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

Securities Times reporter Zhao Liqing

On April 3, the domestic hog futures benchmark contract price fell to 9,370 yuan per ton, hitting a new low since its listing. Meanwhile, in the spot market, the average hog market-out 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 “most difficult year” among the recent rounds of hog cycles. Against this backdrop, since 2026, the country has carried out two batches of central government reserve purchases of hogs to prop up hog prices.

Interviews from multiple parties conducted by Securities Times reporter found that hog prices have already fallen below the industry’s average cost line, and the breeding end has generally fallen into a predicament of losses. Unlike in the past, during this round of hog price decline, the industry’s capacity de-stocking progress has been relatively slow, and it will still take time for the market to clear.

Most analysts believe that before capacity is truly and substantially reduced, hog prices in the short term will most likely remain in a low-range, range-bound pattern. Facing the trough of the cycle, current breeding enterprises are “getting through the winter” by reducing costs and improving efficiency, optimizing their financial structure, and expanding overseas markets, in order to enhance their ability to withstand risks.

Hog prices hit a low in more than ten years

On March 31, the domestic hog market-out average price fell to 9.43 yuan per kilogram. This price is already “cut in half” compared with August 2022, and it is down more than 76% compared with the historical high of 40.38 yuan per kilogram recorded in November 2019—marking the lowest level in nearly fourteen years.

“At this price, you can’t really talk about profits from hog raising. If you can manage to lose less, that’s already good.” Liu Liang, a hog farmer in Zhumadian, Henan, who has about 300 sows, said that just in the just-ended March, the sales price of 6-kilogram piglets fell from more than 300 yuan to below 250 yuan. There is no profit to be made from selling piglets anymore. If he continues fattening the pigs into market hogs, he will probably fall further into losses, so he can only sell them as soon as possible.

Also in Zhumadian, Wang Kai, another hog farmer, purchased a batch of piglets in late March to fill his pigsties 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 current average cost for piglets is extremely low.

“With prices falling like this, it shouldn’t drop further again. Based on today’s piglet and feed costs, by August this year—when the pigs reach market hog size—the cost per jin will be around 5.1 yuan. If hog prices can recover slightly over the next few months, a pig could also make a profit of a hundred or so yuan.” He said this in a hopeful tone.

In March 2026, the loss situation in the hog breeding industry has worsened further.

According to Shanghai Ganglian data, in March the nationwide average hog price was 11.64 yuan per kilogram, down another 1.69 yuan per kilogram from February. In that month, the average loss for hogs bred and raised by the enterprises themselves reached 257.53 yuan per head, expanding by 207.38 yuan month-on-month; losses averaged 157.95 yuan per head for purchased piglets, expanding by 156.96 yuan month-on-month.

“In 2026, the industry is indeed entering the most difficult year among the last several cycles.” Recently, at a performance briefing meeting for a listed company in the hog breeding industry, the company’s executive expressed this kind of sentiment.

In interviews, multiple people from listed hog breeding companies told Securities Times reporter that with current market hog prices at more than four yuan per jin, the entire industry has already entered a loss-making state.

Small retail investors’ perception of how industry cycle fluctuations affect them is even more direct.

“Over the past three years, the hog industry has actually been in a down cycle all along. In 2023 and 2024, it was only a phase of profitability, but by 2025 it began to gradually fall into losses. The length of the weak market is clearly longer than the usual rhythm of one cycle lasting three or four years in the past. Many smallholders couldn’t hold on and exited voluntarily.” Liu Yuzhen said. After the African swine fever outbreak in 2018 dealt a blow to the sector, the proportion of smallholders raising hogs themselves was greatly reduced. As for those who still intended to raise hogs, most shifted to secondary fattening instead. In earlier years, there were about four or five dozen township and village households raising hogs themselves where Liu Yuzhen lived, and there were more than ten households at scale. But now, there are only a handful of people still raising hogs in the town; among them, only Liu Yuzhen remains who continues large-scale self-breeding and self-raising.

Capacity de-stocking still takes time

Given the persistently weak market for hog prices, in recent years the government has gradually optimized hog production capacity regulation mechanisms and guided practitioners to arrange production plans reasonably. Especially since 2025, relevant authorities have continued systematic regulation from reducing breeding capacity, lowering body weight, and limiting secondary fattening, and the results of capacity de-stocking have begun to show.

Earlier data from Muyuan Co., Ltd. showed that in January–February 2025, the company’s highest number of breeding sows on hand was 3.62 million head, and by January 2026, it had been reduced to 3.13 million head. A cumulative reduction of nearly 500,000 head.

A related executive from New Hope Group also said that to respond to the national policy call, the company started gradually reducing the number of breeding sows on hand from the third quarter of last year, reducing from 760,000 head in mid-2025 to 740,000 head in early January 2026.

However, the main reason hog prices have continued to fall remains the imbalance between supply and demand on both ends of the industry.

A person from a listed company said that in recent years African swine fever has forced enterprises to improve their management level and biosecurity system. The overall level of livestock breeding in the industry has improved significantly, data such as sow PSY (the number of weaned piglets provided per sow per year) have increased, and the average quantity of veterinary drugs used per head has also shown a downward trend compared with before. These all reflect improvements in pigsty environment and health management capabilities. In addition, hog breeding has the characteristics of continuity and long cycles, so policy regulation cannot take effect immediately, and capacity de-stocking still requires time.

“From 2024 to the third quarter of 2025, the hog breeding industry as a whole was in the profitable range, and large-scale main entities continued the inertia of capacity expansion. Although by the end of 2025 the national number of breeding sows on hand dropped to 39.61 million head, down nearly 10 million head from the beginning of the year, due to a combination of factors such as improved production efficiency of breeding sows, relatively high market-out weights, and secondary fattening, the pressure on hog supply remains quite high.” The above person from a listed company said.

When discussing its judgment on the hog price trend in 2026, the above executive from New Hope said that in the first half of the year, hog prices may generally be in a floor-building stage. It is expected that as the effects of prior capacity regulation gradually take hold, together with pork consumption moving out of the off-season, the relationship between supply and demand in the second half of the year is likely to improve.

A relevant executive of Wens Foodstuff, Group Co., Ltd. also said in an interview with Securities Times reporter that hog prices have continued to weaken since October 2025 and are currently in the bottom range. “It’s difficult to clearly determine when the price will reverse. At present, the price has already been at a historical low, and the possibility of continuing downward is small.” He said.

The person interviewed 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 de-stock, indicating that in the first half of 2026 hog market-out volumes will still maintain ample supply. Coupled with the impact of the consumption off-season after the Spring Festival, hog prices are likely to reach the annual low point. Under the combined effect of the government’s comprehensive regulation of hog capacity and the market’s spontaneous adjustments, the effects of capacity de-stocking are expected to become gradually evident from the end of the second quarter. As the supply-demand relationship improves, hog prices are expected to stop falling and stabilize, and with further support from the peak consumption season in the second half of the year, hog prices may rise moderately. Therefore, Muyuan Co., Ltd. expects that for the whole of 2026, hog prices will show a pattern of low first and then higher.

“Compared with the down phases of previous hog cycles, this decline cycle is longer and the strength of any rebound is weaker. The bottoming with a prolonged range-bound grind is even more pronounced.” said Sun Zilei, an analyst at Shanghai Ganglian. He said that taking indicators such as the number of breeding sows on hand, hog market-out volumes, and the duration of ongoing industry losses into account, the current hog market has entered the bottom range of the hog cycle, but supply pressure has not been fully relieved, and capacity de-stocking is not yet sufficient. In the short term, hog prices still have the possibility of probing further downward. The true bottom of the cycle can only be confirmed after breeding sow numbers are further de-stocked and the market-out pressure is clearly eased.

Improve internal operations and push overseas markets

Faced with a weak market, listed hog breeding companies are taking multiple measures to enhance their ability to get through the current cycle trough.

“In the current market environment, the company will adopt a more prudent operating strategy, with cash flow safety as the top priority, ensuring that the company has sufficient financial resilience amid fluctuations.” The above person interviewed from Muyuan Co., Ltd. said the company will continuously optimize its debt structure, make rational use of various financing tools to reduce financing costs, keep financial indicators at safer and healthier levels, and improve the company’s overall operating quality.

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

The above person interviewed from Muyuan 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. Over the next 3 to 5 years, the company hopes to find in more countries and regions the growth points where it can create value for local hog breeding industries. By exporting solutions, it will concretely address local industry pain points.

Wens Foodstuff, Group Co., Ltd. has also recently disclosed that it will treat “going overseas” as an important strategic direction and set up a dedicated exploration team to advance related work. Leveraging overseas experience and channel resources accumulated over many years across businesses such as animal health protection, agricultural and livestock equipment, and environmental protection, the company will prioritize pushing the broiler chicken business overseas. Its first stop is Vietnam, which is adjacent to China. Its initial target is to capture about 10% of Vietnam’s yellow-feather broiler chicken market. Going forward, depending on overseas development, it will gradually expand into other businesses such as hogs and ducks, and deeply tap the growth potential of international markets.

“Currently, overseas livestock markets have a lot of room for development. In recent years, domestic companies have already accumulated strong competitive advantages, and their cost-control capabilities at the production end have been strengthened. They have opportunities and capabilities for technology export.” When discussing its development plan, the above executive of Wens Foodstuff 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. With confidence and capability, it aims to successfully get through this round of sluggish cycle and 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, and it has completed fixed-asset production capacity planning. In the future, the company will dynamically adjust its breeding layout of biological assets based on 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, and the company will tilt biological asset deployment toward those regions to increase the proportion of market-outs. While keeping the free-range model basically stable, in the future the company will gradually increase the number and proportion of self-fattened market-outs. By strictly focusing on production management, it will continue to lower hog-raising costs.