Despite the increase in production, the pig herd shrank from the previous quarter’s 452.56 million to 430.94 million. This was because many farmers rushed to offload their pigs ahead of the Lunar New Year festival in late January, which is normally the peak demand season, but saw a slump in demand due to a surge in COVID-19 cases.
The low demand and high slaughter volume put pressure on hog prices, which have been hovering at low levels since the start of the year. In fact, farmers in the major producing province of Henan are losing about 176 yuan per head, and prices may not pick up until the end of the second or third quarter, according to Pan Chenjun, a senior analyst at Rabobank.
Pork output also rose as many farmers expected a recovery in demand during the fourth quarter of 2022 and raised hogs to heavier weights to benefit from anticipated high prices. However, the spike in disease outbreaks forced many to cull their pigs, leading to a higher slaughter number of 198.99 million hogs in the first quarter, up 1.7% from the same period a year earlier.
In late March, major hog producer New Hope Liuhe informed investors that a “relatively large” number of sows in northern China’s Henan and other provinces had been culled since December, and that the mortality rate of weaned piglets had also increased in the first quarter. Despite this, pork output in the first quarter was the highest since the fourth quarter of 2017.