Slight rebound in China's pig prices
The Chinese pig prices have stabilized at $2.40 over July, after 6 continuous months of decline. The average price is just a little above the levels reported in July 2018, a month before the first ASF outbreak in the country. Meantime, official reports say that China's pig population has now fully recovered to pre-ASF levels. According to the Ministry of Agriculture and Rural Affairs announcement, sow production numbers through June were reported to be 45.64 million head, up 9.34 million from the same period last year. The number of pigs sold to the market was 337.42 million, an increase of 86.39 million. However, MARA also reported that in July for the first time in 21 consecutive months, the sow inventory actually declined by 0.05%.
The recent expansion by large pig enterprises has apparently created an excess of production capacity within the industry. Some sources are saying 2021 production may reach the 688.63 million head of 2017. At the present, there are reported to be 376,500 pig enterprises in China.
"Since the beginning of the year, pork prices across the country have fallen sharply, causing widespread concern among producers. Consequently, many companies are re-evaluating their plans and making changes. We have seen companies selling off divisions and making changes to Senior Management.
Costs of production have increased due to high indebtedness from recent expansion, high grain costs, and a tight labor market. Estimates are, producers are losing $35-$50 per head or even more. For any company with one million or 10 million pigs, those kinds of losses cannot be sustained without change or intervention. There will be winners and losers similar to what occurred in the USA in the ’90s when a number of companies kept operating but under different ownership.
It is interesting to note the growth of the World’s Mega Producers within China. Prior to ASF, there were only two Mega Producers producing 10 million pigs per year. By the end of this year, there may be 4-5 reaching this magnitude if their planned expansion is realized. Accordingly, there may be more than 10 World Mega Producers each with more than 1 million sows by the end of the year," informed Lyle L. Jones, Director of Sales China, Genesus Inc in his latest market report.
However, the future is still uncertain for the Chinese pig sector, as ASF still threatens the national inventory due to new virus mutations reported earlier this year and low productivity in breeding farms.
While pork consumption may rise over the coming months, a combination of pre-maturely slaughtered pigs and low-performance efficiency in farms could have an impact on pork production levels this year. "While the industry is dealing with supply issues and price control measures, Mother Nature and disease are still forces to be reckoned with. The extremely cold winter in parts of the country combined with mutated ASF virus caused large numbers of sows to be culled resulting in decreased production.
Another aftermath, of the mutated virus, were pigs that were slow-growing or pigs slaughtered pre-maturely. Reports said up to 20% more lightweights sold as a result. The combined effect of sows affected by the vaccine rushed to slaughter and early selling of lightweight pigs apparently resulted in an abundance of cheap meat on the marketplace. One can only wonder how much of this is still occurring? Due to the shortage of breeding animals, many large-scale farms were populated with multi-cross females of low-performance efficiency. When one compiles data from leading public companies, it seems to indicate very low 10-12 PSY production. It is hard to know if these numbers are accurate or simply a reflection of the poor performance of these 3-way, 4-way, and 5-way cross females," added Mr. Jones.
This measure, in his opinion, does not at all reflect the important advances that the Spanish liv...
Soren Skou was elected chairman, and Daniel O. Pedersen and Ulrik Bremholm were elected to the tw...
Lambs tailed in the South Island decreased by an estimated 645,000 head (-6.4%) compared to 2023,...
