Financial Associated Press, December 19th (Reporter Wang Pingan and Zhang Chenjing)In the peak season of breeding, there has been an unexpected decline. In just two months, the profit of the pig breeding industry has shrunk by 80% from the average profit of more than 1,000 yuan. Reporters from the Financial Associated Press learned from various interviews that the price of pigs is not well realized during the peak consumption season, and the digestion of large pigs by farmers and secondary fattening is slow. The recent concentrated slaughter has led to a panicked drop in pig prices. In addition, the fattening households have a positive attitude towards slaughtering. According to Mysteel data, most of the second breeding completed more than half of the slaughtering, and 80%-85% completed better.
The decline in pig prices accelerated in the two days over the weekend, and the price of pigs has returned to the level of a year ago. According to Zhuyi data, as of December 18, the average price of live pigs of standard weight was 17.42 yuan/kg, a decrease of 2.24% from the previous day, and an increase of 1.27 yuan/kg from 16.15 yuan/kg in the same period in 2021, an increase of 7.86%. In terms of futures, the main 2303 contract fell sharply for several consecutive days last week, and continued to fall today. As of press time, 2303 fell by more than 2%, and 2301 fell by more than 7%.
(Data source: Zhuyi data) Zeng Zihua, chief analyst of Zhuyi.com, told a reporter from the Financial Associated Press: “The main reason for the recent sharp drop in pig prices is the mismatch between short-term supply and demand. On December 18, the price of pigs in slaughtering companies fell significantly. Some enterprises had a second price cut. The price of white strips in the Beijing and Shanghai wholesale markets showed a decline, the market transaction performance was average, and the strength of receiving goods was average.”
In terms of policy, the National Development and Reform Commission previously stated that it will release the government’s pork reserves in due course, and increase the release during important periods such as the “two festivals”. At the same time, according to the monitoring of the National Development and Reform Commission, during the week of December 5-9, the weekly average retail price of lean meat in 36 large and medium-sized cities rose by less than 30% year-on-year, leaving the early warning range for excessive price increases.
Towards the end of the year, the slaughtering speed of the group farms has accelerated, retail investors have suppressed the slaughter in the early stage, and the second breeding pig source has concentrated on the market, but consumption continues to be sluggish, which is the main reason for the unexpected drop in pig prices.
Zheng Lili, general manager of Yongyi Consulting, told a reporter from the Financial Associated Press that in the past week, the enthusiasm for slaughtering large pigs in the market has increased, and large-scale enterprises have accelerated their slaughtering, which has lowered the average weight of slaughtering within the week. However, the demand is not good, and slaughter companies are less willing to accept, and there are more plans to cancel subscriptions at noon, which restricts the rapid turnaround of prices, and fluctuates lower in the latter part of the week. The market sentiment has changed rapidly, and with the gradual decline in meat prices, consumption may be stimulated, which will support a rapid rebound in prices. However, at this stage, many places are gradually drawing to a close, and the overall growth rate of household consumption is slow.
A number of front-line people said on the weekend: “The market panicked on the weekend, and the second-education and pigs were trampled out.” Some farmers said: “I can’t stand it any longer. If I want to sell it, I will pay for it if I lose money.”
It is worth mentioning that regarding the progress of the second fattening and slaughtering, Zhu Yuzhen, a live pig analyst of the Agricultural Products Division of Shanghai Steel Union, said in an interview with a reporter from the Financial Associated Press that the progress of the second fattening and slaughtering of different regions is quite different at present, but due to the price of pigs this month The cliff-like decline, the fattening households’ attitude of slaughtering has increased compared with the previous period. According to market statistics, about 40%-80% of the secondary breeding is completed in various regions of the country, and more than half of the secondary breeding is completed, and 80%-85% is better.
The “two festivals” are approaching, and the market demand may increase to a certain extent. Zhu Yuzhen further stated that the main reason for the price reduction of pigs this time is that the supply exceeds demand, large-scale farms have lost weight for slaughter, and retail farmers have continued to sell fattening pigs. The whole is to release some risks from the previous year. At present, the supply side is concentrated on the slaughter, and some pigs will be slaughtered ahead of schedule next month, and the pickling in the south has not yet ended. For example, due to the weather in Jiangxi, residents’ pickling just started last week, and residents will stock up before the end of the year. There is a certain positive support on the consumer side. There is still a chance for pig prices to rebound.
(Editor Liu Yan)