New year’s day and Spring Festival are the traditional peak season for pork consumption, but the reporter visited the market and found that this year’s peak season is not prosperous, the price of live pigs continues to fall, the price in many places has fallen below 8 yuan per kilogram.
pig market is not prosperous in the peak season
a year-on-year decrease of more than 50%
These days, Wang Wenzhi, a pig farmer in Dalian, Liaoning Province, is a little upset. He has more than 300 pigs to be sold at home. He wanted to make more money during the Spring Festival, but the current market disappointed him very much. The price of standard pigs below 300 kg is only 7.5 yuan per kg.
Wang Wenzhi told reporters that before New Year’s day, standard pigs weighing about 200 to 250 kg can still sell for 8.1 yuan to 8.2 yuan per kg. originally thought that pig prices would continue to rise near the Spring Festival, but there was a reversal . Now the price has fallen below his breeding cost line, if sold according to the current market, a pig would lose nearly 200 yuan.
It is understood that the price of pigs has fluctuated continuously since 2021. Before September, the price of pigs continued to run low, and the lowest average price of pigs in China reached 11 yuan / kg. In October, the price began to rebound. By the end of November, the price of pigs once reached more than 18 yuan / kg. However, since December, the market has fallen again, as of January 7, 2022, the average price of Chinese pigs is 15.4 yuan / kg, down nearly 15% month on month and more than 50% year-on-year.
Wang Na, research director of Everbright futures Shenzhen Agricultural Products Group Co.Ltd(000061) : after new year’s day, the space for price decline has increased, and the decline of short-term pig price has accelerated. This round is an off-season decline.
centralized slaughter before pig Festival
large price fluctuation
Before the Spring Festival, the market is not prosperous, and the pig price goes down against the trend. Is it insufficient demand or excessive supply?
At 2:30 p.m., in a large farmers’ wholesale market in Dalian, many pork stall owners were ready to close the stall. Some stall owners told reporters that in the peak pork consumption season in previous years, they generally had to be busy until 4 or 5 p.m., and the sales volume this year was obviously lower than that in previous years.
It is understood that in September 2021, the price of pork once fell to 18 yuan per kilogram, and the “low price effect” triggered a wave of pork consumption boom, many food enterprises hoarded meat and prepared goods, and the market pickles and enemas appeared in advance, overdrawing the later pork consumption . Although pork consumption showed a short-term correction after new year’s day, the local outbreak had a heavy impact on the catering industry and tourism, coupled with the change of consumer consumption structure, resulting in the overall weakness of pork consumption and directly suppressing the rebound of pig prices.
From the supply side, by the end of the third quarter of 2021, the number of live pigs in China had exceeded 430 million, a year-on-year increase of 18.2%, and the number of fertile sows in China had reached 44.59 million, a year-on-year increase of 16.7%. In addition, many farmers will focus on marketing before the Spring Festival, which leads to the loose overall supply of the pig market.
Wang Na, research director of Everbright futures Shenzhen Agricultural Products Group Co.Ltd(000061) : at such a time node, the supply pressure is large and the demand is relatively weak, so the whole price will remain relatively weak before the Spring Festival. After the Spring Festival, the demand will be weaker and the supply will continue to increase, so we should be alert to the risk that prices will continue to decline after the Spring Festival.
prevention of loss risk in pig breeding
financial instruments
The reporter learned in the interview that when the pig market continues to be depressed, the more , more farmers and breeding enterprises begin to use financial instruments to avoid risks.
Bi Yan is a pig farmer in Zhang Jia Jie Tourism Group Co.Ltd(000430) Hunan. At present, her pig breeding scale is about 1000. After ten years of pig breeding, she has also witnessed several rounds of fluctuations in pig prices, but she also met the decline in 2021 for the first time. In March and April of 2021, the price fell, and the price was lower in June. The local price once fell to more than 5 yuan per kilogram. The pig weighing 300 kilograms will lose thousands of yuan.
Bi Yan told reporters that although the pig price fell sharply in 2021, because her county is a pilot of “insurance + futures”, all her pigs were insured with a pig price insurance, which also reduced her loss to a certain extent. in August 2021, she sold more than 400 pigs, and the sales price was 15.8 yuan / kg, which was 17.3 yuan / kg lower than the insurance target price, triggering the insurance claim of pig price, and she received a compensation of more than 62000 yuan . Bi Yan said that when the price is low, there is a “insurance + futures” bottom, and when the price rises, sell pigs to make money.
Some large breeding enterprises actively participate in futures hedging and avoid the risk of price fluctuation through the futures market. one year after the listing of pig futures, more than 10 listed companies have planned to use the futures market for auxiliary operation, and more than 90 breeding enterprises have applied for hedging qualification.
Hu Wei, vice president of Dekang group: futures can hedge, enable us to find the price at a reasonable time, intervene in advance and lock in the risk.
Jiang Guojin, chairman of COFCO Jiakang group: we should guarantee everything this year. 90% of the output is basically hedged.
(source: China Central Television finance and Economics)
