With 10 nearly halfway over, the domestic livestock and poultry farming sector is seeing a “collapse” in pig prices, with the market in free fall. In particular, after the National Day holiday, pig supply and demand have moved in opposite directions: supply is ample, and large-scale pig producers have increased their market hog sales month on month, while demand has weakened and consumer demand has continued its habitual decline. Amid strong supply and weak demand, the pig market has seen an unusually steep decline, with the average price of standard-weight hogs falling decisively “below 5 and into 4.” Can the market turn a corner from here? An analysis follows:
Currently, in the domestic live pig market, as of 10 month 14 day, nationwidethree-way crossbredLean-type pigPig pricesThe average price of hogs ready for slaughter is 9.86 yuan/kg, down 0.13 yuan from yesterday. Hog prices have fallen sharply, with the average price dropping below the level at the end of 9. The gap from this year's low of 8.63 yuan/kg is now only 1 yuan/kg. The market is showing a pattern of a peak season that is not peaking, with prices down nearly 11% year on year!
By region, in the domestic live hog market, hog prices fell across all of the 28 monitored regions in the north and south. The average live hog price was close to 9.85 yuan/kg in Beijing, Tianjin, and Hebei. Live hog quotations in the north and south fell to 8.95–11.3 yuan/kg, with average live hog prices in major regions successively falling below 10 yuan/kg!
Among traditional production and sales markets, current live pig prices in the Northeast, including Heilongjiang, Jilin, and Liaoning, have fallen to 9.5~9.65 yuan/kg, while prices in Sichuan and Chongqing, as well as Yunnan and Guizhou in the Southwest, are 9.45~9.7 yuan/kg! In traditional high-price regions, live pig prices in East China are currently generally 10~10.3 yuan/kg (excluding Fujian at 11.3 yuan/kg)……
In view of this, on 10 month 14 day, pig prices continued their downward slide, and the average live hog price moved lower again. At present, bearish and stable-price sentiment is strong in the market. In the short term, the live hog market may find it difficult to “see light at the end of the tunnel,” and pig prices still face pressure to edge down!
On the one hand, pressure from live pig supply remains unabated. In particular, the number of breeding sows at the end of last year rose by 4 ten thousand head month on month. With the number of newborn piglets in the second quarter at a high level, the current fundamentals for commercial hog supply are loose. In addition, last month, demand follow-through was insufficient for large corporate pig producers, and capacity reduction fell short of expectations. Their shipment plans were poorly fulfilled, and some pigs were forced to be shipped this month, leaving live pig supply ample. Moreover, slaughter weights increased, further boosting pork supply capacity!
Currently, the weather is gradually getting cooler and temperatures are fluctuating significantly. Recently, pig farms in many areas in both northern and southern China have faced some disease risks, and producers have been forced to reduce capacity. In addition, willingness to cull sows has increased. With large-scale pig farming companies sustaining long-term losses on sales and facing financial difficulties, their need to recover funds has grown, making them relatively more willing to sell!
On the other hand, seasonal demand during the peak season has fallen short of expectations! Although the weather is gradually getting cooler and consumer market trends are recovering, demand support at the margin has been insufficient since the National Day holiday. Sales in rural areas of the domestic market have been average, while demand from urban dining and dine-in services has shown little improvement. Most mainstream sample slaughterhouses are mainly operating based on orders, with little improvement in demand at the margin! In addition, domestic frozen pork inventories are currently high, and frozen pork products may be released gradually in the fourth quarter, further intensifying the pressure from oversupply in the market!
Based on this analysis, with supply exceeding demand, the live hog market faces continued downward pressure, and hog prices may fall further in the short term! However, there are also positive factors in the market. After all, seasonal demand will gradually improve as the weather turns cooler, and demand in the domestic market may gradually recover. In addition, pressure from losses on the farming side has risen sharply, and resistance to price cuts may strengthen. Going forward, attention should be paid to changes in the pace of live hog purchases and sales. As the market enters the latter part of 10 month, there may be an opportunity for the live hog market to strengthen!
Currently, in the domestic live pig market, as of 10 month 14 day, nationwidethree-way crossbredLean-type pigPig pricesThe average price of hogs ready for slaughter is 9.86 yuan/kg, down 0.13 yuan from yesterday. Hog prices have fallen sharply, with the average price dropping below the level at the end of 9. The gap from this year's low of 8.63 yuan/kg is now only 1 yuan/kg. The market is showing a pattern of a peak season that is not peaking, with prices down nearly 11% year on year!
By region, in the domestic live hog market, hog prices fell across all of the 28 monitored regions in the north and south. The average live hog price was close to 9.85 yuan/kg in Beijing, Tianjin, and Hebei. Live hog quotations in the north and south fell to 8.95–11.3 yuan/kg, with average live hog prices in major regions successively falling below 10 yuan/kg!
Among traditional production and sales markets, current live pig prices in the Northeast, including Heilongjiang, Jilin, and Liaoning, have fallen to 9.5~9.65 yuan/kg, while prices in Sichuan and Chongqing, as well as Yunnan and Guizhou in the Southwest, are 9.45~9.7 yuan/kg! In traditional high-price regions, live pig prices in East China are currently generally 10~10.3 yuan/kg (excluding Fujian at 11.3 yuan/kg)……
In view of this, on 10 month 14 day, pig prices continued their downward slide, and the average live hog price moved lower again. At present, bearish and stable-price sentiment is strong in the market. In the short term, the live hog market may find it difficult to “see light at the end of the tunnel,” and pig prices still face pressure to edge down!
On the one hand, pressure from live pig supply remains unabated. In particular, the number of breeding sows at the end of last year rose by 4 ten thousand head month on month. With the number of newborn piglets in the second quarter at a high level, the current fundamentals for commercial hog supply are loose. In addition, last month, demand follow-through was insufficient for large corporate pig producers, and capacity reduction fell short of expectations. Their shipment plans were poorly fulfilled, and some pigs were forced to be shipped this month, leaving live pig supply ample. Moreover, slaughter weights increased, further boosting pork supply capacity!
Currently, the weather is gradually getting cooler and temperatures are fluctuating significantly. Recently, pig farms in many areas in both northern and southern China have faced some disease risks, and producers have been forced to reduce capacity. In addition, willingness to cull sows has increased. With large-scale pig farming companies sustaining long-term losses on sales and facing financial difficulties, their need to recover funds has grown, making them relatively more willing to sell!
On the other hand, seasonal demand during the peak season has fallen short of expectations! Although the weather is gradually getting cooler and consumer market trends are recovering, demand support at the margin has been insufficient since the National Day holiday. Sales in rural areas of the domestic market have been average, while demand from urban dining and dine-in services has shown little improvement. Most mainstream sample slaughterhouses are mainly operating based on orders, with little improvement in demand at the margin! In addition, domestic frozen pork inventories are currently high, and frozen pork products may be released gradually in the fourth quarter, further intensifying the pressure from oversupply in the market!
Based on this analysis, with supply exceeding demand, the live hog market faces continued downward pressure, and hog prices may fall further in the short term! However, there are also positive factors in the market. After all, seasonal demand will gradually improve as the weather turns cooler, and demand in the domestic market may gradually recover. In addition, pressure from losses on the farming side has risen sharply, and resistance to price cuts may strengthen. Going forward, attention should be paid to changes in the pace of live hog purchases and sales. As the market enters the latter part of 10 month, there may be an opportunity for the live hog market to strengthen!