The state shot - reserve! How do hog prices go?

In the face of falling pig prices, the state has struck!46e-，

Yesterday, the official WeChat public account of the National Development and Reform Commission released news that in response to the recent low operation of pig prices, the Price Department of the National Development and Reform Commission organized some large-scale pig slaughtering enterprises to hold a meeting to deeply analyze the supply and demand and price situation of the pig market, and recommended that slaughtering enterprises appropriately increase commercial inventory, boost market demand, and promote pig prices to rise to a reasonable range
as soon as possible.
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According to the analysis of participating enterprises, due to factors such as weak pork consumption compared with previous years and the phased increase in pig supply, the price of pigs in the early stage fell rapidly; Recently, pork consumption has recovered, and the demand for slaughter has increased significantly; It is expected that with the further recovery of market consumption, hog prices are expected to gradually recover to a reasonable range
.
Participating enterprises said that the current pork inventory is generally at a low level, and will study to increase procurement and storage in a timely manner, and appropriately increase the amount of slaughter and commercial inventory
.
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The National Development and Reform Commission attaches great importance to the work of ensuring supply and price stability in the pig market, and will continue to pay close attention to market supply and demand and price dynamics, and take timely measures such as storage and storage in accordance with the requirements of the pork reserve adjustment plan to promote the smooth operation of the pig market and the long-term healthy development of
the industry.
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Zhu Dianxiao, a fresh product researcher at Zhongtai Futures, believes that this meeting is different from the many pig market price symposiums held in 2022: first, the background of the meeting is different, this meeting was held in the context of a sharp decline in spot prices and the pig breeding industry falling into losses again, reflecting the National Development and Reform Commission's concerns about the rapid decline in pig prices; Second, the participants of this meeting are different, and the participants of this meeting are mainly "large-scale pig slaughtering enterprises", reflecting the change in the focus of market regulation and control of the National Development and Reform Commission
.
"Under the premise that the elasticity of pig supply before the Spring Festival is small and pork demand still has certain potential, it is easier to achieve the market effect
of boosting demand and stabilizing expectations with the slaughter end as the starting point for market regulation.
" Zhu Dianxiao believes that this meeting can boost market sentiment, stabilize market expectations, and achieve the effect
of preventing the short-term elimination of basic production capacity from intensifying while promoting the price of hairy pigs to stop falling and stabilize.
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On January 9, the National Development and Reform Commission announced that the pig-to-grain ratio was 5.
93:1, which entered the three-level warning range of excessive decline in accordance with the "Plan for Improving the Government's Pork Reserve Adjustment Mechanism to Ensure Supply and Price Stability in the Pork Market
".
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Kong Hailan, a pig researcher at Everbright Futures, said that although the pig-to-food ratio continued to decline and entered the three-level warning range of excessive decline, it is still within
a relatively acceptable range.
The increase in commercial inventory mentioned at this meeting provides corresponding guidance
to market players.
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The reporter of Futures Daily noted that according to the monitoring of the National Development and Reform Commission, in the week of December 5-9 last year, the weekly average retail price of lean meat in 36 large and medium-sized cities increased by less than 30% year-on-year, exiting the warning range of excessive price increases
.
On December 21 last year, the National Development and Reform Commission announced that in response to the recent rapid decline in domestic pig prices, the Price Department of the National Development and Reform Commission recently organized a video conference to listen to the opinions of industry experts and some market institutions, and study the work
of ensuring supply and stabilizing prices in the market.
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Looking forward to the future market, Zhu Dianxiao believes that the pig market in 2023 is a year
of increased supply, recovery of demand, and a slightly loose supply pattern.
On the supply side, taking into account the current high number of breeding sows and the significant improvement in the production efficiency of the sow population, the overall production capacity of the industry may have reached or even exceeded the level of June-July 2021, which means that the supply of commercial pigs in 2023 may exceed that of
2022.
On the demand side, as the impact of epidemic factors on economic and social activities gradually weakens, household pork consumption and social catering consumption will rebound
significantly.
"The weakening of external shocks will promote pork consumption to show a more obvious seasonal pattern, similar to the phenomenon of pork demand in the market in 2022 that is not light in the off-season and 'not in the peak season' may be difficult to reproduce
.
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Kong Hailan introduced that before the Spring Festival, supply continued to put pressure on pig prices, terminal demand increased limited, and pig spot prices showed an oscillating trend
.
From a sub-regional point of view, the willingness of the breeding end to raise prices has become stronger, and the pig price in the northern region has rebounded
slightly.
Stocking before the Spring Festival is nearing the end, and pig prices in the southern region have fallen
slightly.
According to the statistics of Zhuochuang information sample points, on January 13, the average price of pigs in the country was 14.
08 yuan / kg, down 0.
94 yuan / jin from last week; The average pig price in Henan was 14.
9 yuan/kg, down 0.
78 yuan/kg
from last week.
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In the early stage, the big pigs were slaughtered
one after another.
As of January 12, the average weekly trading weight of pigs tracked by the sample points of Zhuochuang Information was 123.
39 kg/head, which decreased
for seven consecutive weeks.
"The data shows that the pressure of large-weight pigs on market supply is gradually eased, but because the current average weight of slaughter is still significantly higher than the average slaughter weight before 2019 (116 kg/head), the pig price before the Spring Festival will still be negative
.
" Kong Hailan said that as the Spring Festival approaches, the probability of a significant increase in terminal demand is small
.
Combined with the fundamentals of supply and demand, pig prices may continue to operate weakly before the Spring Festival
.
In the medium and long term, since November last year, the price of breeding sows has continued to fall, reflecting the decline
in the willingness of breeding ends to replenish the pen.
According to the gradual elimination of pig excess capacity in November last year, pig supply will continue to put pressure
on pig prices from the Spring Festival to September 2023.
Before the future demand does not increase more than expected, the off-season pork demand in the first half of the year superimposed on the negative supply of pig prices, pig prices will continue to run
weakly.
However, due to the current uncertainty on the demand side, if the future demand increases beyond expectations, pig prices may rise
again.
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When will pig prices stabilize in the later period? Guo Dashun, a pig researcher at Soochow Futures, believes that it is necessary to observe marginal changes
in slaughter weight and demand.
Although the average weight of pigs slaughtered has decreased compared with the previous period recently, it is still high compared with previous years, and it still takes time to digest the large pigs in the early stage of retail investors and the pig sources of secondary fattening.
In addition, it depends on when demand will recover, from the seasonal law of consumption, after the Spring Festival, especially from February to March is the demand for pork off-season, the terminal is mainly to digest the inventory in the early stage, and the demand gradually rebounds
in the second quarter.
According to overseas experience, the impact of the epidemic on consumption may usher in a recovery in the second quarter, and there is an expectation
of rebound in long-term pig prices.
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