Pig prices hit a decade-low! The most difficult "pig cycle" is approaching.

On April 3, the domestic hog futures’ front-month contract price in China fell to 9,370 yuan per ton, hitting a new low since the listing. Meanwhile, in the spot market, the average ex-farm pig selling price dropped to below 10 yuan per kilogram, already the lowest point in more than a decade.

In the view of industry insiders, 2026 will be the “most difficult year” among recent rounds of the hog cycle. Against this backdrop, since 2026, the government has carried out two batches of central reserve procurement measures for hogs to support hog prices.

Interviews conducted by Securities Times reporters from multiple angles learned that current hog prices have fallen below the industry’s average cost line, and the breeding sector is generally trapped in losses. Unlike in previous cycles, during the current downturn in hog prices, the industry’s capacity reduction has progressed relatively slowly, and the market still needs time to clear.

Most analysts believe that before capacity is substantively reduced, hog prices are likely to remain in a low-range sideways trend in the short term. Facing the cyclical trough, current breeding enterprises are “getting through the winter” by cutting costs and improving efficiency, optimizing their financial structure, expanding overseas markets, and other measures to enhance their risk resistance.

Hog prices hit the lowest level in more than ten years

On March 31, the domestic average ex-farm hog selling price fell to 9.43 yuan per kilogram. This price is already down by “half” compared with August 2022, and it is down more than 76% from the historical high of 40.38 yuan per kilogram recorded in November 2019, making it the lowest in nearly 14 years.

“At this price, you can’t really talk about profits from hog farming. If you can just manage to lose less, that’s already good.” Liu Liang, a hog farmer in Zhumadian, Henan, who has about 300 sows’ capacity, said that in the just-concluded March, the selling price of 6-kilogram piglets fell from over 300 yuan to below 250 yuan. Piglet sales have no profit left. If he continues raising them into standard-market hogs, he would likely fall further into losses, so he can only sell them as soon as possible.

Also in Zhumadian, a hog farmer named Wang Kai purchased a batch of piglets in late March to fill the pig sheds that had already been cleared before the Spring Festival. 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 like this, it probably won’t go down further. Based on the current piglet and feed costs, by August this year when they grow into standard hogs for ex-farm sale, the cost per jin will be around 5.1 yuan. If hog prices can recover slightly over the next few months, one hog could still generate a profit of a hundred or so yuan.” He pictured it that way.

In March 2026, however, the loss situation in the hog farming industry has continued to worsen.

According to data from Shanghai Ganglian, the national average hog price in March was 11.64 yuan per kilogram, down another 1.69 yuan per kilogram from February. In that month, average losses for pigs raised from breeding on-site reached 257.53 yuan per head, expanding 207.38 yuan month-on-month. Average losses for purchased piglets reached 157.95 yuan per head, expanding 156.96 yuan month-on-month.

“In 2026, the industry has indeed entered the most difficult year among the past few cycles.” At a recent performance briefing for a listed company in the hog breeding industry, a company executive made such a remark.

In interviews, multiple executives from listed hog breeding companies told Securities Times that with current market hog prices at more than four yuan per jin, the entire industry has already fallen into a loss situation.

Retail participants’ perception of the industry cycle’s volatility is even more direct.

“Over the past three years, the hog industry has actually been in a declining cycle all along. 2023 and 2024 were only periods of profit, and starting in 2025 it gradually began to fall into losses. The low-price conditions have lasted much longer than the usual rhythm of one cycle in the past three or four years. Many retail farmers couldn’t hold on and exited voluntarily.” Liu Yuzhen said. After the outbreak of the African swine fever in 2018 brought a shock, the proportion of retail farmers engaging in breeding themselves dropped significantly. As for those who still had the willingness to raise pigs, most shifted to secondary fattening. Earlier, there were four to five dozen households in Liu Yuzhen’s township village doing self-breeding and self-raising, and more than ten households that were on a larger scale. But now there are only a handful of people raising pigs in the town; among those still persisting with large-scale self-breeding and self-raising, only Liu Yuzhen remains.

Capacity reduction still takes time

Facing a market environment of persistently weak hog prices, in recent years China has gradually optimized its mechanisms for hog capacity regulation, guiding practitioners to arrange production plans reasonably. Especially since 2025, relevant departments have continued systematic regulation from multiple angles such as reducing breeding capacity, reducing body weight, and limiting secondary breeding (re-fattening), and the initial results of capacity reduction have begun to show.

Mu Yuan Co., Ltd. previously showed that from January to February 2025, the company’s highest number of breeding sows on hand was 3.62 million head, but by January 2026, the number had been reduced to 3.13 million head. The cumulative reduction was nearly 500k head.

A related executive at New Hope also said that in response to the national policy call, the company began gradually reducing the number of breeding sows from the third quarter of last year: from 760k head in mid-2025 down to 740k head in early January 2026.

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

An executive at a listed company said that in recent years African swine fever has forced companies to improve management levels and biosecurity systems, and the industry’s overall breeding level has improved significantly. Data such as sow PSY (the number of weaned piglets provided per sow per year) have increased, and the average medicine use per head of veterinary drugs has also shown a declining trend compared with earlier periods. All of this reflects improvements in pigsty environments and health management capabilities. In addition, hog breeding has the characteristics of continuity and a long cycle. Policy regulation cannot take immediate effect, so capacity reduction still requires time.

“From the third quarter of 2024 to 2025, the hog breeding industry as a whole was in a profitable range, and the scale entities continued the inertia of expanding capacity. Although by end-2025 the nationwide number of breeding sows fell to 39.61 million head, down nearly 1 million head from the start of the year, given the combined effects of improved production efficiency of breeding sows, higher-than-average market-out weights, and factors such as secondary fattening, the pressure on hog supply remains high.” The executive said.

When talking about its judgment on the hog price trend in 2026, the executive at New Hope (000876) above believed that in the first half of the year, hog prices may overall be in a bottoming-out stage. It is expected that as the effects of earlier capacity regulation gradually become visible, and with pork consumption moving out of the off-season, the market’s supply-demand relationship in the second half of the year may improve.

An executive related to Wens Foodstuff Group (WH Group) also told Securities Times reporters that hog prices have continued to weaken since October 2025 and are now in the bottom range. “It’s hard to determine the exact time of a price reversal. The current price is already at a historical low, so the possibility of continued downward movement is relatively small.” He said.

The people interviewed at Mu Yuan Co., Ltd. believed that, based on 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 started to be reduced, indicating that in the first half of 2026 hog marketings will still maintain ample supply. Combined with the impact of the off-season in consumption after the Spring Festival, hog prices are likely to dip to the lowest point of the year. Under the combined effect of the government’s comprehensive regulation of hog capacity and market-driven adjustment, the capacity reduction effect is expected to gradually become apparent starting from the end of the second quarter. As the supply-demand relationship gradually improves, hog prices are expected to stop falling and stabilize. Further driven by the consumption peak season in the second half, hog prices could rise moderately. Therefore, the hog price for the whole of 2026 is expected to show a pattern of low at first and then higher later.

“Compared with past down-cycle stages, this downturn cycle is longer and the rebound strength is weaker, making the bottoming-and-grinding characteristics more evident.” Sun Zilei, an analyst at Shanghai Ganglian (300226), said. Judging from indicators including the number of breeding sows, the volume of hog marketings, and the duration of continued losses in the industry, the current hog market has entered the bottom range of the hog cycle. However, supply pressure has not been fully relieved yet, and capacity reduction is still insufficient. In the short term, hog prices still have the possibility of continuing to probe lower. The truly confirmed cycle bottom requires waiting until the further reduction of breeding sows and the noticeable alleviation of marketing pressure.

Optimize internal operations and push overseas markets

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

“In the current market environment, the company will adopt a more prudent operating strategy, prioritizing cash flow safety as the top priority, ensuring the company has sufficient financial resilience amid market volatility.” the interviewed representative from Mu Yuan Co., Ltd. (002714) said. The company will continuously optimize its debt structure, make rational use of various financing tools to reduce financing costs, keep financial indicators at a safer and healthier level, and improve the company’s overall operating quality.

After listing on the Hong Kong Stock Exchange in February 2026, Mu Yuan Co., Ltd. will also leverage global capital to empower the industry’s development.

The above-mentioned representative from Mu Yuan Co., Ltd. said that this year the company will continue to steadily advance existing cooperation projects in Vietnam, while actively exploring development opportunities in other countries and strengthening the construction of overseas business teams. In the next 3 to 5 years, the company hopes to find, in more countries and regions, points of effort where it can create value for local hog breeding industries. By exporting solutions, it will genuinely and effectively address local industry pain points.

Recently, Wens Foodstuff Group (WH Group) has also disclosed that it will treat “going global” as an important strategic direction and will set up a dedicated exploration team to advance related work. Relying on years of overseas experience and channel resources accumulated in businesses such as animal health (biosecurity), agricultural and livestock equipment, and environmental protection, the company will prioritize exporting its broiler chicken business. Its first stop will be Vietnam, which is adjacent to China, with an initial target of capturing about 10% of Vietnam’s yellow-feather broiler chicken market share. Subsequently, based on overseas development, it will gradually expand into other businesses such as pig farming and duck farming, deeply tapping the development potential of the international market.

“Currently, overseas livestock markets still have significant room for development. In recent years, Chinese companies have built up relatively strong competitive advantages; their production-side cost control capabilities have been enhanced, and they have opportunities and the ability to export technology.” Regarding development plans, the above-mentioned executive from Wens Foodstuff Group (300498) said that in 2026 the company will continue to focus on internal production and operations, continuously improve production efficiency, and strengthen internal management and operational optimization. It has confidence and the capability to successfully get through this round of sluggish cycle and achieve new development.

The executive from New Hope above also mentioned that currently the company’s breeding facilities cover 116 cities across 25 provinces nationwide, completing the fixed-asset capacity layout. In the future, the company will dynamically adjust its biological asset breeding layout according to factors such as production costs and disease prevention and control in each region—for example, breeding costs are relatively lower in the western and South China regions, so the company’s biological asset allocation will tend toward those areas to improve the proportion of hogs sold ex-farm. While keeping the free-range/letting-out breeding model basically stable, the company will gradually increase the quantity and proportion of self-fattened and self-raised hogs for ex-farm sale. By vigorously focusing on production management, it will continue to reduce the cost of hog farming.

Proofread by: Ran Yanqing

(Editor in charge: Zhang Xiaobo)

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