Lyle L. Jones, Genesus Director of Sales, China
China 2022 Hog Prices in review and Outlook for 2023
Looking back at China pig prices in 2022, slaughter pig prices dropped from 16 yuan/kg in January to a low of 11.98 yuan / kg March 18, 2022. During this time China producers were losing huge sums of money ranging from $50 (340 yuan / hd.) to $175 (1000 yuan / hd.) depending on upon actual costs of production and financial indebtedness. Compounding the situation was the fact that producers were losing money going back to the second quarter of 2021.
Starting in April 2022 China producers saw a welcomed upward trend gradually turning losses into profit. Our contacts had been reporting liquidations starting back in July 2021, and we predicted these liquidations would lead to fewer pigs coming to market beginning in April 2022 and higher prices, Sure enough pig prices started moving upwards in April 2022 despite public reports that China production had fully recovered, and supply was stable.
In June, slaughter pig prices increased from 16.4 yuan / kg., (S1.10 / lb.) to 17.96 yuan / kg., ($1.20/ lb. ) and profits finally emerged at about 800 yuan ($118) per head. The upward trend continued with pig prices topping at 28.46 yuan /kg., ($1.90 / lb.,) on October 21, 2022. From that point producers were dealing with rising costs (especially feed ingredients) and pig prices begin to decline in November. The long period of losses from July 2021 through June 2022 are still fresh in many producers’ minds and we suspect many do not have confidence in pricing in future pig prices.
December 7, 2022, China lifted pandemic control policies. On December 9, 2023 slaughter pig price was 22.54 yuan / kg ($1.50 / lb.) and dropped to 14.71 yuan / kg ($0.98 / lb.) by January 13, 2023. As result of declining demand for pork, producers decided to abandon normal marketing practices and sell early. We have received reports of slaughter weights dropping by 11kg., but still more kg’s of pork on the market.
Normally, producers look forward to the all-important CNY holiday season and enjoy the highest prices of the year. It remains to be seen how the 2023 CNY holiday season will compare, but slaughter pig prices increased each of the 5 days prior to the Lunar New Year. We think it will take some time for consumer demand to recover, but China loves its Pork and we think it will. Genesus wishes all its clients and Genetic Partners in China all the best and a prosperous 2023.
This post was written by Genesus