As of August 21, 2024, the price of slaughtered pigs in China rose to a new high of 20.77 yuan/kg ($1.32/lb), up 0.11 yuan/kg from August 5, 2024, and up from the yearly low of 11.98 yuan/kg ($0.76/lb) on March 18, 2024.
In southern China’s Guangdong province, slaughter pigs can sell for as much as 22.6 yuan ($1.44/lb).
This is a good sign for China’s pig farming industry after 22 months of market decline coupled with high feed and labor costs. Profits for pig farmers are estimated at $100-$115 per pig, depending on slaughter weight and raising costs.
The shortage of pig supply is the main reason for the high pig prices. Industry insiders expect pig prices to continue rising until the end of 2024 and even surpass the peak of 2022.
Currently, China’s pig farms are largely empty, and pig farms in China are below capacity as many small, old facilities have been abandoned. Medium-sized farms are operating at only 40-50% capacity. Newer, larger farms built after 2021 with a focus on biosecurity are likely to still be operating at up to 80%.
Producers with access to capital will have room to increase productivity if they have confidence in the market and pig prices remain high. Meanwhile, China’s Ministry of Agriculture, provincial and local governments are trying to manage production capacity with targets and control of sow inventories, and monitoring the effectiveness of this measure.
The best long-term solution to maintain profitable pork prices is for the industry to focus on improving meat quality and increasing consumer demand. Most of the R&D activities of Genetic companies are based on meat quality, but they are untargeted and over-exaggerated, resulting in bland, dry, and tasteless products. China has not yet realized the increase in consumer demand in the domestic market outside of the holiday and festival season.
From September 10 to 12, 2024, the Global Pork Genetics Summit (GPGS 2024) will take place at the Intercontinental Hotel Hefei, China. Jim Long Genesus CEO will give a perspective on the Global Market. Spencer Long Genesus Marketing Director will present “The Whole Pork Industry Issue”.
Thuy Chung
Source: Vinanet/VITIC/swineweb.com