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08-14-2020 09:01

As pig farmers increase, meat prices may rise

In the past July, the price of pigs continued to rise while consumption was improving. According to the pig price monitoring data of Xinmu.com, the national average price of live pigs reached 19.37 yuan/jin on July 8, setting a new high for the second time this year. At present, the price of pigs is already at a high level. Will the market outlook continue to rise or fall? The industry believes that pig prices will remain high for a period of time in the market outlook, but there is a high probability that they will not break through historical highs.
Off-season pig prices rise against the trend
   The recent market trends verified the reporter's earlier point of view: July to August is the time when the industry is short of pigs. According to the monitoring of the Information Center of the Ministry of Agriculture and Rural Affairs, the weekly average of the total ex-factory price index of lean white pork in the 16 provinces (municipalities directly under the Central Government) in mid-July was 50.60 yuan per kilo, a month-on-month increase of 6.8% and a year-on-year increase of 104.7%. According to the analysis of the Ministry of Agriculture and Rural Affairs, pig prices have risen against the trend in the off-season. The tight supply of live pigs is the main reason for the increase in pig prices. Factors such as demand affect the growth rate. Among them, the supply of commercial pigs is still tight, but the supply of pork is better than commercial pigs.
   According to the National Bureau of Statistics, the year-on-year decline in slaughter volume since March has narrowed from 36.9% to 24.5% in June. Consumption began to recover significantly in June. Pork consumption has increased significantly in stages, and supply has changed little in the short term. The supply and demand situation is affected by demand in the short term, which has led to a rapid rebound in live pig prices.
   In addition, the price of live pigs has continued to fall since March, and short-term changes in the supply and demand situation have also had a certain impact on the psychology of market entities and slaughter behavior, which has intensified the rebound in pig prices. The heavy rainfall in the south affected the distribution and transportation of pig products in some areas. With the rebound of pig prices, the demand for some pork consumption has been suppressed, and the balance of supply and demand has shifted. At the same time, factors such as school holidays have inhibited some of the demand for pork. Therefore, the rebound of pig prices is not sustainable and will continue to rise. Adjustments will fluctuate, but there will be no significant drop.
Rise or last until National Day
   The price of pigs has been rising for 40 days since the rebound on May 17. At this time, the price of pigs has signaled a slight decline, and many farmers are worried that the market will rebound and fall. Zhu Zengyong, an associate researcher at the Institute of Agricultural Information, Chinese Academy of Agricultural Sciences, believes that the supply and demand situation of pork will improve, consumption is recovering, and high frozen product inventories inhibit the probability and space for excessively rapid pork price increases. Under the premise of effective control of the African swine fever epidemic, it is expected that the prices of live pigs and pork will have a certain room for increase before the National Day.
  Zhu Zengyong pointed out that the stock of live pigs and reproductive sows is the most important indicator of the supply of commercial pigs. As of June 2020, the stock of reproductive sows has rebounded for 9 consecutive months. From the perspective of the production cycle, the supply of live pigs will resume growth after the fastest 10 months, and the stock of pigs and piglets will recover for 4 consecutive months. Sexual growth indicates that the supply of live pigs will be the fastest for 5 months, that is, the supply of commercial pigs will bottom out in July, especially for the leading enterprises above designated size, the slaughter volume will increase significantly in the third quarter.
   According to data from the National Bureau of Statistics, domestic catering revenue in June was 326.2 billion yuan, down 15.2%, and the rate of decline narrowed by 3.7 percentage points from the previous month. Consumption continued to improve. Zhu Zengyong predicts that consumer demand in the third quarter will maintain 80%-90% of the same period last year.
   It is worth mentioning that the current floods in the south have caused huge losses in aquaculture, which may benefit livestock and poultry consumption. Since June, a total of 433 rivers across the country have experienced floods exceeding the warning level. Lin Guofa, research director of Breck's agricultural product shopping network, predicts that only the Yangtze River area will drop by about 30%, and the aquatic product gap will be replaced by part of the livestock and poultry meat. The pig stalls have been cleared out in stages, and he is bullish on the August hog market.
The probability of breaking through the previous high is not high
  According to data from the General Administration of Customs, my country imported 2.123 million tons of pork in the first half of this year, an increase of 1.4 times. The Ministry of Agriculture and Rural Affairs pointed out that pork imports this year will increase by more than 1 million tons over 2019. Zhu Zengyong said that unlike the impact of the new crown pneumonia epidemic on grain trade, some major grain exporting countries restrict grain exports. For meat, the main meat exporting countries, especially pork, have suppressed domestic demand and increased output. Compared with Brazil, the demand for pork exports from the United States is particularly large. It is estimated that the annual export of pork and pig offal to China will be about 1 million tons.
  Although the pork import target has been set, Lin Guofa said that currently affected by the international situation and policy uncertainties, domestic pig importers have intensified panic, and the short-term import decline is expected to increase.
  Zhu Zengyong emphasized that in the short term, the increase in pig prices will fall. At present, the price of pigs has mostly reached the psychological price of slaughter at the breeding end. The number of slaughtered pigs in northern production areas has increased, which has eased the difficulty of purchasing slaughter companies to a certain extent. The local rainfall in the south has eased the phenomenon of concentrated slaughtering of pigs, and local pig prices may have callbacks. The supply and demand game continues, and the price of pigs may fluctuate in the short term. In the medium term, there is still room for pig prices to rise before National Day, but it is unlikely to exceed the previous high.
   At present, when the industry is short of pigs, it is expected that the price of pigs will have some room for increase before the National Day.
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