When will the falling pig price cycle end?

Monitoring data from the Ministry of Agriculture and Rural Affairs shows that on January 20, the average price of pork in the national agricultural wholesale market was 21.

Data map Photo by Xinhua News Agency reporter Fang Zhe

At the beginning of the new year, what is the situation of pork supply in the country? What is the profit and loss situation of the pig industry? Has the upward inflection point of pig prices come? With these questions, the reporter interviewed relevant people in the industry

Pork supply remains plentiful

"In the first half of 2022, the supply of commercial pigs across the country is still obvious, and there may be an obvious oversupply in some time

After the national fertile sow inventory reached a peak of 45.

In Beijing Xinfadi Agricultural Products Wholesale Market, the average daily listing volume of white striped pigs in December 2021 was 1,952.

"2018 was the year with the most abundant supply of live pigs, and it was also the year with the hottest meat trading in Beijing Xinfadi Market

Zhu Zengyong told reporters that starting from September 2021, the monthly slaughtering volume of live pigs in designated slaughtering enterprises across the country has exceeded 25 million heads.

Self-propagation starts to lose money

From the perspective of the cost of pig breeding, self-propagation has historically been lower than that of purchased piglets, but recently there has been a strange phenomenon of small losses from self-propagation and small profits from outsourced piglets.

Zhu Zengyong told reporters that since June 2003, the price fluctuation of live pigs in China has gone through 4 complete cycles

Judging from the monthly average price peaks of live pigs in different cycles, the high point of live pig prices in the first cycle was 9.

In March 2021, outsourced piglet farmers began to lose money, hitting a high of 1,400 yuan per pig in June; self-propagating and self-raising piglets began to lose money in June, and the loss reached about 780 yuan per pig in mid-to-early October

However, affected by the fall in pig prices, the price of piglets continued to fall, and fell to a low level during the year in early October 2021.

"Due to the low cost of purchasing piglets for the outsourced piglet farmers in the fourth quarter, from the perspective of market risks in 2022, the loss risk of outsourced piglet farmers will be less than that of self-propagating and self-raising farmers

When will the upswing cycle come?

"The new round of pig cycle may have to wait until the first half of 2023.

Since the second week of October 2021, the national pig price has rebounded significantly for 8 consecutive weeks, rebounding from 11.

At present, the prices of live pigs and pork have successively corrected after a sharp rebound

"From the perspective of the Xinfadi market in Beijing, the number of baitiao pigs on the market will reach an annual high in the period before the Spring Festival every year
.
Judging from the current supply capacity of baitiao pigs, the twelfth lunar month will exceed the demand this year, and the price of meat will rise before the Spring Festival.
The probability is not high
.
" Liu Tong said
.
The price of live pigs has been in a state of sluggish rise recently, and it is good to be able to maintain near the break-even point of the farm
.
Farms can take advantage of the relatively stable price of live pigs to properly eliminate those low-capacity sows and change the oversupply situation as soon as possible
.

　　Zhu Zengyong said that due to the high level of breeding sows in the second quarter of 2021, the supply of piglets continued to remain high, indicating that the market supply will still show a significant increase in the first half of 2022.
After the Spring Festival, pig prices may be phased too fast.
downside risk
.
The cycle low may appear in April and May, and the price may be about 30% lower than the industry average cost line
.
In view of the fact that the production capacity of reproductive sows has started to decline since the end of the third quarter of 2021, it is expected that the excess pork supply and demand situation will gradually improve from the third quarter of 2022, and the first half of 2023 may enter a new round of pig cycle
.
(Reporter Huang Junyi)