Lyle Jones, Director of Sales, China
China Hog Market- A firsthand perspective
We are just back from attending Leman China Conference in Xian and 10 days in China with firsthand perspective of the hog market there.
Slaughter Pig Price: National average slaughter pig price closed last Friday October 27th at 14.56 yuan/kg ($0.92/lb.) its lowest level since July 21st of this year. We have seen reports that the live hog price fell almost 7% on Monday from a week ago.
7kg Weaned Pig Price: Friday, the National average weaned pig price closed at 160 yuan ($21.92) each. However, our contacts have reported prices as low as 100 yuan ($13.67) in some markets. At the same time, most producers’ costs of production are reported to be 300 yuan ($41) per weaned pig.
Culled Sow Price: National Culled Sow prices closed Friday at 9.46 yuan/kg ($0.58/lb.), also the lowest since July 21st. However, one of our contacts informed us his local market culled sow price dropped to 5.6 yuan/kg ($0.36/lb.) almost virtually overnight. We ask why is it that this happened, and we are told there are simply too many sows going to slaughter now. Just like in the USA, packers in China do not pay more than they have to.
ASF: The 2018 outbreak of ASF in China decimated the herds in 2019 leading to opportunistic expansion in 2020 and first half of 2021. Since, July of 2021 the China market has seen an occurrence of oversupply from expansion of production, and accelerated marketings from reoccurring disease outbreaks.
There seems no plan to eradicate ASF in China, since it is not even a reportable disease. ASF typically is worst in the winter months, but it is notable this year is that our sources tell us outbreaks have started much earlier. We are told it is quite serious in the Northeast, regions in Shandong and even in southern provinces like Fujian. Once ASF is detected, farmers typically just send their pigs to slaughter instead of eradicating them, further depressing prices.
Leman China Conference held in Xian, China October 20-22, 2023: We were in Changsha last March for the previously delayed and rescheduled Leman China Conference. We could not help but notice in Xian, it seemed there were much fewer attendees at this time. No doubt the low market conditions may have affected the attendance. Talking with exhibitors and producers, it seems there are two schools of thought. One is that the low market will last into the middle of next year. The other is that more sows are going to market that people realize and the market will be much improved by Chinese New Year. Chinese New Year is February 10th, 2024, and Spring Festival lasts through 20th February. There are those who believe the market will be improving by then.