Pig prices hit a decade-low! The most difficult "pig cycle" is approaching, and breeding companies are taking multiple measures to "weather the winter."

On April 3, the domestic hog futures’ main contract price fell to 9,370 yuan per ton, hitting a new low since the contract was listed. Meanwhile, in the spot market, the average hog market price for slaughter/ready-to-market hogs fell to below 10 yuan per kilogram, already at the lowest level in more than ten years.

In the eyes of industry insiders, 2026 will be the “most difficult year” among the past several pig cycles. Against this backdrop, since 2026, the central government has carried out two rounds of central hog reserve buyback programs to stabilize hog prices.

Interviews conducted by a Securities Times reporter from multiple channels found that hog prices have already fallen below the industry’s average cost line, and the breeding side is generally stuck in loss-making conditions. Unlike previous rounds, during this downward move in hog prices, the industry’s capacity de-leveraging pace has been relatively slow, and the market still needs time to clear.

Most analysts believe that before capacity is actually and substantially reduced, hog prices in the short term will most likely remain in a low-range sideways-moving pattern. Faced with the trough of the cycle, breeding companies are “getting through the winter” by cutting costs and increasing efficiency, optimizing their financial structure, and expanding into overseas markets, in order to enhance their ability to withstand risks.

Hog prices hit a low in more than a decade

On March 31, the domestic average price for slaughter/ready-to-market hogs 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% versus the historical high of 40.38 yuan per kilogram recorded in November 2019—an all-time low in the past 14 years.

“At these prices, you can’t say hog farming is profitable. If we can manage to lose less, that’s already good enough.” Liu Liang, a hog farmer in Zhumadian, Henan, who has about 300 head of sow capacity, said that in the just-ended March, the selling price of 6-kilogram piglets fell from more than 300 yuan to below 250 yuan, and piglet sales no longer have any profit. If he continues raising them into market-ready hogs, he would likely fall even deeper into losses, so he can only sell them as soon as possible.

Also in Zhumadian, farmer Wang Kai purchased a batch of piglets in late March to fill hog pens that had already been cleared before the Spring Festival. In his view, compared with the price of over 500 yuan per head last year, the average piglet price cost is extremely low now.

“With prices falling like this, they probably won’t drop further. Based on current piglet and feed costs, by August this year when they grow into market-ready hogs, the cost per jin is around 5.1 yuan. If hog prices recover slightly over the next few months, a single hog could also make a profit of a hundred or so yuan.” He mused.

In March 2026, the loss situation in the hog breeding industry was further worsening.

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 hogs bred and raised on the farm reached 257.53 yuan per head, expanding by 207.38 yuan quarter-on-quarter; average losses for purchased piglets reached 157.95 yuan per head, expanding by 156.96 yuan quarter-on-quarter.

“In 2026, the industry really has entered the most difficult year among the past few cycles.” At a recent earnings briefing for a listed company in the hog breeding industry, the company’s负责人 made this remark.

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

Retailers’ perception of how industry cycle fluctuations affect them is even more direct.

“Over the past three years, the hog industry has actually remained in a downward cycle. In 2023 and 2024, it was only a phase of profit, but by 2025 it gradually started to fall into losses. The duration of the sluggish market has clearly exceeded the usual three or four years per cycle in the past. Many small farmers couldn’t hold on and proactively exited.” Liu Yuzhen said. Since the African swine fever outbreak shock in 2018, the proportion of backyard breeding by small farmers has dropped sharply. As for people willing to raise pigs, most have shifted to secondary fattening. In earlier years, there were four to five dozen small farmers in the village and towns where Liu Yuzhen was, doing self-breeding and self-raising, and there were more than ten with scale. But now there are hardly any pig farmers left in the town, and only he is still sticking to large-scale self-breeding and self-raising.

Capacity reduction still takes time

Faced with persistently weak market conditions for hog prices, in recent years the government has gradually optimized the hog production capacity regulation mechanism, guiding practitioners to arrange production plans reasonably. Especially since 2025, relevant departments have continued systematic regulation from multiple angles, such as reducing energy for breeding, reducing body weight, limiting secondary fattening, and so on, and initial results from capacity reduction have begun to show.

Muyuan Co., Ltd. previously showed that from January to February 2025, the company’s highest number of breeding sows in stock was 3.62 million head, but by January 2026, the number of breeding sows in stock had been reduced to 3.13 million head—an accumulated reduction of nearly 500k head.

The relevant负责人 from New Hope also said that to respond to the national policy call, the company began gradually reducing the stock of breeding sows starting from the third quarter of last year, from 760k head in mid-2025 down to 740k head at the beginning of January 2026.

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

An executive at a listed company said that in recent years, African swine fever has forced companies to improve their management level and biosecurity systems, and the overall level of breeding in the industry has improved significantly. Data such as PSY (the number of weaned piglets provided per sow per year) for sows have increased, and the average amount of veterinary drugs used per head has also shown a downward trend compared with earlier periods. These developments all reflect improvements in pigsty environment and health management capacity. In addition, hog breeding has the characteristics of continuity and a long cycle, so policy regulation cannot take immediate effect, 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-making range, and the main scale players continued the inertia of capacity expansion. Although the national number of breeding sows in stock fell to 39.61 million head at the end of 2025, down nearly 1 million head versus the beginning of the year, due to the combined impact of improved production efficiency of breeding sows, slightly higher market weight at sale, and secondary fattening and other factors, current supply pressure for hogs remains high.” The above executive of the listed company said.

Asked about the outlook for hog price trends in 2026, the above executive at New Hope (000876) believed that in the first half of the year, hog prices will probably remain largely in a price-finding/trough-building stage. It is expected that as the effects of earlier capacity regulation gradually become visible, and as pork consumption comes out of the off-season, supply-demand relations in the second half could improve.

The relevant executive at Wen’s Co., Ltd. (Wei? / Wens?) also said in an interview with the Securities Times reporter that hog prices have continued to weaken since October 2025 and are currently in the bottom price range. “It’s difficult to clearly determine when a price reversal will happen. Given that current prices are already at historical lows, the likelihood of sustained further downside is small.” he said.

Meanwhile, a person interviewed at 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, industry capacity has begun to be reduced, indicating that in the first half of 2026 hogs for market will still have sufficient supply. Combined with the impact of the consumption off-season after the Spring Festival, hog prices will most likely probe toward the annual low point. Under the joint effect of the government’s comprehensive regulation of hog production capacity and market-based self-adjustment, the effects of capacity de-leveraging are expected to gradually show from the end of the second quarter onward. As supply-demand relations gradually improve, hog prices are expected to stop falling and stabilize. With further support from the consumption peak season in the second half, hog prices may rise modestly. Therefore, for all of 2026, hog prices are expected to show a trend of lower first and then higher.

“Compared with previous downward phases in hog cycles, this decline cycle is longer and the rebound strength is weaker. The characteristics of a bottoming process with price movement are even more obvious.” Sun Zilei, an analyst at Shanghai Ganglian (300226), said frankly that based on indicators such as breeding sow stock, the volume of hogs reaching market, and the length of time the industry has been continuously loss-making, the hog market has entered the bottom range of the hog cycle. However, supply pressure has not yet been fully relieved, and capacity de-leveraging is still not sufficient. In the short term, there is still a possibility that hog prices could continue to probe lower. As for the real bottom of the cycle, it still needs to wait until breeding sow numbers are further reduced and selling pressure is clearly eased before it can be confirmed.

Optimize internal operations and push overseas markets

Facing a weak market environment, listed companies in the hog breeding industry are taking multiple measures to improve 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 that the company has sufficient financial resilience amid volatile market conditions.” the above interviewee from Muyuan Co., Ltd. (002714) said. The company will continuously optimize its debt structure, make rational use of various financing tools to lower 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 interviewee from Muyuan Co., Ltd. said that this year the company will continue to advance steadily the 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 that in more countries and regions, it will find areas where it can create value for local hog breeding industries. By exporting solutions, it will practically address the pain points in local industries.

Wen’s Co., Ltd. has also recently disclosed that it will treat “going overseas” as an important strategic direction and will set up a dedicated exploration team to advance the relevant work. The company will rely on years of overseas experience and channel resources accumulated in businesses such as animal health, agricultural and livestock equipment, and environmental protection. It will prioritize promoting the export of its broiler chicken business, with its first stop set as Vietnam, which is adjacent to China. The initial target is to capture about 10% of Vietnam’s yellow-feather broiler market share. In the future, depending on overseas development, it will gradually expand into other businesses such as pig and duck industries, deeply tapping the potential for international market development.

“Currently, overseas breeding markets have substantial room for development. In recent years, domestic enterprises have accumulated relatively strong competitive advantages, and their cost-control capabilities on the production side have strengthened as well. They also have opportunities and the ability to export technology.” When discussing development plans, the above负责人 at Wen’s Co., Ltd. (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. With confidence and capability, it aims to smoothly get through this round of sluggish cycle and achieve new development.

The above负责人 at New Hope mentioned that currently the company’s breeding farms cover 116 cities across 25 provinces nationwide, and it has completed fixed-asset capacity layout. In the future, the company will dynamically adjust the layout of breeding biological assets 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 low, so the company’s placement inclination for breeding biological assets will be toward those areas to improve the proportion of hogs sold. While keeping the grazing mode basically stable, in the future the company will gradually increase the quantity and share of self-bred fattening hogs upon sale. By rigorously抓抓 on production management, it will continue to lower hog-raising costs.

Proofread by: Ran Yanqing

Editor-in-charge: Zhang Xiaobo

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