Hog slaughter margins showed a modest recovery in November as prices fluctuated downward while demand gradually improved. Analysts suggest further upside potential in December with seasonal demand peaking.
**November Hog Slaughter Margins Edge Higher** According to Sublime China Information (SCI) monitoring, hog slaughter margins rebounded from lows in November, averaging 38.28 yuan per head—down 2.93% month-on-month but up 53.25% year-on-year. By November 28, margins reached 43.97 yuan per head, marking a cumulative increase of 11.85 yuan (36.89%) since late October. The improvement was primarily driven by slightly better sales of pork carcasses by slaughterhouses.
**Slaughter Volume Picks Up** Daily hog slaughter volumes at SCI’s sampled enterprises trended upward in November, rising 1.27% month-on-month. Cumulative volume by month-end was up 6.97% compared to October. Demand growth was limited in the first half of November, with brief declines due to weak carcass sales. However, colder temperatures later in the month boosted downstream demand, leading to a noticeable uptick in slaughter volumes, particularly in the latter half. Increased throughput reduced per-unit costs, supporting margin expansion.
**Price Trends Support Margins** Both hog and pork prices declined in November, but the drop in pork prices was milder, widening the carcass-to-live-hog spread and further lifting margins. By month-end, the national average pork carcass price stood at 14.72 yuan/kg, down 7.23% from October, while live hog prices fell 10.69% to 11.11 yuan/kg. Monthly averages showed pork at 15.15 yuan/kg (up 2.73% MoM) and hogs at 11.59 yuan/kg (up 0.60% MoM).
**December Outlook: Seasonal Demand to Drive Margins Higher** Historical patterns and current stocking trends suggest December slaughter volumes could peak outside of Lunar New Year preparations, coinciding with traditional cured meat demand. Slaughterhouse utilization rates may rise 10–15 percentage points from early-month levels, further lowering per-unit costs and benefiting margins. Stronger end-market demand is expected to widen the pork-hog price spread, creating additional margin room. SCI forecasts hog slaughter margins to rise month-on-month in December, likely peaking mid-month before a slight pullback.
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