Source:  Richard Smith, MEATINGPLACE, 6/23/11

Pork and live pigs prices climbed higher than the 2008 record levels and analysts say the trend will continue until the end of the year, the China Daily reported.

"Live pigs cost 18.57 yuan ($2.87) a kilo by the end of the third week in June, and the peak in April 2008 was 17.2 yuan ($2.66) a kilo. The price of pork surged to 27.67 yuan ($4.28) a kilo last week, and the peak in 2008 was about 26 yuan ($4.02)," said online pig market monitoring and analysis service Soozhu.com chief analyst Yonghui Feng.

"In some second- and third-tier cities, the price of pork rose above 30 yuan ($4.64) a kilo," Feng said.
State Information Center economic forecasting department deputy director Baoliang Zhu said he believed that prices are unlikely to fall before the end of the year. "The growth period of a pig is about a year and a half. The prices of live pigs and pork touched a bottom (last) July and have been picking up since then. The prices will keep rising till the end of the year," Zhu said.

Zhu added that the central government may have little chance to regulate prices. "Many pig farmers slaughtered breeding stock in the last production period because of losses from low prices and diseases. The government might slightly regulate the prices through the pork reserve, but pigs can't be fattened within six to eight months. So the prices will keep climbing before the next pigs reach the market." he said.

Feng said the latest price rises started May 2, when live pigs cost 14.8 yuan ($2.29) per kilo. The price shot up by 23.7 percent in a month and a half. The main reasons are the growing cost of pig farming and the shortage of stock. "Corn is the biggest force driving the prices of pork and live pigs higher and it reached a record high in March, before the pig and pork prices did," he said.

Farmers now charge 2.2 yuan ($0.34) per kilo for corn, which makes up about 60 percent of pig feed. In April 2008 it cost 1.75 yuan ($0.27) per kilo in the marketplace. Bean pulp, another important ingredient of pig feed, has dropped from 4.7 yuan ($0.73) per kilo in April 2008 to 3.28 yuan ($0.50) this year.

Growing labor costs are another factor force in the price rise. "The cost of labor went up by about 20 percent year-on-year. Migrant workers earned about 2,000 yuan ($309) a month last year, and their monthly wage is now between 2,500 and 3,000 yuan ($387 and $464)," Feng said.

The shortage of pigs came from the losses farmers suffered and diseases in the stock last year that drove many private pig farmers out of business.

Feng rejected the idea that importing pork could help solve the problems. "China accounts for half of the world's pork production, with 600 million live pigs, while the United States, the second-biggest pig farming country, keeps about 100 million pigs. Importing two or three million tons of pork may only maintain the country's pork consumption for just half a month."

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