Pig prices dip to low levels or stimulate industry capacity reduction acceleration

According to monitoring by the Ministry of Agriculture and Rural Affairs, on April 3rd, the average price of pork at national agricultural product wholesale markets was 15.15 yuan per kilogram, a decrease of 3.7% compared to last Friday (March 27th), when it was 15.73 yuan per kilogram. The average price this week was 15.34 yuan per kilogram, down 3.2% from last week’s average of 15.84 yuan per kilogram. Guoxin Futures believes that, from a fundamental perspective, the slaughter plans for group farms will continue to increase in April, and the average weight has begun to decline, indicating that group farms are actively reducing inventory; individual farmers’ pigs continue to increase in average weight, with some holding onto pigs in hopes of higher prices. From the perspective of the entire industry, the average slaughter weight has slightly decreased this week, but the absolute level remains high, reflecting a slow progress in industry inventory reduction. Currently, the pig-to-feed ratio is at a low level, lacking economic justification for holding onto pigs, which may force the industry to accelerate inventory clearance in the future. In the medium term, based on previous piglet birth data, it is expected that the theoretical supply of breeding pigs will remain high until the third quarter, prolonging the supply pressure. In the long term, the current piglet peak season is unprofitable, which will stimulate the industry to accelerate capacity reduction; future focus should be on monitoring the slaughter