The National Development and Reform Commission, China’s national macroeconomic planning agency, said on Friday that hog prices remain too expensive.
In a statement on its public WeChat, the commission said experts agreed that the current live hog price was too high.
After a historical analysis of previous hog price cycles, industry experts determined that prices should average 20-21 yuan per kilogram.
Live hog prices have continued to shoot higher this week. As of Friday, national average prices hit 27.73 yuan per KG. Prices have risen 12.8% since the start of the month.
The commission attributed the rapid rise in hog prices to “irrational behavior” on the part of hog farmers. Amid rising prices, many hog farmers are feeding hogs to heavier weights in order to generate more revenue. Commonly referred to as “second fattening” in Chinese, this holding back of supplies has pushed prices higher.
The announcement further said that prices have reached an excessive level and that farmers should take profits as the risks of price fluctuations has increased.
Frequent sales of reserve pork have done little to calm the market or dampen prices in recent months. After an extended period of negative margins, many hog farmers are looking to make up for losses and are willing to hold out for higher prices.