China’s pig prices plummeted this week (October 13th to 19th), with the average price falling below 11 yuan per kilogram at one point. Financial institutions have indicated that the entire pig industry is now facing losses, as the price of pork shows no signs of bouncing back, potentially forcing some small and medium-sized breeding households to exit the market.
According to monitoring data from the Ministry of Agriculture and Rural Affairs of the Communist Party of China, on October 17th, the average price of pork in mainland wholesale markets was 18.03 yuan per kilogram, a 4.4% decrease from the previous week’s 18.85 yuan per kilogram. The average price for this week stood at 18.24 yuan per kilogram, down 2.7% compared to the previous week’s average of 18.75 yuan per kilogram, and a 6.6% drop from the average of 19.52 yuan per kilogram before the Mid-Autumn Festival.
Data from China Pig Farming Network shows that on October 17th, the price of live pigs (lean hogs) was 11.17 yuan per kilogram, a 2.2% decrease from the previous week’s 11.42 yuan per kilogram.
According to reports from The Paper on October 18th, from October 13th to 15th, pig prices dropped below 11 yuan per kilogram, reaching 10.92 yuan per kilogram, 10.89 yuan per kilogram, and 10.95 yuan per kilogram. Looking at the weekly average, the average price of live pigs this week was 11 yuan per kilogram, a 6% decrease from the previous week’s 11.7 yuan per kilogram, and a 12.9% decline from the average of 12.63 yuan per kilogram before the Mid-Autumn Festival.
Post-holiday, reduced downstream stocking demands, leading to a decrease in slaughterhouse orders, have resulted in a decline in operation rates. This week, the operation rate of key pig slaughter enterprises in China decreased compared to the week before the Mid-Autumn Festival, with an average operational rate of 35.14% during the week, down 2.82 percentage points from the festival week.
Since the Chinese New Year this year, pig prices in China have been consistently low. Reports from the Beijing Business Daily indicate that since mid-August, the decline in pork prices has accelerated, continuing to drop in September. Industry experts attribute the current downward trend in pig prices to an imbalance in supply and demand, with supply outweighing demand.
Data from the Ministry of Agriculture and Rural Affairs of the Communist Party of China shows that by the end of December 2024, the country had 40.78 million sows, close to 105% of the upper limit of rational green area capacity regulation. Considering that the transmission of sow inventory to market-ready pigs takes about 10 months, the industry is currently in a phase of gradually releasing previous production capacities.
As for when the mainland pork market will hit rock bottom and rebound, analysts quoted by The Paper from Zhejiang Dadi Futures Brokerage Limited believe that the current inventory pressure has not been effectively eased, maintaining a trend of strong supply and weak demand, limiting the potential for pork price rebounds, leading to continued downward pressure on prices and widespread losses in farming profitability.
China Citic Futures believes that post-Mid-Autumn Festival, slaughter volumes have rapidly decreased, signaling a slowdown in consumption. Looking at the pace of upstream sow and piglet capacity realization, there will be ample pork supply in the fourth quarter, and the pig cycle is expected to continue its downward trend, with prices remaining in a low range.
Analysts at Zhuo Chuang Information forecast that in the coming week, on the supply side, there are no significant signs of a decline in live pig production from the breeding end, exerting some negative impact on the market, constraining the extent of pork price rises; on the demand side, some high-priced areas may see a decline in market conditions.
Jiang Han, a senior researcher at the Panggu Institute, also told the Beijing Business Daily that current pig prices have fallen below the cost line of 13 to 14 yuan per kilogram for most breeding entities. This not only poses a short-term profit crisis for businesses but also seriously tests the sustainable economic viability of the entire industry. For small and medium-sized breeding households lacking scale advantages and financial hedging capabilities, the current prices have hit their survival bottom line, potentially leading to some breeders being forced to exit the market.