The double festival is here: hold back or sell out to make more money?
The market has been rising recently, and industry insiders generally believe there is relatively large room for pig prices to rise, with the September market looking promising, but many farmers are worried about a saying that has long been circulating——prices always fall during festivals. The sharp drop during the Dragon Boat Festival still lingers in farmers' minds. Seeing some online analysts say the double festival will stimulate consumption and pig prices will rise, farmers are still muttering to themselves about whether pig prices will fall again during the Mid-Autumn Festival and National Day, and they are rushing to prepare to sell their pigs.
The industry insiders' analysis that pig prices will rise took into account both positive and negative factors on the supply and demand sides. What farmers call “prices always fall during festivals” is a long-standing abnormal pattern in domestic pig prices. We cannot say who is definitely right, but “prices always fall during festivals” is something no one wants to see.
The market is not determined only by the supply and demand structure, but there is no doubt that changes on both the supply and demand sides have an important impact on market trends. If supply exceeds demand, then prices generally move lower. If demand exceeds supply, then prices often strengthen. In September, the live pig market was originally expected to show tight supply and increasing demand, which is why industry insiders said pig prices would rise. But what we have always worried about is that the supply and demand structure will change. From an objective perspective, the possibility of a relatively large change in demand is small, so only if problems appear on the supply side will the extent and momentum of September's pig price increase run into trouble.
The live pig inventory is poor, and the breeding sow inventory is poor. Recently, market pig supply has remained tight, but the Mid-Autumn Festival is coming soon, and after Mid-Autumn comes National Day. Some farmers have begun to worry about “prices always fall during festivals”. Remembering the sharp drop after the Dragon Boat Festival in June, they hurry to arrange live pig sales. Once too many farmers think this way, market pig supply immediately becomes loose. Slaughterhouses breathe a sigh of relief, thinking, I have not even figured out a countermeasure yet, and you have already started dumping.
Because farmers worry about “prices always fall during festivals”, panic selling appears in the market. Because of panic selling, pig supply becomes loose, slaughterhouses lower prices, and pig prices fall. Seeing pig prices fall, farmers believe even more in “prices always fall during festivals”, and choose to dump again at the next festival, which brings another wave of pig price declines.
Why is there a saying that “prices always fall during festivals”? In fact, this is a vicious cycle!
In fact, many farmers themselves understand this vicious cycle, but why do they again and again choose to sell in large quantities? There is a story: a robber robs a bus full of people and tells the passengers that the first person must pay 100 yuan, the second person 200 yuan, and the third person 300 yuan. Before he finishes speaking, the passengers scramble to line up and pay, afraid that if they are behind they will be robbed for more, and they even forget to resist.
In early September, dumping in large quantities out of fear that prices will fall during the festival will only gradually damage September's live pig market. For farmers, appropriately holding back may be the best choice. The national tendency to follow the crowd is not advisable. Do not rush to sell just because you see others selling their pigs. You should know that the ones who make money are always the few who can stay calm.