Tuesday, January 19, 2010

Please Buy Our Pigs

Farmers in a village in Pulandian, near Dalian in Liaoning Province, want to know why no hog traders have come knocking at their door lately.

Normally, at this time of the year--ahead of the Spring Festival--hog traders will come to the village and go door to door trying to buy hogs as the peak season approaches. In previous years, farmers got a good price of 6.2 to 7.5 yuan per jin. That was enough to make a profit and encouraged them to raise hogs.

A reporter got a call from a farmer looking for help to sell pigs. The reporter went to investigate and found that nearly every family in the village raises pigs or other livestock. Ten families raise 20-30 pigs and the others generally raise 4-to-5 pigs.

Few traders came to buy hogs since last November. None came after the new year, and none called on the phone either. Farmers heard that this year's price is about 6 yuan or less, about 1 yuan lower than in previous years. With higher feed prices this year, they anticipate losses at this price. A farmer named Li said there are about 150 pigs in the village that need to be sold and the villagers are approaching the festival with trepidation.

The reporter spoke with one of the traders who said that prices are down this year, but not by too much. The usual price is about 6.5 yuan, and the pork price at the market is 9-11 yuan, but this year prices are about 1 yuan lower. The absence traders in the village is not normal, so he says. He speculates that maybe it's because of the weather.

An article about the hog situation in Sichuan Province tells a similar story. Hog slaughter there was up 3.9% year-on-year in the third quarter of 2009. The sow inventory is relatively high. This report cites mainly cyclical factors. From February to May last year, prices fell sharply. There was not widespread slaughter of pigs--they credit the government's program to purchase pork for reserves. However, some farmers culled low-grade sows during the summer and then restocked as the industry recovered in July and August. Inventories are now plentiful.

Sichuan also complains about poor prospects for exports of pork. They blame technical barriers to trade in foreign countries. They also point to rising feed costs that reduce the competitiveness of chinese pork. An official from the provincial quarantine and inspection bureau recommends that a few exporting companies strengthen and consolidate their production bases, improve animal health, and develop branded processed products to regain export markets.

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