Hog producing margins could turn positive in Q3: ministry

Margins for hog producers in China could turn positive as early as next quarter as the cost of farming has fallen, a top official from the Ministry of Agriculture and Rural Affairs (MARA) said Wednesday.

Live hog producing margins could flip from the current level of -300 yuan/head ($47/head) into a positive level, according to Yang Zhenhai, the director of Animal Husbandry and Veterinary Bureau at MARA.

“With the number of new-born piglets retracing from the high level and feed costs also falling, hog farming is expected to turn a loss into a profit in the third quarter,” said Yang.

This latest view echoed market expectations of a price-rebound for live hogs in the second half of this year as large companies continued to trim their herd size.

Margins for hog producers have remained mostly negative for the past year, which had a ripple effect on the price and demand of grains, oilseeds, meals and even fertilizers.