Pork supply increased in 2017, and hog price is predicted to be about 14.5yuan/kg in 2018

By CnAgri2018-02-09 09:40:03 Print The average price of hog dropped to 13yuan/kg from 18yuan/kg in the first five months of 2017, and basically maintained 14-15yuan/kg in the second half of 2017, seeing great decline from 2016. Even so, hog farming still achieved normal profits. Under the circumstance that national inventory of reproductive sow decreases and the capacity in breeding-prohibiting area reduced sharply, why hog price still declined in 2017? According to the data from the MOA, the inventory of reproductive sow was 34.7 million head in November, 2017, down 5.81% year on year; but the average weight of hog for slaughtering increased 3% year on year, and MSY rose by 5.3% year on year. We estimate that domestic pork supply increased about 4% in 2017.
 
In addition, relative low prices of corn and soymeal led to decrease in feed cost, which also is an important reason for the decline in hog prices.
National environmental regulation was accelerated in 2017, and a capacity of about 30 million hogs in breeding-prohibiting area was reduced according to incomplete statistics. But, modern and scale new projects were sped up to go into operation in 2016. Listed companies of agricultural and animal husbandry invested more than 150 hog farming projects with total an investment of over RMB 40 billion, and a capacity of more than 27 million hogs will added after these projects reach designed capacity. Together with other social hog projects, hog capacity will increase more than 50 million head, and the supply pattern of hog industry will change in trend.
 
It’s predicted that the capacity of new projects invested in 2016 will continue to be released in 2018, and hog slaughter will increase continuously. The annual average price of hog will be 14-14.5yuan/kg in 2018. If the prices of corn and soymeal won’t see sharp growth, this price range is reasonable.