After nearly two years of continuous increase, pig prices have continued to decline this year, a drop of 30% year-on-year, and some farmers have approached the break-even point.

CPI is an important indicator for judging inflation, and this indicator is an important consideration for monetary policy orientation. As an important part of CPI, pork prices cannot be ignored. According to the Ministry of Commerce's monitoring data, the average wholesale price of pork dropped 22% year-on-year from May 29 to early June. According to the latest data released by the National Bureau of Statistics, pork prices fell by 12.8% in May, affecting CPI by about 0.38 percentage points. This effect reached 0.77 percentage points in mid-2016.

Factors such as increased supply of live pigs, lower feed costs, and weaker consumer demand are considered by market participants to be the main reason for the downturn in pig prices. At the same time, many interviewees agreed that although there will be a small rebound in June and July, the magnitude will not be too large. Under the impact of imported pork, pork prices will continue to decline as a whole in the second half of the year.

Pork supply exceeds demand

According to the reporter's understanding, in May this year, the weighted average price of Baizhi pig wholesale in Beijing Xinfadi Market was 8.55 yuan per catty, down 6.25% from April and 30% from the same period of last year. At the same time, the daily average market volume was 1,830. There was a significant increase in both the ring and the year-on-year. According to industry insiders, this season is a low season for pork consumption, and the price of pigs on the market should be low.

However, the problem is calculated according to the usual three-year pig cycle. It seems that it should be at the end of a pig cycle. Whether the price of pork will continue to fall will become the focus of attention of the industry chain. In this regard, Zhihua, chief analyst of Zhihua Data, said that on the one hand, the price decline is related to the increase in pork production. According to relevant data, the amount of live pigs and pork production in the first quarter increased by 0.2% compared with the same period of last year. At the same time, the weight of pigs slaughtered increased significantly compared with the same period of last year, the average weight of the slaughter was above 230 kg / head, and the weight was lower in the second half of May. This has led to an increase in the supply of pork compared to last year.

On the other hand, consumption is light. After the Spring Festival, it entered the low season of consumption, and the slaughterhouse sales have been very light. According to the follow-up feedback to traders, the supply of live pigs in the market is from normal to partial. “At the same time, the slaughtering of slaughtering enterprises was too large in the early period, and the current stocks of frozen stocks were too high. The slaughterhouses were reluctant to purchase large quantities of live pigs. The supply of beef and mutton in the market was too large, and the prices were lower, which crowded out some pork demand, especially Before June, the price of chickens and broilers was plummeted, and a large number of poultry were slaughtered. There was a huge inventory of stocks in the warehouse. Even if the chicken price rebounded recently, the chicken meat still had a significant substitution advantage over pork.” Brian Consulting Research Director Lin Guofa In an interview with the reporter of China Times (public number: chinatimes), he said.

As pork prices continue to fall, some farmers have approached the breakeven point. According to data released by the price monitoring department of the National Development and Reform Commission, the national pig food price was 7.54, a decrease of 1.18% from last week from June 5 to June 9, 2017. The national pig price was 5.81, down 0.85 from last week. %. Based on current prices and costs, future pig farming may have a risk of loss (referring to piglet farming).

"The current pig market has been completely different from last year. For example, the price of pig food was 10.95 in the same period last year, and the price of pork was 8.51. The price of pork is not going up this year. Even if it is difficult to make a profit now, it will not be easy to make money in the second half of the year. I can't make it back. Last June, the selling price of the whole live pig (hog) was 9.9 yuan per catty, but now it is only 6.3 yuan per catty, and the price has dropped by 36%." Mr. Li, a pig farmer in Ninghai County, Ningbo, was interviewed by reporters. Said.

In this regard, Lin Guofa said that the average price of ternary pigs in the country fell to 6.2 yuan/kg at the end of May, and the self-supporting farmers still had a net profit of 200 yuan/head, but if the farmers who bought the pigs in the previous period appeared 100-200 yuan / head loss. In addition, due to market panic, some areas of the cross-country pigs appeared 5.2-5.3 yuan / kg, even if it is self-supporting, 300 kg weight still has a loss of 100 yuan / head, while the high price of pigs lost 300-400 Yuan/head.

In addition to the influence of supply and demand on the price of pork, Li Guoxiang, a researcher at the Institute of Rural Development of the Chinese Academy of Social Sciences, said that there are also monetary policies and the impact of the macroeconomic situation. Around 2008, the entire Chinese macro economy was basically consistent with the pork price index.

However, this round of pig cycle has changed. From the current point of view, the pig cycle in the past is generally relatively short. In this round of pig cycle, the price increase time is relatively long. At present, the price of pork has fallen. One is seasonal fluctuations. Now it is the off-season of pork consumption, which is going to fall. In addition, the production capacity in the north has been formed, which has led to the current pattern of oversupply of pork.

Imported pork rushing market

In fact, the increase in imports is also an important factor causing the decline in pig prices in the domestic market. The impact of imports on China's agricultural products has always existed, and it is also a thorn in the hearts of farmers and farmers.

The continued increase in imported meat has also laid a mine for the demand for raw materials. According to the reporter, the number of imported meat in China reached an all-time high in 2016. According to customs data, China imported 1.62 million tons of pork in 2016, an increase of 108.4% over the full year of 2015.

The average price of imported pork is about 6.5 yuan / kg, which is significantly lower than the price of live pigs in China. According to data from the General Administration of Customs, pork imports have re-emerged in the first three months of this year. In March, China imported 273,300 tons of live pig products, an increase of 8.4% from the previous month, including imported fresh frozen pork of 124,000 tons, an increase of 12.4% from the previous month and an increase of 8.1%.

According to industry insiders, these imported meats are mainly imported into domestic slaughtering and meat processing enterprises, which means that the reduction of domestic pig demand directly leads to a decrease in the demand for feed ingredients. With the increase in policy grain supply, corn supply will be loose, and corn prices are expected to gradually move closer to the auction reserve price. For farmers, they are in the corn planting period, and they need to pay attention to the critical period of crop growth and planting subsidy policy.

Yuan Song said that the pig price has entered the down cycle. In the short term, there may be a short-term rebound in pig prices in the next 1-2 months. It is inferred in time that there may be a 1-2 week break in the fat pig slaughter in June-July, which is expected to cause market supply tension, which will push up the pig price rebound. In the long run, the industry's production capacity is constantly recovering, and supply will continue to grow in the future. Pig prices will continue to decline. In the second half of the year, it is difficult for pig prices to perform well. It is expected that pig farming will remain in the profit range this year and will enter the loss period next year. Under the current feed cost conditions, farmers can appropriately delay the time of slaughter and increase the weight of the bar.

For the price trend of pork in the second half of the year, Lin Guofa said that it does not rule out that the price of pork has fallen below 6 yuan/kg. Farmers should do a good job of slaughtering the program, and have a rhythm to prevent excessive pressure and lead to possible losses.