SunSirs: Slow Start to Peak Season Demand Ahead of Spring Festival; Average Hog Prices Decline Week-on-Week

According to monitoring by the Ministry of Agriculture and Rural Affairs, the average wholesale pork price across national agricultural markets stood at CNY18.61 per kilogram on January 30, marking a 0.6% increase compared to CNY 18.49 per kilogram recorded two weeks prior on January 23. Last week's average price was 18.65 RMB/kg, up 0.8% from the previous week's average of 18.5 RMB/kg.

Domestic hog prices showed a slight increase followed by a sustained decline last week, with the weekly average price falling compared to the previous week. Data shows that on January 30, the price of live hogs (foreign three-way crossbred) was CNY 12.52 per kilogram, down 3.2% from CNY 12.93 per kilogram on the previous Friday (January 23). The weekly average price last week was CNY 12.81 per kilogram, a 2.3% decrease from the previous week's average of CNY 13.11 per kilogram.

Recent pork and hog prices. Table compiled by The Paper

Last week, the national average transaction weight for hogs continued to decline slightly. The national average transaction weight was 124.33 kg, a marginal decrease of 0.14% week-on-week. This week, transaction weights across provinces showed a pattern of declines in the north and increases in the south. In northern regions, farmers continued to reduce weights at slaughter, accelerating market-ready hog shipments. Coupled with widening price differentials between fattened and standard hogs, slaughterhouses passively reduced purchases of high-priced large hogs while increasing the proportion of low-priced standard hogs acquired. This led to simultaneous declines in both slaughter and purchase weights. In southern regions, some areas lagged in completing slaughter schedules. Near month-end, increased shipments and accelerated sales of previously held hogs boosted the proportion of large-weight hogs slaughtered, driving a slight increase in average weight. Last week, the operating rate of key domestic hog slaughterhouses rose week-on-week, averaging 41.28%—up 0.40 percentage points from the previous week. The increase was supported by heightened downstream stockpiling demand ahead of the Laba Festival, which boosted slaughterhouse orders. Although orders have since declined, they remain at relatively high levels.

The expectation of increased supply and reduced weight at the farming end has begun to materialize. Currently, demand is in a vacuum period before the Laba Festival and Little New Year stockpiling, with slightly insufficient absorption capacity during the week. This week will see the start of concentrated pre-holiday stockpiling, marking a critical juncture to verify supply-demand alignment. Key focus should be on slaughter volume and price performance. With concentrated release of corporate and social hog supplies, pork prices are likely to face pressure during the peak season. Official year-end breeding sow data fell short of market expectations. Profit recovery has hindered breeding herd reduction, and capacity adjustment remains in a bottoming-out phase.

Based on earlier piglet birth data and hog feed production/sales, theoretical marketable hog output will remain elevated through Q2. Breeding sow inventory reduction in Q4 fell short of policy targets, warranting attention to potential new policy guidance. In the short term, pre-Spring Festival peak demand has started slowly, while earlier backlogs from second-round breeding and delayed sales have created high live inventory. As the pre-holiday peak window narrows, heavyweight hogs may be difficult to clear, indicating lingering digestion pressure post-holiday.

Nationwide market trends over the coming week are projected to follow a pattern of decline, rebound, and subsequent retreat. On the supply side, breeding groups maintain high slaughtering enthusiasm, with some setting clear weight reduction targets. This may lead to early release of lighter-weight hogs, exerting significant downward pressure on prices. Only around month-end or month-start may a brief stabilization or slight increase occur. On the demand side, the return of migrant workers to their hometowns in some southern regions will dampen local consumption. While slaughter volumes in northern regions are expected to increase only moderately for now, the period after the 15th day of the 12th lunar month may see slaughterhouses entering a concentrated stockpiling phase, boosting demand and providing some support to the market.

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