The price of a lean hog carcass was three times its year-earlier price in Beijing's Xinfadi wholesale market on October 29, 2019. The Xinfadi market's weekly report described the nationwide competition for carcasses that is driving the price upward at an accelerated pace this month.
A daily average of 1,450 swine carcasses arrived in the Xinfadi market during the week of Oct. 19-25. The daily supply was up from its low point during the National Day holiday week early in the month, but it was 33 percent less than the 2,350 carcasses supplied daily during the same week in 2018. According to a monthly report for September, the number of carcasses arriving at Xinfadi during July was the largest in 5 years, but tight supplies resulted in a noticeable decline in carcasses arriving during August and September.
According to the reports, Beijing's market competes for carcasses transported all over the country. Most of the carcasses in the Beijing market come from the three northeastern provinces of Liaoning, Jilin, and Heilongjiang, hundreds of miles away. Some carcasses come from Yunnan Province--thousands of miles away in the southwestern corner of China. For a time in July, Yunnan was the main source of carcasses for the Beijing market because it had the lowest prices, but rising prices in Yunnan during August reduced the flow of carcasses from that provinces. Only a few carcasses come to the Xinfadi market from nearby Hebei Province and Inner Mongolia.
A September report said hog supplies in the northeast began to recover in March, but prices went up because transportation problems limited the number arriving in Beijing. The September Xinfadi report expected prices to decline after transport problems were resolved, but the rise in prices actually accelerated to an unprecedented pace in October.
Last week's report explained that prices are now rising because provinces in southern China--where production has not rebounded--have also been buying carcasses from northeastern provinces and Hebei.
The report said that increased slaughter weights are also limiting the supply of pork. Carcasses in the market are said to be about 33-40 percent heavier than usual weights. The delay of slaughter represented by heavier hogs not only reduces the number of carcasses available, but the added weight of these big hogs has a higher-than-usual proportion of fat and not that much more muscle than hogs. Thus, the market is now receiving a surplus of fatty carcasses and the premium for a lean carcass has doubled to 2 yuan or more per 500g since August, up from 1 yuan earlier in the year. Last week the price of fatty carcasses went down and the premium for a lean carcass went as high as 3.5 yuan/500g last week, but that trend appears to have reversed this week.
The Xinfadi market report says consumer demand for pork has fallen as the price has soared. Despite the limited number of carcasses available, about 10 percent are unsold and returned each day--sometimes 20 percent are returned. A September report said consumption by cafeterias and restaurants had declined the most, while purchases by consumers had not changed that much. The monthly report for September, however, said purchases by food service and individual consumers had dropped 30 percent.
A daily average of 1,450 swine carcasses arrived in the Xinfadi market during the week of Oct. 19-25. The daily supply was up from its low point during the National Day holiday week early in the month, but it was 33 percent less than the 2,350 carcasses supplied daily during the same week in 2018. According to a monthly report for September, the number of carcasses arriving at Xinfadi during July was the largest in 5 years, but tight supplies resulted in a noticeable decline in carcasses arriving during August and September.
According to the reports, Beijing's market competes for carcasses transported all over the country. Most of the carcasses in the Beijing market come from the three northeastern provinces of Liaoning, Jilin, and Heilongjiang, hundreds of miles away. Some carcasses come from Yunnan Province--thousands of miles away in the southwestern corner of China. For a time in July, Yunnan was the main source of carcasses for the Beijing market because it had the lowest prices, but rising prices in Yunnan during August reduced the flow of carcasses from that provinces. Only a few carcasses come to the Xinfadi market from nearby Hebei Province and Inner Mongolia.
A September report said hog supplies in the northeast began to recover in March, but prices went up because transportation problems limited the number arriving in Beijing. The September Xinfadi report expected prices to decline after transport problems were resolved, but the rise in prices actually accelerated to an unprecedented pace in October.
Last week's report explained that prices are now rising because provinces in southern China--where production has not rebounded--have also been buying carcasses from northeastern provinces and Hebei.
The report said that increased slaughter weights are also limiting the supply of pork. Carcasses in the market are said to be about 33-40 percent heavier than usual weights. The delay of slaughter represented by heavier hogs not only reduces the number of carcasses available, but the added weight of these big hogs has a higher-than-usual proportion of fat and not that much more muscle than hogs. Thus, the market is now receiving a surplus of fatty carcasses and the premium for a lean carcass has doubled to 2 yuan or more per 500g since August, up from 1 yuan earlier in the year. Last week the price of fatty carcasses went down and the premium for a lean carcass went as high as 3.5 yuan/500g last week, but that trend appears to have reversed this week.
The Xinfadi market report says consumer demand for pork has fallen as the price has soared. Despite the limited number of carcasses available, about 10 percent are unsold and returned each day--sometimes 20 percent are returned. A September report said consumption by cafeterias and restaurants had declined the most, while purchases by consumers had not changed that much. The monthly report for September, however, said purchases by food service and individual consumers had dropped 30 percent.
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