At the start of 11月, the Beginning of Winter solar term arrived. In China's domestic hog market, prices have recently fallen steadily, with markets in the north and south both seeing declines. With limited marginal support from demand and supply pressure difficult to ease, heightened biosecurity risks at pig farms, financial difficulties among producers, and panic have kept the market sluggish and pushed hog prices lower. Farming losses have also deepened. At present, in domestic hog-fattening profits, piglets placed before 5.5-6月 are incurring losses of 179.33元/头, while the mainstream farrow-to-finish operation is losing 334.09元/头. Producers are caught in “the darkness before dawn,” but the light of a turnaround has yet to appear.
According to data monitoring and analysis, as of 11月7日, nationwidethree-way crossbreedlean-type standard hogs averaged 8.61元/公斤 at slaughter, down 0.13元/公斤 from the previous day. Hog prices hit a new annual low, with the average falling below the previous low of 8.63元/公斤 (at the beginning of the second quarter). The market has fallen to its lowest level in nearly 10 years! The year-on-year decline was 27.8%, while the price was down 10.25元/公斤, or 16%, from the beginning of 10月. Hog prices have shown a “lackluster peak season” pattern!
By region, across the country's 7 northern and southern production regions and the 28 key monitored areas, the market on 11月7日 was “all in the red.” Most hog prices in the north and south fell, and declines widened in many areas. Average hog prices at slaughter were close to the 8.6元/公斤 reported in Zhejiang, Shanghai, and Heilongjiang. In traditional production and consumption markets, regional hog prices lack an effective price spread. Data monitoring shows that Xinjiang had the lowest quoted price at 8元/公斤, while Guangdong had the highest at 10.2元/公斤. Hog prices across the north and south were generally 8.3~8.7元/公斤, and the market saw a sharper-than-expected decline!
At present, hog prices are under pressure and falling, setting a new low for the year. The market has “fallen too sharply.” The main factor behind the decline is severe pressure from the mismatch between hog supply and demand.
In terms of consumption, according to monitoring by an industry institution, the operating rate of major domestic slaughterhouses is currently at 31.28%. Demand is recovering slowly at the margin. In particular, with the arrival of the Start of Winter and the approaching Cold Clothes Festival, household demand in the domestic market has improved slightly. In addition, cold-air activity has been frequent across China recently, with temperatures falling sharply in northern regions, and residents’ willingness to consume meat has increased somewhat. However, as China’s population ages further and the mainstream labor-intensive construction industry remains sluggish, pork consumption is becoming less concentrated. Although student cafeterias are purchasing as usual, changes in dietary habits and widespread substitution have kept the increase in pork demand relatively limited!
In particular, the weight of hogs marketed has risen recently, increasing the risk of producers holding back hogs for sale. Producers have been more willing to sell medium and large hogs. This week, the average weight of hogs marketed rose to 125.22 kilograms, further increasing the level of pork supply. In addition, frozen pork stocks at slaughterhouses have been shipped out one after another. These factors have further dampened slaughterhouses’ willingness to procure hogs. The surveyed slaughterhouses are basing production on sales, and operating rates remain low, providing limited support to the market!
On the supply side, China’s hog supply faces multiple overlapping pressures! On the one hand, last month, the completion rate of planned shipments by key large-scale pig enterprises was 98.25%. Shipment plans for 11 increased, with a month-on-month rise of 2.56%. However, as there were 1 fewer days available for shipments during the month, the average daily shipment volume in 11 increased by nearly 6% month on month, putting considerable pressure on supply. On the other hand, as autumn transitions into winter, cold-air activity has been frequent and temperatures have fluctuated sharply. Reports of disease have increased at pig farms in many northern areas, and producers are more inclined to panic-sell. Combined with a lack of confidence in the market outlook, secondary fattening operations continue to “sell more and buy less,” further intensifying supply-side pressure!
Accordingly, with the supply-demand fundamentals remaining bearish, domestic hog prices have continued to fall, and quotes for standard-weight hogs have dropped below their annual low. Market sentiment is deeply pessimistic, and in the short term, prices are still likely to fluctuate downward. As for when hog prices will rebound and when the seasonal rise will materialize, the key factors are changes in support from demand at the margin and changes in the pace of producer shipments. In theory, the hog market may gradually bottom out after mid-month, and prices could resume rising in the latter part of the month. Market participants should watch for changes in the pace of market transactions, especially changes in the shipment pace of major pig enterprises!
According to data monitoring and analysis, as of 11月7日, nationwidethree-way crossbreedlean-type standard hogs averaged 8.61元/公斤 at slaughter, down 0.13元/公斤 from the previous day. Hog prices hit a new annual low, with the average falling below the previous low of 8.63元/公斤 (at the beginning of the second quarter). The market has fallen to its lowest level in nearly 10 years! The year-on-year decline was 27.8%, while the price was down 10.25元/公斤, or 16%, from the beginning of 10月. Hog prices have shown a “lackluster peak season” pattern!
By region, across the country's 7 northern and southern production regions and the 28 key monitored areas, the market on 11月7日 was “all in the red.” Most hog prices in the north and south fell, and declines widened in many areas. Average hog prices at slaughter were close to the 8.6元/公斤 reported in Zhejiang, Shanghai, and Heilongjiang. In traditional production and consumption markets, regional hog prices lack an effective price spread. Data monitoring shows that Xinjiang had the lowest quoted price at 8元/公斤, while Guangdong had the highest at 10.2元/公斤. Hog prices across the north and south were generally 8.3~8.7元/公斤, and the market saw a sharper-than-expected decline!
At present, hog prices are under pressure and falling, setting a new low for the year. The market has “fallen too sharply.” The main factor behind the decline is severe pressure from the mismatch between hog supply and demand.
In terms of consumption, according to monitoring by an industry institution, the operating rate of major domestic slaughterhouses is currently at 31.28%. Demand is recovering slowly at the margin. In particular, with the arrival of the Start of Winter and the approaching Cold Clothes Festival, household demand in the domestic market has improved slightly. In addition, cold-air activity has been frequent across China recently, with temperatures falling sharply in northern regions, and residents’ willingness to consume meat has increased somewhat. However, as China’s population ages further and the mainstream labor-intensive construction industry remains sluggish, pork consumption is becoming less concentrated. Although student cafeterias are purchasing as usual, changes in dietary habits and widespread substitution have kept the increase in pork demand relatively limited!
In particular, the weight of hogs marketed has risen recently, increasing the risk of producers holding back hogs for sale. Producers have been more willing to sell medium and large hogs. This week, the average weight of hogs marketed rose to 125.22 kilograms, further increasing the level of pork supply. In addition, frozen pork stocks at slaughterhouses have been shipped out one after another. These factors have further dampened slaughterhouses’ willingness to procure hogs. The surveyed slaughterhouses are basing production on sales, and operating rates remain low, providing limited support to the market!
On the supply side, China’s hog supply faces multiple overlapping pressures! On the one hand, last month, the completion rate of planned shipments by key large-scale pig enterprises was 98.25%. Shipment plans for 11 increased, with a month-on-month rise of 2.56%. However, as there were 1 fewer days available for shipments during the month, the average daily shipment volume in 11 increased by nearly 6% month on month, putting considerable pressure on supply. On the other hand, as autumn transitions into winter, cold-air activity has been frequent and temperatures have fluctuated sharply. Reports of disease have increased at pig farms in many northern areas, and producers are more inclined to panic-sell. Combined with a lack of confidence in the market outlook, secondary fattening operations continue to “sell more and buy less,” further intensifying supply-side pressure!
Accordingly, with the supply-demand fundamentals remaining bearish, domestic hog prices have continued to fall, and quotes for standard-weight hogs have dropped below their annual low. Market sentiment is deeply pessimistic, and in the short term, prices are still likely to fluctuate downward. As for when hog prices will rebound and when the seasonal rise will materialize, the key factors are changes in support from demand at the margin and changes in the pace of producer shipments. In theory, the hog market may gradually bottom out after mid-month, and prices could resume rising in the latter part of the month. Market participants should watch for changes in the pace of market transactions, especially changes in the shipment pace of major pig enterprises!