Pork and chicken prices are worlds apart, and the difference in inventory is the main reason

In June, the agricultural by-product market saw more declines than gains, while pork prices appeared to be “standing out alone”; affected by increased consumption during the Dragon Boat Festival, the average national live pig ex-farm price rose for 15 consecutive days, with a cumulative increase of 3.7%, and on Monday this week it firmly held the 7.55 yuan/jin mark. In contrast, chicken prices continued to fall, among which the “fast-growing chicken” fell 6.2% in 1 month, 2% in June, and as much as 23.7% in a quarter; native chicken prices have recently accelerated their decline, with a weekly drop of as much as 8.64%.

Inventory levels lead to sharply different price trends

Reporters learned from Guangdong, Hunan and Hubei provinces that the huge difference in inventory is the core factor causing the different price trends in the chicken and pork markets.

Reporters investigated wholesale markets in Haizhu and Baiyun districts of Guangzhou, where chicken supply had increased somewhat and transactions were relatively active, but prices continued to slide and probe new lows. Although the Dragon Boat Festival was approaching, no obvious growth was seen in chicken consumption, the inventory of chicken farming enterprises increased under pressure, and they and broiler slaughterers lowered supply prices one after another.

Affected by this, egg prices have fluctuated downward for 5 consecutive months, but as the Dragon Boat Festival approached, wholesale prices rose slightly in the past two weeks, and the cumulative increase in the national egg price (wholesale) in June counted by institutions was about 7.5%. Institutions remain optimistic about the trend of egg futures in the second half of the year; the overall number of laying hens also decreased considerably year-on-year.

Although terminal consumption in the pork market also showed no obvious improvement, demand for catering such as “wrapping zongzi” during the Dragon Boat Festival increased somewhat. However, the inventory of farming enterprises in 7 southern provinces continued to fluctuate at a low level. On the one hand, a wave of “culling sows” appeared from February to April last year; on the other hand, the heavy rain weather in southern China this year had a relatively large impact on pig growth, and the growth rate of piglets slowed noticeably. The slaughter unit weight of ordinary pork in some Guangdong farming enterprises fell 2%-5% year-on-year, with each pig producing 5-13 jin less meat, which is very astonishing.