First of all, the number of live pigs determines the total supply of pork, which is also the most critical factor affecting the price of pork. In China, pig farmers and investors have all heard of the word "pig cycle". "Pig cycle" reflects the cycle of changes in pig breeding conditions. According to the trend of recent rounds of "pig cycle", the duration of a complete round of "pig cycle" is often close to 4 years. In the same cycle, pig farmers often increase the pig production capacity at the peak of pork price, and when the corresponding pigs are released, the new number of pigs will reduce the pork price. Similarly, during the period of low pork prices, many farmers will reduce the production capacity of live pigs, and the supply of pork on the market will gradually decrease. Before the production capacity of new pigs is restored, pork prices will once again enter the rising stage. Therefore, the change in the number of live pigs is the main driver of domestic pork prices.
Secondly, the market demand determines the total demand of domestic pork, which will "restrain the rise and fall of pork prices" to a certain extent. China is a big consumer of pork, but the quantity of pork purchased by ordinary people is often inversely proportional to the price of meat. When pork prices soar, many people will buy less pork and eat less pork. When pork prices fall back to a cheaper stage, many low-and middle-income groups will take the opportunity to "eat more meat". Similarly, official institutions such as the domestic reserve bureau will also buy pork during the low price of pork, and release reserve meat to the market during the peak price of pork to stabilize the price of meat. Therefore, the quantity of market demand will also affect the fluctuation of pork prices.
Thirdly, the expected change of commodity futures reflects the expectation of the subsequent price trend of pork, and it will gradually become the "wind vane" of pork price trend. Before the introduction of pig futures in domestic commodity exchanges, the price change of pork was often only related to the supply and demand relationship between farmers and the market. After the introduction of pig futures varieties, many producers will use this futures variety for hedging operations to offset the risk of price fluctuations in the production process of pigs. Therefore, the price fluctuation of live pig futures will more keenly reflect the market's views on the subsequent pork price trend. This trend will continue to increase with the increase in the number of futures participants.
To sum up, the fluctuation of pork price is a normal economic phenomenon, and the influencing factors of domestic pork price changes are closely related to the above points.