally. Following the earlier concentrated marketings, the short-term supply of standard-weight hogs has temporarily declined. This, together with some sporadic entry by operators engaged in secondary fattening, has supported prices. However, the overall hog inventory base remains relatively high, pressure from frozen meat stocks has not been fully alleviated, and the broader picture of ample supply has not changed.
Overall, hog prices in 18 provinces are rebounding in tandem. This is most likely a corrective rally after a sustained decline, and a genuine trend reversal is still some time away. In the fourth quarter, hog prices are likely to fluctuate while seeking a bottom. Periodic recoveries will continue to occur, but the conditions for a sustained one-way rise are not yet in place. Going forward, it will be important to track the realization of demand for cured meat, the release of frozen pork stocks, and the pace of reductions in the breeding sow herd to judge when the bottoming phase will truly end.
Industry experts also advise viewing short-term market fluctuations rationally and not mistaking a temporary rebound for a signal of a cyclical reversal. For farmers, the priority now is to protect cash flow. Do not blindly keep hogs on farms in hopes of selling at a higher price just because prices have briefly turned positive, and do not follow the crowd into a second round of hog finishing in a gamble on higher prices. Based on their own financial pressures and the weight of their herds, farmers can arrange sales in orderly batches, use the rebound window to optimize herd structure, and reduce the risk of losses.