By Lyle L. Jones, Director of Sales China, Genesus Inc.
We have been expecting for some time pig prices in China to begin improving in the second quarter 2022, due to liquidation that started last July 2021. Based upon on our sources in the field, it seemed there were a lot more sows going to slaughter than reported. Now after 8-9 months, there are less pigs coming to market. Who knows how many sows where affected, but the best indicator of the reality will be China hog prices.
|China Prices in U.S. Dollars Converted from RMB|
|National Market Hog Price||Culled Sow Price|
|Week of April 18||$0.85/lb.||$0.55/lb.|
|Week of May 20||$1.08/lb.||$0.70/lb.|
Since March 18, 2022, China Slaughter pig prices have risen from RMB 11.98/Kg ($0.85/lb.) to a national average of RMB 16.01/Kg ($1.08) by May 20, up 27%. At the same time, culled sows prices are an indication of direction the market is heading were up from RMB 7.79/ Kg ($0.55/lb.) to RMB 10.41 ($0.70/lb.) representing 27% increase.
Perhaps what has been capturing the most attention in the headlines the last few weeks has been a huge surge upwards in the weaned pig market. Weaned pig prices have always been seen as leading indicator of the hog market to come. Recently there has been a lot of demand from small, medium and large-scale producers alike to add more piglets to their barns.
Since April 22, the National Average price of 7kg (15 lb.) weaned pigs rose from RMB 398 ($61.34) to RMB 543 ($81.28) on May 20th, a month on month increase of 32.5%. Reports are that weaned pig prices in some markets have broken RMB 650 ($100) per head. This is quite an astonishing turnaround since according to the chart below, the lowest price or piglets in 2021 was RMB 70.14 each or ($11) per head on October 12.
Since the rise in pig prices starting in April, many producers have rid themselves of their long-term losses and returned to profitability. Reported profit from finishing weaned pigs now is RMB 194 ($30) per head. There is much discussion regarding the market in the second half of the year. We expect as fewer and fewer hogs come to market as a result of the month’s long liquidation, prices will continue to increase. Price is the truth.
This post was written by Genesus