[Explanation] After the Chinese New Year in 2021, the price of live pigs in China has been dropping, and in some areas it has even fallen below 10 yuan per catty, which is about half of the price in September 2020.

Why do pork prices continue to fall?

Has it fallen to the bottom so far?

Recently, the reporter conducted a visit.

  [Explanation] A few days ago, in front of a pork counter in Shenyang, the reporter observed that the net meat on that day was 14.8 yuan per catty, and the pork ribs was 12.8 yuan per catty.

In some other farmer's markets in China, there is news that the price of pork has fallen below the price of 10 yuan per catty.

  [Concurrent] Zhang Wen, a pork distributor

  The pork price is now cut from the peak, and it is more than half lower than before.

Now there are more collaterals, and now the market is adequately supplied.

  [Explanation] The first domestic hog futures will be listed on the Dalian Commodity Exchange on January 8, 2021.

Like the spot market, the price of live pig futures also hit a new low during the year in May. Compared with the beginning of listing, the main 2109 contract dropped by about RMB 6,500 per ton.

  [Concurrent] Bi Hui, Senior Researcher of Baocheng Futures

  After May, concentrated sales, superimposed on the introduction of imported meat and stock frozen pork, the pattern of ample market supply has been further highlighted.

In addition, the overall situation of the current market shows that since May, the month-on-month increase in the volume of big fat pigs has been very significant, which has also increased the supply pressure on the market.

At the same time, as the price of pigs continues to fall, the entire farming profit has shrunk significantly, which intensifies the panic selling psychology of farmers.

  [Explanation] According to the monitoring of the Ministry of Agriculture and Rural Affairs, the number of reproductive sows in April increased by 1.1% month-on-month, an increase for 19 consecutive months and a year-on-year increase of 23%.

According to analysis by relevant sources, the increase in supply, coupled with the hotter weather and the off-season of live pig consumption, is natural for pork prices to fall.

This is good for consumers, who can spend a small amount of money to "eat meat", but for farmers and some companies in the pig chain, there is no small pressure.

  [Concurrent] Xue Yunan, President of Pig Industry Branch of Liaoning Animal Husbandry Association

  The feed cost for raising 250 kilograms (commercial fat pigs) has to be more than 1,200 yuan, and there are also medicine, vaccine, and labor costs.

There must be a U-turn (death). The cost per catty of this (commercial fat pig) should be between 11-12 yuan.

  [Explanation] According to reports, most pig farmers in Liaoning are currently in a state of capital preservation or slight loss.

With the fall in pork prices, the sales of breeding pigs and piglets have experienced a "cliff-edge" decline.

  [Concurrent] Farmer He Huaijun

  (Is there a 30% drop in piglet sales?) Yes.

During the same period last year (2020), our pigs were not enough to sell.

The deposit was paid at the beginning, but it doesn't work anymore.

In the past, people asked us to buy it, but now we are going to ask others to sell it.

  [Explanation] Declining sales of breeding pigs and piglets will cause retaliatory increases in pork prices in the future?

According to relevant data from the Ministry of Agriculture and Rural Affairs, the number of large-scale pig farms has increased from 161,000 at the beginning of 2020 to the current 180,000. The number of newborn piglets on large-scale pig farms has increased by 58.8% year-on-year. Pork supply is still generally loose in the future.

  [Concurrent] Bi Hui, Senior Researcher of Baocheng Futures

  With the Dragon Boat Festival holiday approaching in June, the market also has certain growth expectations for future consumption.

At the same time, in the process of falling pork prices, the entire farming profit can be said to be basically in a state of basic protection or even a slight loss.

If pig prices continue to fall sharply, they will also encounter resistance from the industry.

Therefore, we believe that after a short-term panic decline in pig prices, the overall decline will slow down, and in the middle and late stages of the second quarter, the futures and spot prices of live pigs may usher in a synchronized rebound, but rebound The height of may be more limited.

  [Explanation] According to analysis by industry insiders, the probability of a direct reversal of pork prices and a rapid rise in the short term is low. Farmers must adjust their breeding scale in time. Consumers can still enjoy affordable pork for most of this year.

From a long-term perspective, establish a modern pig breeding system, animal disease prevention and control system, and circulation system.

It is also necessary to explore and formulate control plans for stabilizing pig production capacity, and make good use of the market's regulatory role.

At the same time, we should play the role of macroeconomic regulation and control to ensure the stable production and supply of live pigs.

  (Reported by reporter Yu Ruizhai in Shenyang)

Editor in charge: [Liu Xian]

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