As 11 moves into mid-month, domestic live hog prices have recently fallen to 8.52 yuan per kilogram for standard-weight pigs, with the average price down to 4.26 yuan per jin, setting a new low for the year! In particular, since the “Golden September” month, the live hog market has been on a gradual downward trend, with a clear one-way decline. During the traditional seasonal peak, pig prices have remained sluggish, and the market decline has exceeded expectations! Standard-weight pig prices have fallen by more than 23% cumulatively since the beginning of 9 month, while pig prices are down more than 29% year over year. The market is showing a pattern of “easy to fall, hard to rise”!
However, over the past two days, demand has improved noticeably with the arrival of the Start of Winter and the Cold Clothes Festival! Last week, the operating rate of domestic slaughterhouses was around 30.8%, but at the start of this week it rose to around 33.04%. Demand has provided stronger support, and seasonal demand has clearly recovered!
On the one hand, the Cold Clothes Festival has led residents to purchase more pork in the domestic market. In addition, with the arrival of the Start of Winter and a sharp drop in temperatures, residents are more inclined to buy pork to prepare for winter. The enthusiasm for buying and selling fresh pork has improved noticeably, and seasonal demand has recovered!
On the other hand, as egg prices rise and beef and mutton prices generally approach 40 yuan per jin, pork has become better value for money, and substitution in the market has increased. In addition, many places have recently had autumn breaks, leading to more residents traveling and greater population movement. Dining out and dine-in consumption have improved!
As a result, with marginal demand support improving, domestic pig prices have stopped falling and rebounded. However, the live hog market still faces severe supply pressure!
It is understood that, with live hog prices remaining low for an extended period, farmers are facing a situation akin to being slowly bled dry, while long-term losses from fattening hogs are putting mainstream farmers under financial pressure! In addition, temperatures have fluctuated considerably recently, triggering more stress reactions at pig farms. Disease outbreaks have occurred at farms in many places, and panic persists among producers, with commercial farms eager to sell! Meanwhile, faster weight gain among fattening hogs has pushed up the average weight of hogs shipped to slaughter, further strengthening the supply of fresh pork!
On the supply side of market hogs, large-scale pig enterprises have further increased shipments this month. Following active shipments by independent pig farms last month, shipments by major integrated pig enterprises have been relatively slow, and daily shipment pressure remains undiminished! In addition, since the fourth quarter, major slaughterhouses have held high frozen-product inventories, and frozen pork has been gradually released to the market, further increasing market supply!
Based on this analysis, bullish and bearish sentiment coexist amid the balance between supply and demand, and the market is mainly expected to fluctuate within a range! Feedback from the grassroots indicates that, following price adjustments by slaughterhouses, on 11 month 11, the quoted price for external three-way crossbred pigs is 8.53 yuan/kg. Going forward, attention should be paid to changes in the pace of market buying and selling!