The most difficult "pig cycle" is approaching; breeding companies are taking multiple measures to "endure the winter."

Cailiu Media Finance Picture Library / Photo Provision

The Securities Times reporter Zhao Liqing

On April 3, the price of China’s live hog futures main contract fell to 9,370 yuan per ton, hitting a new low since its listing. Meanwhile, in the spot market, the average live hog selling price fell to below 10 yuan per kilogram, already at a low point in more than ten years. In the view of industry insiders, 2026 will be the “toughest year” among the recent rounds of hog cycles. Against this backdrop, since 2026, the government has conducted two batches of central hog reserve purchases to support hog prices.

Multiple interviews conducted by The Securities Times reporter found that hog prices have already fallen below the industry’s average cost line, and the breeding side is generally trapped in losses. Unlike previous rounds, during this downturn in hog prices, the industry’s capacity reduction has been relatively slow, and it will still take time for the market to clear.

Most analysts believe that before capacity is substantively reduced, hog prices in the short term are likely to remain in a low-range, sideways-to-volatile trading pattern. Faced with a trough in the cycle, current breeding companies are “getting through the winter” by cutting costs and improving efficiency, optimizing their financial structures, and expanding into overseas markets, thereby enhancing their ability to withstand risks.

Hog prices hit a low in more than ten years

On March 31, the domestic average hog selling price fell to 9.43 yuan per kilogram. This price is a “cut in half” compared with August 2022, and it is even down more than 76% from the all-time high of 40.38 yuan per kilogram in November 2019—an all-time low in the past fourteen years.

“At this price, you can’t really say it’s profitable to raise pigs. If you can manage to lose less, that’s already good.” Liu Liang, a pig breeder in Zhumadian, Henan, who has a sow capacity of about 300 head, said that in just the just-past March, the price of 6-kilogram piglets dropped from more than 300 yuan to below 250 yuan. Piglet sales are now no longer profitable. If he continues to raise them into market hogs, he will likely fall further into losses, so he can only sell them quickly.

In Zhumadian as well, Wang Kai, another breeder, had just purchased a batch of piglets in late March to fill pig pens that had already been cleared before Chinese New Year. In his view, compared with last year’s price of over 500 yuan per head, the average piglet cost is now extremely low.

“With prices falling to this level, they probably won’t drop further. Based on piglet and feed costs at present, by August this year when they grow into market hogs, the cost per jin should be around 5.1 yuan. If hog prices can recover slightly in the next few months, each pig could still make a profit of over a hundred yuan.” He mused.

In March 2026, however, losses in the hog breeding industry continued to worsen.

According to Shanghai Steelhome data, in March the national average hog price was 11.64 yuan per kilogram, down another 1.69 yuan per kilogram from February. In that month, losses per head for hogs raised by self-breeding and self-raising reached 257.53 yuan, widening by 207.38 yuan month-on-month; losses per head for purchased piglets reached 157.95 yuan, widening by 156.96 yuan month-on-month.

“In 2026, the industry truly has entered the toughest year among the recent few cycles.” Recently, at a performance briefing meeting for a listed company in the hog breeding industry, a company executive made such remarks.

In interviews, multiple executives from listed companies in the hog breeding industry told The Securities Times reporter that with hog prices in the market currently at more than four yuan per jin, the entire industry has already fallen into a loss-making state.

For small retail breeders, the impact of industry cycle fluctuations is even more directly felt.

“Over the past three years, the hog industry has actually been in a downward cycle. 2023 and 2024 were only periods of profit; by 2025, it gradually started to fall into losses. The length of the sluggish行情 has clearly exceeded the usual rhythm of one cycle every three or four years in the past. Many small retail breeders couldn’t hold on and voluntarily exited.” Liu Yuzhen said. “After the shock of the African swine fever outbreak in 2018, the proportion of small retail breeders doing self-breeding and self-raising dropped significantly. And among those who still had the willingness to raise pigs, most shifted to doing secondary fattening. Years ago, in the village and township where Liu Yuzhen worked, there were four or five dozen self-breeding and self-raising households. There were more than ten scaled households as well. But now there are only a handful of people raising pigs in the town, and the ones still sticking to large-scale self-breeding and self-raising are down to just Liu Yuzhen’s household.”

Capacity reduction still takes time

Facing a market environment of sustained weak hog prices, in recent years the country has gradually optimized hog capacity regulation mechanisms, guiding practitioners to arrange production plans reasonably. Especially since 2025, relevant departments have carried out systematic controls from multiple angles—reducing breeding capacity, reducing body weight, limiting secondary fattening, and so on—so that the results of capacity reduction have begun to show.

Previously, Muyuan Co., Ltd. provided data showing that in January to February 2025, the company’s highest number of sows in inventory was 3.62 million head. By January 2026, the number had been cut to 3.13 million head. Cumulatively, it has been reduced by nearly 500k head.

The relevant person in charge of New Hope also said that in response to national policy calls, the company began gradually reducing the number of sows in inventory from the third quarter of last year, lowering it from 760k head at mid-2025 to 740k head in early January 2026.

However, the main reason hog prices continue to fall is still the imbalance between supply and demand on both sides of the industry.

One listed company executive said that in recent years African swine fever has forced companies to improve their management level and biosecurity systems. The industry’s overall breeding standard has improved significantly. Data such as sows’ PSY (the number of weaned piglets provided per sow per year) has improved, and the per-head usage of veterinary drugs has also shown a downward trend compared with earlier periods. All of these reflect improvements in the piggery environment and health management capability. In addition, hog breeding has the characteristics of continuity and long cycles, so policy regulation cannot take effect immediately, and capacity reduction still requires time.

“From 2024 to the third quarter of 2025, the hog breeding industry as a whole was in the profit range, and the scaled entities continued the inertia of capacity expansion. Although the national number of sows in inventory fell to 39.61 million head at the end of 2025, down nearly 500k head from the beginning of the year, due to the combined effects of improved sow production efficiency, higher-than-average market weight at sale, and secondary fattening, the pressure on hog supply remains quite high.” The aforementioned listed company executive said.

Regarding his judgment on the trend of hog prices in 2026, the above executive from New Hope believed that in the first half of 2026, hog prices may be generally in a bottoming-out phase. It is expected that as the effects of prior capacity regulation gradually become evident, and with pork consumption moving out of the off-season, the relationship between supply and demand in the second half is likely to improve.

A relevant executive from Wens Group (Wen’s Co.) also said in an interview with The Securities Times reporter that hog prices have continued to weaken since October 2025 and are now in the bottom range. “It’s difficult to clearly determine the timing of a price reversal. At present, prices are already at a historical low level, so the possibility of continued downward movement is relatively small.” he said.

An interviewee from Muyuan Co., Ltd. believed that according to monitoring data from the National Bureau of Statistics and the Ministry of Agriculture and Rural Affairs, since the second half of 2025 the industry’s capacity has begun to be reduced, indicating that in the first half of 2026 hog market supply at sales will remain sufficient. Combined with the impact of the off-season in consumption after the Spring Festival, hog prices will likely probe to the annual low point. Under the joint effect of comprehensive government regulation of hog capacity and market-driven adjustments, the effect of capacity reduction is expected to gradually become evident starting from the end of the second quarter. As the supply-demand relationship improves step by step, hog prices are expected to stop falling and stabilize. With further support from the peak consumption season in the second half, hog prices may rise moderately. Therefore, hog prices throughout 2026 are expected to show a pattern of low first and then higher.

“Compared with previous downward stages of hog cycles, this decline cycle is longer and the rebound strength is weaker, and the characteristics of a bottoming-out and grinding phase are more obvious.” Shanghai Steelhome analyst Sun Zhilei said. “Taking indicators such as the number of sows in inventory, the volume of hogs sold (to market), and the length of time the industry has continued to incur losses, into account, the hog market has already entered the bottom range of the hog cycle. However, supply pressure has not yet been fully relieved, and capacity reduction is still insufficient. In the short term, there is still a possibility that hog prices will continue to probe lower. The true bottom of the cycle can only be confirmed after sows in inventory are further reduced and sale (market) pressure is clearly alleviated.”

Optimize internal operations and step up efforts in overseas markets

Facing a weak market environment, listed hog breeding companies are taking multiple measures to enhance their ability to get through the low point of the cycle.

“In the current market environment, the company will adopt a more prudent operating strategy, with cash-flow safety as the top priority, ensuring the company has sufficient financial resilience amid volatile conditions.” The above interviewee from Muyuan Co., Ltd. said. “We will continuously optimize our debt structure, reasonably use various financing tools to reduce financing costs, keep financial metrics at safer and healthier levels, and improve the company’s overall operating quality.”

After Muyuan Co., Ltd. listed on the Hong Kong Stock Exchange in February 2026, it will also leverage global capital to empower industrial development.

The above interviewee from Muyuan Co., Ltd. said that this year, the company will continue to steadily advance the existing cooperative projects in Vietnam, while also actively exploring development opportunities in other countries and strengthening the construction of overseas business teams. Over the next 3 to 5 years, the company hopes that in more countries and regions, it can find key areas where it can create value for local hog breeding industries. By exporting solutions, it will directly and concretely address pain points in the local industry.

Wens Group also recently disclosed that it will treat “going overseas” as an important strategic direction and will set up a dedicated exploration team to advance related work. The company will rely on years of overseas experience and channel resources accumulated in businesses such as animal health (animal protection), agricultural and livestock equipment, and environmental protection. It will prioritize promoting the overseas expansion of its broiler chicken business, with its first stop set as Vietnam, which is adjacent to China. The initial goal is to capture around 10% of Vietnam’s yellow-feather broiler chicken market. In the next stages, depending on developments in overseas operations, it will gradually expand into other businesses such as pig and duck industries, deeply tapping the growth potential of international markets.

“Currently, overseas livestock markets have substantial room for development. In recent years, domestic companies have accumulated relatively strong competitive advantages. Their cost-control capability on the production side has strengthened, and they have opportunities and capability to export technology.” When talking about its development plan, the above executive from Wens Group said. In 2026, the company will continue to focus on internal production and operations, continuously improve production efficiency, and strengthen internal management and operation optimization. It is confident and capable of successfully crossing this round of a sluggish cycle to achieve new development.

The above executive from New Hope also mentioned that currently the company’s breeding farms cover 116 cities across 25 provinces nationwide, completing the fixed-asset capacity layout. In the future, the company will dynamically adjust the layout for biological asset breeding based on factors such as production costs and disease prevention and control in each region—for example, the breeding costs in the western and South China regions are relatively lower, and the company’s biological asset placement tends toward those areas to increase the proportion of hogs sold. With the free-range farming model remaining basically stable, in the future the company will gradually increase the quantity and share of self-raised fattening hogs for market. By rigorously focusing on production management, it will continuously lower the cost of raising pigs.