After losing money for 7 months straight, pig farmers finally see a return to break-even
Pork prices, which are closely tied to city residents' "shopping basket," have risen. Over the past month, pork prices across the country have continued to climb, with the August average up about 10% month-on-month; and data released yesterday by the Sichuan hog monitoring and early-warning system showed that in August the average price of slaughter pigs in Sichuan broke through the 14 yuan/kg mark, and pig-farming profitability has crossed above the cost line.
With the Mid-Autumn Festival just days away, industry insiders believe that pork prices nationwide will continue to fluctuate by 0.1-0.2 yuan before the holiday. Pork prices have risen steadily over the past month, and pig farmers are now essentially confirmed to have reversed the previous 7-month "deep freeze."
Prices rose continuously in August, lean meat sold for 16 yuan per jin
Yesterday morning at the Balizhuang farmers' market, resident Xiao Liu was getting ready to pick out pork ribs to take home for soup, and the pork vendor quoted ribs at 18 yuan/jin, with lean meat also selling for 16 yuan. Xiao Liu said this price was nearly 2 yuan higher than in July. "When the tide rises, the boat floats higher; prices have gone up quite a bit this month," the vendor said.
The "this month" the market vendors refer to is the just-ended August. According to data published Monday on the Ministry of Agriculture website, livestock and poultry products at 480 nationwide farmers' markets continued to show an upward trend in the fourth week of August, with the national average price of live pigs at 14.94 yuan/kg, the national average price of piglets at 24.66 yuan/kg, and the national average price of pork at 23.73 yuan/kg.
In Sichuan, August meat prices followed the same national trend. According to monitoring data from the Sichuan hog monitoring and early-warning system covering 68 counties across the province, last month Sichuan hog prices rose week by week, and the monthly average price of slaughter pigs broke through 14 yuan/kg, reaching 14.17 yuan/kg. Also recovering alongside pork was the pig-to-grain ratio that farmers care about; in August Sichuan's pig-to-grain ratio was 4.93:1 (the break-even point is 6.0:1). This means pig-farming profitability has crossed above the cost line, and pig farmers can finally break even.
Since the end of last year, pork prices had been sliding continuously for as long as 7 months, which the industry called a "deep freeze."
No further rise expected before the Mid-Autumn Festival
Monitoring data showed that yesterday (September 3) the national average price of slaughter pigs was 15.16 yuan/kg, up 9.93% month-on-month from the August average. An analyst told reporters yesterday that since the end of last year meat prices had run at low levels for more than 7 consecutive months, and the price trend in August reversed the slump and rose gradually.
With the Mid-Autumn Festival just days away, will meat prices get another boost from it? The analyst disagreed, saying that market demand has not yet fully recovered, and pork lacks sufficient support for continued sharp rises; he expects only small fluctuations of 0.1-0.2 yuan before the holiday. Based on monitoring of farmers and farming enterprises in major cities nationwide, the analyst said September's national slaughter pig volume is expected to fall 1.78% compared with August, which will lead to a gradual increase in pork demand after the holiday and may support continued price rises.
In the farming industry there is a saying called the "pig cycle," meaning roughly that every two to three years meat prices form a cyclical rise and fall. Does the past 7-plus months of falling and bottoming-out prices mean a new round of rise and fall is about to begin? The analyst said that in recent years the increase in large-scale farming enterprises has made the "pig cycle" phenomenon less obvious than before, and if meat prices continue to rise in the second half of the year, a new round of cyclical price changes will likely begin.