Forecast and Analysis of Hog Market Prices in the First Half of 2010
Outlook: Forecast of Hog Market Prices in the First Half of 2010
On the upstream supply side, the inventory of breeding sows will continue to increase, so hog slaughter is expected to continue rising. It is estimated that in the second half of 2009, the number of sows bred will increase by 26%, with a monthly increase of 6% in breeding numbers. On the downstream consumption side, with economic development and changes in consumption concepts
On the upstream supply side, the inventory of breeding sows will continue to increase, so hog slaughter is expected to continue rising. It is estimated that in the second half of 2009, the number of sows bred will increase by 26%, with a monthly increase of 6% in breeding numbers. On the downstream consumption side, with economic development and changes in consumption concepts, pork demand has fallen to 62% and is still trending downward. Based on comprehensive forecasts, hog prices in the first half of 2010 will hit a new low.
According to random surveys of some farms, demand for replacement gilts is strong, and the potential production capacity of breeding sows is excessive. It is expected that hog supply will be abundant next year, and prices are likely to hit a new low.
1. Sow Market Performance
Demand for replacement gilts is strong. According to surveys, replacement gilts have recently been in short supply in China, and trading weights have declined. According to surveys of large domestic breeding pig enterprises, the trading weight of replacement gilts has dropped to 30-40 kg. According to current surveys of some farms, replacement gilts account for 37% of the breeding sow inventory.
The production potential of breeding sows is excessive. According to surveys, in the breeding sow inventory structure, sows with 1-2 parities and 3-4 parities account for relatively large proportions, each at about 45%. Currently, sows with 1-4 parities account for 88.6% of breeding sows. This means that in the second half of 2009 and the first half of 2010, China's hog slaughter will increase significantly.
2. Market Analysis
Production structure adjustments increase demand for replacement gilts. Recent adjustments in China's hog production structure are mainly manifested as follows: First, the shift from specialized fattening to self-breeding and self-raising; for example, in the survey, one breeding enterprise had 30 replacement gilts in inventory and no breeding sows. These farmers are those who have shifted from specialized fattening to self-breeding and self-raising. Second, some breeding enterprises are reducing low-productivity breeding sow inventories and expanding replacement gilt inventories. This adjustment has increased demand for replacement gilts.
Breeding sows are being culled in stages, and their inventory proportion is declining. In the survey, sows with 5-6 parities accounted for 11% of the inventory, far below the normal level. The reason is that around National Day in 2008, farmers began adjusting production structures and culling breeding sows with 5-6 parities. According to surveys, the culling proportion at that time was between 30% and 40%.
3. Later Forecast - Hog Prices to Hit a New Low in the First Half of 2010
1. Upstream Supply
Breeding sow inventory will continue to increase. On the one hand, this is influenced by the relatively small proportion of breeding sows with 5-6 parities; on the other hand, it is influenced by the relatively high proportion of replacement gilts. Breeding sow inventory is expected to continue increasing.
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Hog slaughter is expected to continue increasing. Influenced by the relatively large proportion of breeding sows with 1-4 parities, hog supply will be relatively abundant in the second half of 2009 and the first half of 2010. Based on the inventory structure, it is estimated that in the second half of 2009, the number of sows bred will increase by 26%, with a monthly increase of 6% in breeding numbers.
2. Downstream Consumption
The space for demand growth is gradually shrinking. With China's economic development and changes in consumption concepts, among meat demand, China's pork demand has fallen to 62% and continues to trend downward. At the same time, as pork prices continue to decline, the stimulating effect of further price declines on pork consumption is gradually weakening. Therefore, the year-on-year growth space for China's pork consumption in the first half of 2010 is limited. (Editor in charge: Pig Farmer)
Pig Farming Network
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The analytical approach is quite good, but several issues need further confirmation:
1. Sow inventory is increasing, but what about the culling rate of sows due to disease?
2. How many slaughter hogs does each sow produce?
3. What about the national economy, that is, consumer spending power?
--------------------------------------
I think there are still two unknown factors. First, the impact of H1N1 flu: once there are reports of human-pig co-infection, people will reduce pork consumption, which would be a fatal blow to pig farming. Second, how great is the impact of the severe cold in 2009 on pig farming? The coldest winter in many years was something people had not anticipated. Whether this will lead to increased disease and deaths remains unknown. If there is large-scale disease and death, the number of hogs will decrease, and perhaps hog prices will rise.
--------------------------------------
Things are precious when they are scarce.
When pigs are few, everything becomes a pig.
--------------------------------------
What needs to be considered now is inflation and people's consumption levels. With mass sow deaths, piglets may flood the market in the second half of next year. Based on our local market, live pig prices will not decline from December to the second quarter of next year.
On the upstream supply side, the inventory of breeding sows will continue to increase, so hog slaughter is expected to continue rising. It is estimated that in the second half of 2009, the number of sows bred will increase by 26%, with a monthly increase of 6% in breeding numbers. On the downstream consumption side, with economic development and changes in consumption concepts, pork demand has fallen to 62% and is still trending downward. Based on comprehensive forecasts, hog prices in the first half of 2010 will hit a new low.
According to random surveys of some farms, demand for replacement gilts is strong, and the potential production capacity of breeding sows is excessive. It is expected that hog supply will be abundant next year, and prices are likely to hit a new low.
1. Sow Market Performance
Demand for replacement gilts is strong. According to surveys, replacement gilts have recently been in short supply in China, and trading weights have declined. According to surveys of large domestic breeding pig enterprises, the trading weight of replacement gilts has dropped to 30-40 kg. According to current surveys of some farms, replacement gilts account for 37% of the breeding sow inventory.
The production potential of breeding sows is excessive. According to surveys, in the breeding sow inventory structure, sows with 1-2 parities and 3-4 parities account for relatively large proportions, each at about 45%. Currently, sows with 1-4 parities account for 88.6% of breeding sows. This means that in the second half of 2009 and the first half of 2010, China's hog slaughter will increase significantly.
2. Market Analysis
Production structure adjustments increase demand for replacement gilts. Recent adjustments in China's hog production structure are mainly manifested as follows: First, the shift from specialized fattening to self-breeding and self-raising; for example, in the survey, one breeding enterprise had 30 replacement gilts in inventory and no breeding sows. These farmers are those who have shifted from specialized fattening to self-breeding and self-raising. Second, some breeding enterprises are reducing low-productivity breeding sow inventories and expanding replacement gilt inventories. This adjustment has increased demand for replacement gilts.
Breeding sows are being culled in stages, and their inventory proportion is declining. In the survey, sows with 5-6 parities accounted for 11% of the inventory, far below the normal level. The reason is that around National Day in 2008, farmers began adjusting production structures and culling breeding sows with 5-6 parities. According to surveys, the culling proportion at that time was between 30% and 40%.
3. Later Forecast - Hog Prices to Hit a New Low in the First Half of 2010
1. Upstream Supply
Breeding sow inventory will continue to increase. On the one hand, this is influenced by the relatively small proportion of breeding sows with 5-6 parities; on the other hand, it is influenced by the relatively high proportion of replacement gilts. Breeding sow inventory is expected to continue increasing.
--------------------------------------------------------------------------------
Hog slaughter is expected to continue increasing. Influenced by the relatively large proportion of breeding sows with 1-4 parities, hog supply will be relatively abundant in the second half of 2009 and the first half of 2010. Based on the inventory structure, it is estimated that in the second half of 2009, the number of sows bred will increase by 26%, with a monthly increase of 6% in breeding numbers.
2. Downstream Consumption
The space for demand growth is gradually shrinking. With China's economic development and changes in consumption concepts, among meat demand, China's pork demand has fallen to 62% and continues to trend downward. At the same time, as pork prices continue to decline, the stimulating effect of further price declines on pork consumption is gradually weakening. Therefore, the year-on-year growth space for China's pork consumption in the first half of 2010 is limited. (Editor in charge: Pig Farmer)
Pig Farming Network
--------------------------------------
The analytical approach is quite good, but several issues need further confirmation:
1. Sow inventory is increasing, but what about the culling rate of sows due to disease?
2. How many slaughter hogs does each sow produce?
3. What about the national economy, that is, consumer spending power?
--------------------------------------
I think there are still two unknown factors. First, the impact of H1N1 flu: once there are reports of human-pig co-infection, people will reduce pork consumption, which would be a fatal blow to pig farming. Second, how great is the impact of the severe cold in 2009 on pig farming? The coldest winter in many years was something people had not anticipated. Whether this will lead to increased disease and deaths remains unknown. If there is large-scale disease and death, the number of hogs will decrease, and perhaps hog prices will rise.
--------------------------------------
Things are precious when they are scarce.
When pigs are few, everything becomes a pig.
--------------------------------------
What needs to be considered now is inflation and people's consumption levels. With mass sow deaths, piglets may flood the market in the second half of next year. Based on our local market, live pig prices will not decline from December to the second quarter of next year.