Lyle Jones, Genesus Director of Sales, China
China Pig prices have risen across the board since October 1, 2022, National Day Holiday. Slaughter pig prices closed at 28.24 yuan/kg ($1.79/lb.) last Friday, up 3.65 yuan/kg ($0.20/lb.) in just two weeks. At the same time, 7kg weaned pigs rose seventy-two yuan ($9.40) to 520 yuan ($72.42) each in the same 14 days period. Culled Sows increased 13% from 15.98 yuan/kg ($1.01/lb.) to 18.36 yuan/kg ($1.15/lb.) within the last one-half month.
These increases come despite recent releases of pork reserves and efforts to keep pig and pork prices in check. Soaring prices may be due to increased demand for the National Day holiday, greater consumption from the recent significant temperature drop, and upcoming New Year’s Day and spring festival creating a phenomenon of hoarding and reluctance to sell.
While producer profits are over 1000 yuan ($140) for a 120kg (265lb.) live pig, if producers can hold marketing until 150kg (330 lb.) their profit may be 1600 yuan ($222) per pig. What an amazing turnaround in an industry that was losing one thousand yuan ($140) in the first quarter of this year.
Pig Price in China Since Last October to Now
We have been saying for months now that the liquidation of sows and related increased slaughter of light pigs during the period of heavy financial losses from October 2021 through April of 2022 was much greater than reported. No one really knows, but our unofficial estimates are 6-8 million sows equal to North American production.
Today, there are those wondering if pig prices will break through 30 RMB/kg ($1.90/lb.) before the end of the year. We are in the camp of those who believe it will, as a natural consequence of supply and demand. No doubt there are fewer pigs coming with increasingly strong seasonal demand during the approaching holiday season.
This week Soybean meal prices continued to rise amid tight soybean meal supplies. As of October 15, the average price of soybean meal reached 5500 yuan ($765)/ ton causing feed companies to announce price increases of up to two hundred yuan ($27.80) per ton for the coming week. Higher feed costs mean higher costs of production, which means China producers need to find ways to lower costs and increase efficiencies to remain competitive in an ever-changing Industry.
The most effective way to lower costs, increase efficiency and maximize production is through higher-quality Genetics. Genesus can help producers anywhere in the world achieve that goal with proven faster growth and the lowest cost of gain in the industry. Give Genesus a call today and find out how.
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This post was written by Genesus