In mid-11, domestic pork prices have recently been moving sideways near the bottom. At the start of the month, following slow slaughter by major corporate pig producers in the previous period and a buildup of some production capacity, large-scale pig producers increased slaughter volumes early in the month. Slaughter weights also continued to rise, further strengthening pork supply. Social farms and secondary-fattening operations, among others, faced deeper fattening losses and increased risks from pig diseases, leaving producers more inclined to sell. Amid the supply-demand imbalance, domestic pork prices remained weak. The price of standard-weight pigs of the Three-Yellow crossbreed fell to 8.52 yuan/kg, setting a new low for the year!
Currently, pressure on the supply side of the live pig market remains considerable! On the one hand, slaughter volumes are high this month, with planned slaughter by major pig producers above designated size rising 2.56% month on month, and the daily average increasing by nearly 5.96%. According to the latest information, the average slaughter weight of live pigs is currently around 125.92 kg. Slaughter weights have risen further, strengthening market supply. On the other hand, piglet prices have been sluggish this month, and producers are facing financial difficulties and lack confidence in restocking piglets. Mainstream independent pig farms are said to be focused on recovering funds, with a strong inclination to sell. In addition, repeated rounds of entry into secondary fattening operations this year have mostly ended in losses. These operators are also under considerable financial pressure and strongly inclined to realize their holdings, so the willingness to sell live pigs is high! Meanwhile, on the pork supply side, increased planned slaughter and rising average slaughter weights have strengthened the supply of fresh pork. Frozen pork inventories are also high: the frozen product storage capacity utilization rate was 31.23% last week. Increased shipments of frozen products are affecting normal trading in fresh products and putting pressure on pork prices!
Although supply-side pressure is difficult to reverse, seasonal demand is gradually providing greater marginal support, and the live pig market is returning to its seasonal peak season!
On the one hand, as pig prices remain sluggish, pork prices have continued to trade at relatively low levels. Although residents’ dietary habits favor low-fat foods, beef and mutton are too expensive, improving pork’s value for money and somewhat boosting market enthusiasm for trading dressed carcasses. In particular, as temperatures turn colder in northern regions, demand for pork trading in rural markets has recovered, and orders at domestic slaughterhouses have increased. So far, the operating rate of sampled slaughterhouses has risen by around 33.08%!
On the other hand, as pig prices have slumped too far, losses for farmers have deepened. With the seasonal curing peak approaching, smallholder pig farms are increasingly reluctant to accept price cuts, strengthening market support for prices. Moreover, amid a marginal recovery in demand, trading activity for medium and large pigs has picked up somewhat. The price spread between standard and large pigs has widened slightly, improving market confidence and prompting some farmers to hold out for higher prices.
Based on this analysis, amid the tug-of-war between supply and demand and adjustments by slaughterhouses, the live hog price for three-way crossbred pigs is expected to be 8.54 yuan per kilogram on 11/13. Going forward, attention should be paid to changes in the pace of market trading.