Is the supply-demand gap narrowing? Will prices still plummet?

In the first half of this year, hog prices continued to rise, while bulk feed prices fell sharply. Pig farming profitability continued to recover, and many farmers have basically gradually made up for last year's losses. But faced with such a good market trend, many farmers did not press home their advantage and restock in large numbers.

Many farmers said: on the one hand, due to the existence of the hog price cycle, they worry that after expanding production capacity they will again encounter a market downturn leading to losses, so most still maintain their original production scale. Everyone also says that the huge losses of 2014 are too hard to forget, and the pig farming industry is undergoing transformation, with the direction still unclear; on the other hand, because environmental protection has raised the threshold for pig farming and breeding technology requirements are getting higher and higher, many pig farmers are waiting and seeing, and pig farmers themselves are not confident about whether they can handle these changes.

To be honest, pig prices will eventually enter a downward channel, because the most fundamental factor affecting pig prices is the inventory. So as hog inventory recovers, a substantial decline in pig prices is unavoidable. However, this substantial decline at least will not appear now. A sharp decline should not occur in the remaining days of this year. Therefore, faced with this week's widespread decline in national pig prices, farmers must view the market rationally and stop selling off their stock.

At present, the north still continues the sell-off pattern, especially the Northeast region, which has already seen the 8 yuan price level, with some areas even falling below 8 yuan yesterday. We know that pig prices will only fall further the more they are dumped, and the more they fall the more they are dumped, and the only way to stop this vicious cycle is through us pig farmers ourselves, since the overall oversupply pattern has not yet formed. Because information spreads quickly, the decline has spread rapidly, making it hard for farmers to tell true from false, and many blindly follow the trend. In fact, a 1 yuan drop is already very large; even pig brokers and slaughterhouses are surprised. Therefore, farmers should return to rationality and wisdom, and must not harm themselves.

At the same time, regarding the current hog market, industry insiders say that although the capacity recovery process is slow and the supply-demand relationship has not yet reversed, the supply-demand gap is already narrowing. Farmers should still treat rises and falls objectively, and market their pigs and restock rationally.