Are American investment banks suppressing pig prices? The live pig price has dropped to 5 yuan, are Chinese farmers suffering huge losses?

While everyone is watching the AI competition between China and the U.S. in the tech field, on a secret battlefield, a war concerning the food on Chinese people’s tables is quietly unfolding.

By March, the national pig price has fallen below 5 yuan, for Chinese pig farmers, selling one pig results in a loss of 500 yuan.

Behind the long-term drop in pork prices below cost, is it caused by the pork cycle, or is someone deliberately suppressing it? What kind of damage will the prolonged low pork prices bring to China’s food security?

When Chinese farmers encounter “financial hunters”

According to the latest data from the pork futures market, as of March 28, the price of live pigs officially dropped below 15 yuan per jin. It is the lowest price in history.

In the impression of Chinese people, pig farming is a typical heavy-asset, long-cycle, weather-dependent difficult business.

China is a major consumer of pork, especially now, where people’s dining tables are almost inseparable from pork. This is a business that can support a country’s economy; because China’s pork consumption is very high, pork accounts for about 10% of the overall CPI.

Its price increase can drive up the prices of vegetables, fruits, and eggs.

CPI is also an important indicator affecting national economic policies, so controlling pork means, to some extent, controlling China’s monetary policy.

In 2023, Goldman Sachs spent nearly 2 billion RMB, fully acquiring more than a dozen pig farms in key Chinese breeding regions such as Hubei and Fujian, investing heavily in China’s pork industry.

Goldman Sachs is not acting alone but is collaborating with the four major international grain traders—ADM (USA), Bunge (USA), Cargill (USA), and Louis Dreyfus (France). These four grain traders now almost dominate all global feed business.

They first push up feed prices, making cheap soybean meal and corn unavailable for pig farmers. When pig prices do not rise but fall, many small and medium-sized pig farms go bankrupt, allowing them to buy at low prices.

This way, they gain control over the decision-making power of China’s pork prices.

Their approach is fundamentally different from the familiar “company + farmer” model. While domestic farmers are struggling with African swine fever and environmental pressures, international players are playing the game of commodity pricing, global supply chains, and risk hedging.

Therefore, when the alarm sounds that “pork prices have fallen below 5 yuan,” many small and medium players at the table feel hopeless about profit and can only exit.

At this moment, China’s pork market is essentially dictated by American investment banks and the four major grain traders.

The sharp decline in pork prices makes many think that the reason for this brutal “super pig cycle” dip is due to the resonance of multiple historic factors.

Some simply attribute it to the previous African swine fever-induced high profits, which led the entire industry into years of irrational expansion and frenzy.

From giants to small farmers, everyone is desperately building pigpens and抢母猪, leading to overcapacity and low prices.

In the past, prolonged low prices would have caused many small pig farmers to give up, clearing out capacity. But this time, it’s clearly different.

This round of pork price decline is aimed at some large domestic pig farming companies.

The prices of main feed ingredients like soybean meal and corn, along with the global operations of those “ABCD” grain traders, have fluctuated worldwide over the past two years, transmitting to China and pushing up feed costs.

On the other hand, environmental regulations, land use, and labor costs are also rising. Costs are skyrocketing, but pig prices “refuse to rise,” with farmers saying “selling is like cutting flesh, not selling is waiting to die.” This creates a deadly scissors effect: the slaughter price drops to 5 yuan, but the total cost is 7.5 yuan. Every pig sold results in hundreds of yuan in losses, forcing domestic breeding enterprises to shut down.

Under these circumstances, if Goldman Sachs and foreign giants leverage their capital advantages to outlast these companies, they can control China’s economic lifeline.

This means that in the future, our pork will be fully controlled by a few giants or international capital.

The pork issue has never been just an agricultural problem; it is also a livelihood issue and a strategic issue.

A Wall Street super consortium is deeply interested in China’s pig industry, investing for decades to control our grain, soybeans, cooking oil, and pork enterprises. Naturally, we cannot let them succeed. We hope to modernize agriculture so that future generations won’t have to carefully budget for prices of cabbage or pork belly, and that the country will no longer face rural issues, laying a solid foundation for building a socialist modern country, ultimately realizing the rise and great rejuvenation of the Chinese nation!

Author’s note: Personal opinions, for reference only.