Entering 11 month, with the Start of Winter solar term approaching, recent developments in China’s livestock and poultry farming sector show pig prices under pressure and falling! Since the National Day holiday, demand support has weakened and consumption has continued its habitual decline. Meanwhile, diverse suppliers have been actively marketing hogs, and large-scale pig farming companies have a strong need to generate cash and replenish funds. Under pressure from excess supply, pig prices have continued to fall, and the average hog price has kept declining! It is reported that hog prices fell steadily last month. By the end of the month, prices were down 11.5% compared with the beginning of the month, and the price of pigs was approaching 9 yuan/kg, a market trend that exceeded expectations!
Now, in early 11 month, the market is showing a “neither hot nor cold” trend. Although the decline in pig prices is gradually narrowing and the market is increasingly stabilizing, price increases still face pressure from several directions! The prevailing view is that in early 11 month, pig prices may be affected by the pace of marketings, with the market showing slight fluctuations!
On the demand side, the weather is gradually cooling and the Start of Winter solar term is approaching. Seasonal demand for pork is also expected to recover slowly, and demand for pork purchases and sales may gradually strengthen. This may boost slaughterhouse operating rates and increase restocking demand in downstream markets! In particular, the traditional Chinese lunar Hanshi Festival is approaching. The festive atmosphere may gradually build, and as temperatures fall further, domestic sales and pork trading at rural markets may gradually recover. Consumption may provide increasingly strong support for pig prices!
However, from a rational perspective, the demand side still faces considerable pressure! On the one hand, the seasonal peak in demand has routinely failed to materialize, and changes in residents’ eating habits and increased substitution may suppress demand. On the other hand, the average slaughter weight of pigs has risen, pork supplies are ample, and domestic cold-storage pork inventories are high, with frozen pork being released from storage successively, putting further pressure on the market!
In terms of supply, in 10 month, group pig enterprises increased their planned hog sales by 1.91%. Based on earlier changes in the sow herd, theoretically, large-scale pig enterprises may reduce their planned hog sales in 11 month! However, considering that demand fell short of expectations last month and that all market participants are actively selling, group pig enterprises may face difficulty fulfilling their sales plans. Actual planned sales this month remain relatively high, and production capacity continues to be in surplus. The increase in the average weight of pigs sold further strengthens supply capacity, and the market still faces some pressure!
However, as the peak demand season approaches and the countdown to the southern region’s preserved-meat season begins, the market remains confident about the outlook for hog prices. This may encourage producers to hold back shipments and support prices!
According to the data, following price adjustments by slaughterhouses, the national average hog price at the farm gate is expected to be 9.01 yuan/kg on 11 month 3; close attention should be paid to changes in market buying and selling!