Retail pig prices continue to decline during the long holiday, and the impact of changes in consumption habits is unstoppable

The "holiday consumption climax" predicted by the pig market bulls once again failed during the Golden Week holiday just past. During the National Day, pork prices in various parts of the country remained sluggish, and the current price of pigs fell below the May mark, a record low since 2018 . The reason is that the level of oversupply continues to intensify, and the change in residents' consumption habits also means that the impact of the "festival consumption climax" will further diminish in the future.

Against this background, the pig industry across the country is in deep loss. Although there has been a short-term rebound in some areas, the effect is not great. As a result, there are both dumping and reluctance activities in the terminal market, but the ability to pull prices is minimal. The continued release of new breeding capacity in the first half of the year means that the "pig cycle" is still far from bottoming.

Analysts pointed out that with the development of the economy, the consumption level of residents has undergone profound changes. In the previous period when the income of residents was low, everyone had the habit of intensively consuming meat on important holidays, which led to a small cycle of pork prices during the year with the holiday season. But now, this trend has become less and less obvious. The pig price trend curves of last month's Mid-Autumn Festival and this month's National Day Golden Week have proved this point. Although, under the inertia of traditional customs, pork demand will still peak in winter, especially before the arrival of the Lunar New Year, but its relatively usual level of increase is gradually being flattened.

At the same time, with the increase in residents' income, animal food sources have become more diversified, making per capita pork consumption actually peaked and slowed down in the past decade. After the outbreak of African swine fever at the end of 2018, people's dietary habits have accelerated, and more demand has been diverted from pork to beef, mutton, poultry, and egg markets. The price fluctuations between poultry meat and pork also show a trend that is not completely synchronized. The correlation coefficients between the prices of white feather broilers, eggs and cherry valley ducks are only less than 0.2.

The above situation shows that chicken, duck and poultry eggs are a rigid trend towards pork. Therefore, even if the price of pork drops, it will be difficult to truly regain the lost market share. At present, after the price of pork has fallen, it is still generally 1-2 times the price of white feather chicken and 2-3 times the price of white duck. Therefore, alternative competitiveness is still limited.

Under such a background, when pork consumption demand has no hope of returning to the peak before the epidemic in the short term, but the production capacity has filled the gap caused by swine fever in advance, the oversupply of pork will become a long-term structural contradiction, not a short-term explosive demand. Can be reversed. Only when the excess production capacity gradually begins to clear, the pig price is expected to usher in a new balance point after the Spring Festival next year.