Chinese Pig Prices Hit 15-Year Low as War Costs Worsen Margins

8{}2v7shsbvsl5z][61w6onb_media_dl_1.png Shanghai JC Intelligence Co.Article content(Bloomberg) — Chinese pig farmers are facing worsening losses, as tepid domestic consumption of pork is compounded by rising costs from the war in Iran.Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentThe government has been urging breeders since last year to reduce sow numbers and slaughter rates to better align supply with demand. It did so again last week, and also said it’s buying frozen pork for state reserves to support the market. The intervention comes after pig prices crashed to their weakest in at least 15 years, according to data from Shanghai JC Intelligence Co., and producer margins plumbed four-year lows.Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Article contentArticle contentEconomic growth in China has sputtered since the pandemic, and households are spending less on their favorite meat. The government, meanwhile, is keen to keep food deflation at bay as it pursues an economic agenda based on lifting consumption.Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article contentBut farmers haven’t cut their cloth accordingly, and there’s still a surplus of sows for breeding. Feeding those vast pig herds could become more expensive as global agricultural markets respond to disruptions to energy and fertilizer supplies from the Middle East.Article contentThe two main feed ingredients, soybean meal and corn, have jumped on the Dalian exchange since the US and Israeli strikes on Iran began. The stress on crop markets will only get worse the longer the Strait of Hormuz is effectively blocked to shipments. Article contentThe squeeze on incomes, and the government’s pressure, could force China’s farmers to hasten production cuts over the next two quarters, or even exit the industry, according to a note from commodity market researcher Mysteel. Article contentMood DarkensArticle contentPig farmers have been in the red for months, but the economics has deteriorated rapidly in the weeks since the lunar holiday, a high point for demand. Breeders are now losing more than 400 yuan ($58) on each animal, an unsustainable amount that’s causing widespread pessimism in the industry, Mysteel said.Article contentArticle contentWholesale pork bought by retailers has dived to about 17 yuan a kilogram, another four-year low. That should mean cheaper prices in the shops, which are closely monitored by the authorities because of pork’s heavy weighting among foodstuffs in the consumer price index. Article contentDuring the African swine fever epidemic at the turn of the decade, wholesale pork cost over 50 yuan a kg, when disease and livestock culls pushed sow numbers below 20 million. With the government’s help, producers rapidly boosted the size of the herd back above 40 million head, but they overshot demand just as the pandemic was crushing the economy.Article contentAlthough the number of sows was trimmed to 39.61 million last year, that’s still above the 39 million head that the government has deemed reasonable — a level that could be revisited if the industry’s slump persists.Article contentOn the WireArticle contentPremier Li Qiang pledged to address worries that trade partners have about China’s large surplus, underscoring Beijing’s concern the issue could disrupt relations with more nations during a truce with the US in the tariff dispute.Trending Garry Marr: Why it could be the right time to walk away from your real estate Personal Finance Oil prices could get high enough to force a COVID-level lockdown Commodities Public-private partnership launches $1.3-billion fund to purchase unsold GTA condos Real Estate Canadian housing bears now have nine reasons backing them up Mortgages TC Energy could be open to return to B.C. 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Article contentThis Week’s DiaryArticle content(All times Beijing)Article contentMonday, March 23:Article contentChina Development Forum in Beijing, day 2Sinopec earnings webcast for investors at 12:15; media briefing at 15:00Zijin Mining earnings webcast at 10:00EARNINGS: Laopu GoldArticle contentTuesday, March 24:Article contentBoao Forum for Asia in Hainan, day 1Magnetic Materials Industry Chain exhibition in Shanghai, day 1Fastmarkets Battery Raw Materials conference in Shanghai, day 1EARNINGS: WH Group, China Oilfield, Anhui ConchArticle contentWednesday, March 25:Article contentCCTD’s weekly online briefing on coal markets, 15:00Chinese government meets with domestic metals traders to address intensifying export restrictions on rare earths and critical mineralsClean Energy Expo in Beijing, day 1Magnetic Materials Industry Chain exhibition in Shanghai, day 2Fastmarkets Battery Raw Materials conference in Shanghai, day 2Boao Forum for Asia in Hainan, day 2EARNINGS: Maanshan Steel, JL Mag, CGN Power, Mengniu DairyArticle contentArticle contentThursday, March 26:Article contentEU-China think-tank conference on climate cooperation in BeijingBASF’s Guangdong petrochemical plant opening ceremonyClean Energy Expo in Beijing, day 2Magnetic Materials Industry Chain exhibition in Shanghai, day 3Fastmarkets Battery Raw Materials conference in Shanghai, day 3Boao Forum for Asia in Hainan, day 3EARNINGS: Cnooc, Jiangxi CopperCnooc earnings briefing in HK, 17:00Article contentFriday, March 27:Article contentChina’s industrial profits for Feb., 09:30China’s weekly iron ore port stockpilesSHFE’s weekly commodities inventory, ~15:30Clean Energy Expo in Beijing, day 3Boao Forum for Asia in Hainan, day 4EARNINGS: BYD, Tianqi Lithium, Chalco, CMOC, Citic Ltd., Eve Energy, Goldwind, China CoalArticle contentSaturday, March 28Article contentNothing major scheduledArticle contentSunday, March 29Article contentEARNINGS: PetroChinaArticle contentShare this article in your social networkCommentsYou must be logged in to join the discussion or read more comments.Create an AccountSign in Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information. Garry Marr: Why it could be the right time to walk away from your real estate Personal Finance Oil prices could get high enough to force a COVID-level lockdown Commodities Public-private partnership launches $1.3-billion fund to purchase unsold GTA condos Real Estate Canadian housing bears now have nine reasons backing them up Mortgages TC Energy could be open to return to B.C. LNG pipeline project as global gas crunch threatens Oil & Gas