Pig price market analysis: Can the rising trend of pig prices spread like wildfire?
On November 14, pig prices had already been rising for nearly one month. Over this month, the price trends in the north and south have differed considerably. The northeast and north China have risen markedly, becoming the pioneers driving pig prices upward. After entering November, the upward momentum in the northeast and north China paused somewhat. Based on recent data, the east China and central China regions have shown upward momentum. So the key question in the live pig market now is whether this spark of pig price increases can spread like wildfire, and whether east China and central China can lead pig prices nationwide to continue rising.
On November 14, the national average price for foreign three-way crossbred pigs was 16.75 yuan, up 0.02 yuan month-on-month.
Looking at the trend over this half month, pig prices have shown a slow upward trend. As of the publication of this article, data from Zhue Tong shows the national average price for foreign three-way crossbred pigs is 16.75 yuan, just 0.25 yuan away from the 17-yuan mark. The 17-yuan level is right before our eyes, yet it has been slow to break through. Pig prices had already reached 16.5 yuan on November 3, and after ten days they had risen 0.25 yuan, showing that the pace of increase is indeed slow. In terms of rises and falls, the past half month has shown an alternating pattern of gains and declines. In early November, pig prices fluctuated roughly between -0.01 and 0.06 yuan. However, recently there have been three days with a single-day increase of 0.02 yuan. It can be seen that the recent increase has narrowed noticeably.
Regions with pig price increases shift southward
As of November 14, Tianjin, Hebei, Fujian, Henan and Jiangsu were the main regions with price increases, concentrated in north China, east China and central China. Among them, Tianjin, Hebei and Fujian showed the most obvious increases, at 0.1 yuan. But in most other regions, prices mostly remained flat, and the differences remained obvious. In the north, the previously sharply rising northeast and north China have seen their upward trend slow, while the northwest has recently performed relatively strongly, with a more obvious upward momentum. As of the publication of this article, the average price for foreign three-way crossbred pigs was 16.8 yuan in the northeast, 16.84 yuan in north China and 16.42 yuan in the northwest. The northwest region is relatively likely to continue rising within the next week.
In the south, east China, central China and southwest China have shown a slight upward trend, while south China has remained stable throughout. From the perspective of the pork consumption market, according to news from Tongcheng, Jiangsu on November 14, after the Start of Winter, temperatures in Tongcheng dropped sharply, and pork, beef and mutton entered the peak consumption season. At 6 a.m. on the 10th, the meat trading area of Tongnong Logistics was brightly lit and bustling with people, as wholesalers from major farmers' markets, supermarkets and hotels in the urban area made bulk purchases of pork, beef and mutton here.
Zhang Qianglin, a meat vendor who does both wholesale and retail, said that from 2 a.m. to 6 a.m. each day, farmers' market meat vendors generally come to wholesale and buy carcass pork, at a price of 10.2 yuan/500 grams. From 6 a.m. to 6 p.m., buyers from supermarkets and hotels mainly come to purchase cut meat. For pork prices on the 10th, shoulder meat was 11 yuan/500 grams, premium pork belly was 12.5 yuan/500 grams, pig trotters were 10.5 yuan/500 grams, meaty fan bones and marrow bones were 10 yuan/500 grams, and baby back ribs were 24 yuan/500 grams. Pan Jidong, head of the pork trading area, revealed that since the Start of Winter, pork prices have been stable with slight increases, up 0.4 yuan/500 grams compared with October, and sales volume has increased 30% compared with the same period last month.
Take note! Live pig inventories at large enterprises are recovering quickly!
We know that the main reason pig prices are currently rising is that consumption is gradually picking up while pig sources are relatively tight. However, the tightness of pig sources is not because there is a large gap in live pig supply, but because the sharp drop in pig prices in September-October led most pigs of suitable weight to be sold in a concentrated manner, which now supports the rise in pig prices. In particular, there are more small-scale farmers in the northeast and north China than in the south, which caused panic selling by small-scale farmers in the north to be more severe than in the south. This is also why pig prices in the northeast and north China have recently risen relatively sharply. By contrast, the south has more large-scale pig farms, and the supply capacity of large pig farms is growing very quickly. Taking Wens as an example, from January to October it sold 13.82 million head of live pigs, an increase of 1.5 million head compared with last year, a margin of 12%. Muyuan in Henan also grew substantially, selling 2.33 million head of live pigs from January to October, up 67% year-on-year!
As for the future pig price outlook, many pig farmers are optimistic because of consumption growth, but at the same time, everyone should not overlook the supply situation. After a month of slow increases, holding back sales has become the strategy of most pig farmers. At the same time, along with the growth in live pig supply from large pig farms and imported meat arriving at ports, once the peak consumption season arrives, the risk of concentrated supply still exists. Therefore, pig farmers are best advised to sell in batches!