The unstable situation in the pork market continues to persist, with the farming industry still operating at a loss, reflecting the current reality of the pork market.
The root cause of the problem lies in the excessive number of pigs.
The situation in the pig farming industry has always been like this.
When the market is profitable, enterprises expand their production scale.
Coupled with the influx of external capital, production capacity increases significantly, leading to intensified industry competition, making it difficult for the pork market to breathe.
This situation is not limited to China.
Recently, there have been reports that the American meat giant Tyson Foods announced the permanent closure of its large pork processing plant in Perry, Iowa, due to a significant drop in pork prices in the United States, leading to severe losses for the company.
Similar situations have occurred last year as well. The largest pork producer in the United States, Smithfield Foods, closed more than 60 large-scale pig farms due to pork oversupply and insufficient consumer demand.
In fact, the core of the problem lies in oversupply and weak demand.
From a global perspective, the pig industry is facing the same dilemma.
Firstly, the growth of pig production capacity is relatively easy, but liquidation is extremely difficult.
In China, with the rapid expansion of pig production capacity, liquidation has always been a problem.
The first round of liquidation mainly targeted small and new pig farmers because of their weak risk tolerance.
However, after the first round of competition, the speed of liquidation has significantly slowed down as it has evolved into competition between enterprises.
American pig giants also face the same problem. It's very difficult for them to reduce production capacity in order to maintain market share and position.
Secondly, weak demand is a global issue.
Especially after the epidemic and changes in monetary policies by the Federal Reserve, economic downturn pressures have increased, suppressing demand.
Similar to the pig cycle, the economy also has its cyclical nature, but it is more complex and enduring, and weak demand is not a problem that can be solved in the short term.
In addition to supply-demand imbalances, American pig enterprises also face another issue, which is exports.
In addition to domestic consumption, a considerable portion of American pork is exported to other countries, especially China.
China is the world's largest consumer and importer of pork. However, with the rapid increase in domestic pig production capacity, pork imports into China have rapidly declined, putting pressure on American pork enterprises.
Moreover, in recent years, the export position of many American agricultural products has declined.
For example, soybeans and corn have lost to Brazil, and China recently canceled some orders for American wheat, in addition to the lagging behind of American pork exports compared to Brazil.
The market environment has changed after the epidemic, and the United States may not have anticipated that its export advantage in agricultural products is gradually diminishing, which may be the most worrying issue for the entire American agricultural industry.
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