How does pig price move outside Europe?

Pig prices in the United States have been in a downward slide since mid-August. Since then, the Iowa/Minnesota price has fallen 35% to $1,93 per kilo. This decline is not surprising and fits in almost seamlessly with the seasonal pattern on the American pig market. The decline usually continues until mid-December. Despite the significant write-down, pig prices are still at a high level. Never before have the ratings been so high at this time of year. Pig farmers also need the higher benefits, given the feed and energy costs that have also risen sharply in the US.

The American pig herd finds support from a tightening supply. There has been a decline in the pig herd since 2019. The US had 73,8 million pigs in September, a decrease of 1% compared to last year. The pork market is supported by the high prices for beef and poultry, analysts write. At the same time, signs of a drop in demand are also visible.

Frozen pork stocks have increased considerably since April to around 240.000 tons, according to figures from the US Department of Agriculture (USDA). This is considerably higher than in corona years 2020 and 2021, but well below the level of 2019. In the wake of the pig prices, meat prices have also fallen quite sharply, including bacon prices. This will enable supermarkets to also reduce consumer prices, analysts expect. This can stimulate consumption. Moreover, the US has been able to publish better export figures to China since the summer. This could possibly relieve the market. Europe is also benefiting from improved Chinese demand, according to the export figures for August. Whether the upward trend will continue remains to be seen.

Chinese pig herd growth is faltering
In any case, the Chinese demand increase did not come out of the blue. Figures from the Chinese Ministry of Agriculture show that the growth of the number of pigs in China is faltering. In the third quarter, 154,5 million pigs were slaughtered in China, a fraction more than the same period last year. The number of registered pigs grew from 438 million to 444 million, an increase of less than 1,5%. Chinese pig farmers are reluctant to increase production, partly due to high feed costs.

Due to the leveling off growth, production is lagging behind 2018, when the country was confronted with African swine fever. Tens of millions of pigs were subsequently culled. Despite ongoing lockdowns in the country, pork consumption is good, analysts indicate. This has affected pork prices a boost datum. Compared to a year earlier, prices have skyrocketed.

From mid-August to mid-October, the average Chinese pork price rose another 20% to just under 28 Chinese yuan per kilo, the highest level since early 2021. Meanwhile, prices have fallen back to below 26 yuan. According to analysts, the market is volatile because producers held onto pigs during the price rally. The slaughter weights therefore increased to sometimes 150 kilos. Despite the correction that is now visible, analysts expect continued high pig prices.