Quarterly update: China’s pig cycle is felt across the planet


John Strak, Pig Progress 



With half of the world’s pigs within its boundaries, China has a profound impact on pig prices on the planet. In the aftermath of the ASF crisis, many countries rushed to fill the Chinese voids – and now China is restocking its herds, the demand from the Far East drops. The result is low prices virtually everywhere, writes pig market expert Dr John Strak in his quarterly update.


In early July this year I ended my regular commentary on the global pork market by saying, “…. the chart (for the global pig price cycle) suggests that a turning point is unlikely before October… The caveat is China – if exports to that market drop sharply that might be enough to pull global pig prices down as fast as they went up. As ever, it seems, it’s all about China.”


And now that we have arrived in final quarter of the year we can see that China has indeed sent a tremor through the global pig and pork market. A turning point in global pig prices is just about with us and China’s demand for imported pork has collapsed. Even though it appears that the supply of pigs in North America and Europe is contracting, the collapse of domestic pig prices in China as a wall of pigs comes to market there may have been the reason why global pig prices have weakened in the major exporters’ home markets.


Figure 1 illustrates these points. The global pig price index has slowed its upward movement and is about to turn down. The weekly rate of change in the global pig price index has moved from high positive percentages to being only just positive (+0.02%). Next month the index will be in negative territory – we will enter the downward phase of the cycle.


Lowest point of Chinese pig slaughter ...


The mother of pig price cycles ...


Hog prices in the United States


I had expected US hog prices to be firmer in the 2nd half of 2021. Figures 5 and 6 present the daily hog price data through to the end of the 3rd quarter. These prices have been higher than last year and have followed the normal seasonal pattern but the fall from their peak level in May 2021 has been sharp and uninterrupted.


The charts show how steep the fall in US hog prices has been. The US economy has made a reasonable recovery from Covid-19 and lockdown policies do not seem to be a major obstacle to appetites, employment or growth but US hog farmers are reported to be suffering from PRRS in their herds. This disease and uncertainties about feed prices and export markets may have sapped their confidence. The discovery of ASF in the Dominican Republic and Haiti will not have helped their outlook.


EU pig farmers are not inclined to expand ...  


Supply side of pig industry is not robust ... 


The premium for local pork chains ...


more, including charts [6]