Pig prices keep rising: market analysis before the 2016 Spring Festival
Since October 2016, live pig prices began to fall, at one point dropping below 8 yuan per jin, but with the arrival of the traditional cured meat season, live pig prices began to recover gradually. According to industry insiders, this recovery will continue until before the Spring Festival.
Meat prices rising relatively fast
“Second Senior Brother” has raised prices again. Now the wholesale price of dressed pork is 9.5 to 10 yuan per jin! On November 18, a reporter learned at the fresh meat wholesale area of the Zhougudui Agricultural Products Wholesale Market in Hefei that pork prices have risen recently, and livestock and poultry meat trading is about to enter its peak season. Li Tao, head of the information department of the Zhougudui market, said that the current daily wholesale volume of pork is about 400 tons, and the wholesale price of dressed pork is 9.5 to 10 yuan per jin, with a week-on-week increase of 3.1. With the arrival of the cured meat season, meat trading volume has clearly climbed.
On the morning of November 19, the sausage-stuffing stall at a vegetable market on Wangjiang West Road in Hefei was surrounded by residents carrying pork and waiting to have sausages made. “Meat prices have risen again these past few days, with pork up one or two yuan per jin compared with last month.” One woman queuing said that meat prices had not been cheap all year, so she did not plan to cure bacon and would only make some sausages. A vendor at the vegetable market said that making sausages now is a bit early; generally, people start making cured meat and sausages after the Winter Solstice. However, the Spring Festival comes early this year, temperatures have dropped recently, and with good weather, making sausages in advance will not taste too bad. Once the peak season for curing bacon and sausages arrives, pork prices will rise accordingly.
Live pig prices recover
Ma Zhipeng, a large pig farmer in Liushi Pu Town, Yingshang County, told reporters that local live pig prices have now risen to 8.2 yuan per jin, an increase of 0.5 yuan from last month. “There are also more people buying live pigs now. I can earn 400 to 500 yuan from selling one 200-jin fat pig.” Ma Zhipeng said that pig farming profits this year are still very good, and next year he will expand his farming scale. Zhang Xing, a pig farmer in Xinqiao Village, Economic Development Zone, Tongcheng City, said that live pig prices are now clearly higher than last month, reaching 8.4 yuan per jin. In the past few days he had just sold 500 fat pigs, earning 500 yuan per pig. “I believe pork prices will rise further before the Spring Festival. The Spring Festival is early this year, and live pig prices will keep rising from now on.” Chen Qingwen, a pig farmer at Wanhe Farm in Anqing City, told reporters that the local live pig price is 1 yuan per jin higher than last month, reaching 8.5 yuan, and selling one 200-jin fat pig earns at least 450 yuan. “Next month I will sell another 900 fat pigs, and I estimate that by then live pig prices will reach more than 9 yuan per jin.”
The rise will continue until before the Spring Festival
Yin Zongjun, a live pig breeding expert at Anhui Agricultural University, said that the Ministry of Agriculture recently released data on sow and live pig inventories for October 2016. In October, the sow inventory was 36.96 million head, down 3.9 year on year; the live pig inventory was 377.09 million head, down 3.4 year on year. Earlier, because pig prices fell, farmers increased the culling rate of older sows, and by the end of October the culling of older sows was basically nearing completion, with culling volume beginning to decline month on month. Because the pig price decline in June reduced sow replenishment, the number of first matings for sows in October fell further to 600,000 to 650,000 head, so the sow inventory continued to decline. The reasons for the earlier decline in live pig prices were higher piglet survival rates, which led to a phased increase in market supply, falling corn prices, and a surge in imported pork. The reasons for the later recovery were cooler weather, lower temperatures, an excessively large earlier sell-off, a gradual reduction in inventory, farmers holding back pigs while waiting for higher prices, and a gradual reduction in the amount of imported pork. As temperatures drop further and people begin making cured meat, demand will increase, and pig prices will recover further.
New Pig Network forecasts that pig prices will rise in both the short and medium term, mainly based on the following factors: December to January next year is the traditional peak season for pork consumption, and increased demand will further support pig prices. In the medium term, the sow inventory is still bottoming out. Based on the sow inventory corresponding to live pig production capacity supply 10 to 12 months later, it is expected that live pig supply will still be in a tight state next year, and pig prices are expected to rise until the middle of next year.