(Yicai) Feb. 1 -- Muyuan Foodstuff, New Hope Liuhe, and Wens Foodstuff Group, China's three major pig breeders, expect their losses for last year to exceed CNY10 billion (USD1.4 billion) in total due to excess supply and a squeeze on live hog prices.

Beijing-based Muyuan’s net loss may have tallied from CNY3.8 billion to CNY4.6 billion (USD535.3 million to USD648 million), the firm predicted yesterday. Wens is preparing to report a CNY6 billion to CNY6.5 billion deficit, while New Hope expects a CNY4.5 billion loss after deducting nonrecurring items, they said on the same day.

The companies attributed the losses to lower hog prices, as they sold more animals. Nanyang-headquartered Muyuan sold 63.8 million live pigs last year, an 80 percent increase, and Guangdong province-based Wens sold 26.3 million, an almost 48 percent gain.

A rebound in prices before the Chinese New Year holiday this month is expected to be limited, so the industry may continue to lose money, according to a report by Haitong Securities. The brokerage anticipates significant pressure on pig supplies in the coming one to two quarters, with a turning point possibly after the second quarter.

Muyuan predicted yesterday that this year's live hog supply will be smaller than that of last year, but demand will increase. It was also more optimistic about pricing. 

Throughout last year, live pigs cost CNY15.4 (USD2) per kilogram, a 19 percent decrease on 2022, Zhu Zengyong, chief pork industry analyst at the country’s agriculture ministry, said during a recent press conference.

A supply glut made the meat increasingly affordable. Last year, China produced about 57.9 million tons of pork, up by 5 percent, reaching a new high since 2015, Lei Liugong, director general of a department in the ministry, said recently.

The ministry is guiding regions to strengthen their information monitoring and early warning mechanisms, steering pig breeders to pare their rearing capacity.

Editor: Emmi Laine