Hog price decline pulls down poultry, but industry expects quick recovery

The decline in hog prices has weighed on poultry prices over the past three months. National average hog prices have fallen 46% since late October and were 15.51 yuan/kg on Wednesday.

Poultry prices are still relatively strong but have pulled back in late December and early January. 

Wen’s, one of the largest publicly listed poultry and hog producers, noted that their average selling price for poultry in December was 15.47 yuan per KG. Although prices slid in December, they were still up 17.2% year on year. 

Business news outlet Caijing noted, “according to industry insiders, there is a strong substitution relationship between chicken and pigs prices.”

Q4 in 2022 saw an increase in hog slaughtering, including farmers selling hogs fattened to higher weights amid high prices. This pushed down hog prices but also weighed on poultry prices. 

At the same time, demand has suffered due to lockdowns and consumers avoiding public spaces due to the outbreak of Covid after restrictions were lifted. 

Most in the industry are optimistic about a rebound in recovery. Xiangjia, another large publicly listed poultry producer, noted that February should see an increase in demand as students return to school, workers return to offices, and restaurant demand increases. 

The domestic industry also stands to benefit from the bird flu outbreaks elsewhere. Many consumers are hesitant about consuming foreign poultry products given the large-scale bird flu outbreaks in other countries.