China Pig Farmer Profits Soar After Disease Wipes Out Third Of Herd, Boosts Prices | 1/17/2019 | Staff
BEIJING (Reuters) – Pig breeders in China who have managed to keep fatal African swine fever off their farms since outbreaks began a year ago are now set to reap rewards, with some in line for record profits of $200 per hog thanks to soaring prices.

The virus has reached every province of the world’s top pork producer. The pig herd shrank a third in July from the same month a year ago, according to the Ministry of Agriculture and Rural Affairs, though many observers believe half the herd is already gone.

June - Production - Price - Surge - National

Since June, slumping production has triggered a price surge. National average hog prices passed the 2016 record of 21 yuan per kilogram earlier this month to hit 24.6 yuan ($3.48) per kg on Aug. 19, according to data from Shanghai JC Intelligence Co Ltd.

That trend is unusual: Hog prices are typically weak in summer months when pork demand is lower, and start rising in September at the start of the peak season.

Timing - Pan - Chenjun - Analyst - Rabobank

“The timing is earlier than expected,” said Pan Chenjun, senior analyst at Rabobank. “August is still the low season but now everyday we see an increase in price.”

The high prices will eat into profits at processors like WH Group, which last week reported a 17% decline in first half profits and warned that prices are set to keep climbing.

Hog - Prices - South - Disease - Area

Hog prices in the south are especially strong, after the disease ravaged the area in recent months. Production had already been on the wane in the area for years after provincial governments shut down farms near water sources and population centers in a drive to clean up the environment.

Live hog prices in Guangdong have rocketed to more than 28 yuan per kg, double the level in...
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