Can pig prices continue to rise? Pig farmers hope for a warm spring-like market

It is now the warm spring month of March, a season when all things revive and grass grows and birds fly, when everything has accumulated energy and waits to release it in spring. We have already felt the face of spring through our eyes, and felt spring's warmth through our sense of touch. This is the atmosphere of our lives, but what kind of picture is our work, and the pig farming industry we are in?

It seems the pig farming industry also could not decline such hospitality, accepted the warmth of spring, and launched heart-warming activities. After the Spring Festival, pig prices began to decline, leaving pig farmers still in the merciless cold of winter. As temperatures rose, pig prices began to fluctuate, stabilize and trend upward from mid-March, the warm spring month. This year spring no longer shyly arrived early; this year the pig market drove away the "cold spring" of previous years and began to be "different" and "unique."

So at this time pig farmers are all very puzzled: spring can firmly deliver warmth, but can the pig market?

This question concerns not only pig farmers; the feed industry, slaughtering enterprises, food factories and the planting industry all pay close attention. The position of the pig farming industry can be imagined. So how exactly will the pig market move? This article will analyze the favorable and unfavorable factors currently and later facing the pig market.

Factors warming the hearts of people in the pig market

I. Terminal pork consumption strength

If we talk about favorable factors for the pig market, we must first discuss one of the main factors determining pig prices: terminal pork consumption. In the past, the amount of meat reserved by residents before the New Year would last until April or May of the following year before running out, but the amount reserved before the 2015 Spring Festival decreased markedly year on year. At present, in March, terminal demand has begun to show signs of recovery, and the pre-New Year reserves no longer last so long. The relatively fast recovery of terminal consumption is a major favorable factor for the pig market.

II. Qingming Festival and Labor Day are approaching

It is commonly agreed that festivals can promote meat consumption. There are still ten days until Qingming Festival, and May Day Labor Day is also approaching. The two festivals will boost meat consumption and will provide certain support for pig prices.

III. Decline in live hog supply

After more than a year of elimination in the pig market, the inventory of breeding sows has continued to decline and is still in the process of being eliminated. Before the New Year, farmers concentrated on selling, creating a gap in market live hog supply. Also, pig prices in the first half of previous years generally performed poorly, and most pig farmers would not plan to sell at this time. Live hog supply has therefore become somewhat tight.

Factors that still make the pig market unable to resist the "spring cold"

I. Marked decline in terminal consumption

The marked decline in terminal consumption has gradually manifested since the second half of 2014 and has continued to torment the pig market in full measure until now, suppressing the extent of pig price increases.

This is especially reflected in the strength of residents' pork reserves before the New Year. If southern residents' cured meat production could reach half of previous years, that would already be quite good; residents in a considerable number of areas reported that cured meat production was less than three-tenths of previous years. This decline in the figure, and such a marked decline, is already enough to restrain pig prices.

The decline in terminal consumption is mainly reflected in the weakening strength of residents' daily pork consumption. As residents' living standards improve, meat consumption is gradually shifting to other meats, reducing pork consumption. On the other hand, the successive occurrence of food safety problems in recent years such as "lean meat powder" and "drifting pigs" has greatly weakened residents' confidence in pork consumption. Third, modern people pay increasing attention to health preservation, and adjustments in dietary structure have reduced meat consumption while increasing consumption of vegetables and fruits.

II. The drawbacks of the two festivals

For the pig market, festivals are a "double-edged sword," which has also become a consensus among pig farmers in recent years. During festivals, pork consumption increases, and this is also becoming a good time for pig farmers to sell pigs, but this mentality precisely prompts farmers to concentrate on selling at this time, causing live hog supply to exceed demand. The painful scene of pig prices falling instead of rising has already played out several times.

The current tight live hog supply is also somewhat related to this mentality among farmers, and is not solely caused by genuinely tight pig sources. The sharp rise in pig prices around May Day in 2014 gave farmers a psychological suggestion, and this year many farmers are betting on pig prices around May Day. On the basis that pig sources are indeed somewhat tight and slaughter weights are declining, holding back sales has become a choice. If pig prices rise, such holding back will inevitably weaken the extent of later pig price increases; if they decline, it will worsen the extent of the decline.

The game among multiple factors in the pig market continues. At present, live hog supply has a slight upper hand, but whether live hog supply can dominate later is truly a worrying question. Various factors in the pig market act together on pig prices, and the gap between favorable and unfavorable effects is actually very small. It is impossible for either side to be clearly higher than the other again. After all, the decline in terminal consumer demand is too large. In a later market with increasingly fewer live hogs, it can only be said that pig prices overall will fluctuate upward later, and declines will still be unavoidable. The 2015 pig market is a warm, sun-facing situation, and the heat of midsummer will be very difficult to appear.