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

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On April 3, the domestic live hog futures’ main contract price fell to 9,370 yuan per ton, hitting a fresh low since the listing, while in the spot market the average ex-farm hog selling price dropped to below 10 yuan per kilogram, already at a low point not seen in more than ten years. In the view of industry insiders, 2026 will be the “most difficult year” among the past several hog cycles. Against this backdrop, since 2026, the state has carried out two rounds of central government hog reserve purchases to serve as a price backstop.

Multiple interviews conducted by a Securities Times reporter found that current hog prices have already fallen below the industry’s average cost line, and the breeding side is widely facing losses. What is different from previous rounds is that during this downward phase of hog prices, the industry’s capacity reduction progress has been relatively slow, and it will take time for the market to clear.

Most analysts believe that before capacity is substantively reduced, hog prices are likely to remain in a low-range, sideways-to-volatile pattern in the short term. Faced with the cyclical trough, breeding companies are “getting through the winter” by reducing costs and improving efficiency, optimizing their financial structure, and expanding overseas markets, so as to enhance their ability to withstand risks.

Hog prices hit a low not seen 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 down “by half” compared with August 2022 and is also down more than 76% from the historical high of 40.38 yuan per kilogram recorded in November 2019, making it the lowest level in nearly fourteen years.

“At this price, there’s no point talking about profits from hog raising. If I can lose a little less, that’s already good.” Liu Liang, a hog farmer in Zhumadian, Henan, who has about 300 sows’ capacity, said that in the just-finished March, the selling price for 6-kilogram piglets dropped from more than 300 yuan to below 250 yuan. Piglet sales no longer have any profit. If he continues raising them into market hogs, he will likely fall into losses even further, so he can only sell them quickly.

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

“With prices falling like this, it probably won’t go down any further. Based on today’s piglet and feed costs, by August this year when they grow into market hogs, the cost per jin will be around 5.1 yuan. If in the next few months hog prices can recover slightly, a hog could also yield a profit of a hundred-plus yuan.” He said with optimism.

In March 2026, the loss situation in the hog breeding industry continued to worsen.

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

“2026 is indeed the most difficult year among the past several cycles for the industry.” Recently, at a performance briefing for a hog breeding listed company, the company’s负责人 made such a 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 entire industry has already fallen into a loss state.

Small 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 period of profitability; by 2025 it started to gradually sink into losses. The downturn has lasted clearly longer than the previous one-cycle rhythm of three or four years. Many small investors couldn’t hold on and exited voluntarily.” Liu Yuzhen said. Since the shock from the African swine fever outbreak in 2018, the proportion of small investors who breed and rear hogs themselves has fallen dramatically. As for people who still want to raise hogs, most have shifted to “second-stage fattening.” Earlier on, in the village and town where Liu Yuzhen worked, there were four to five dozen households doing self-breeding and self-rearing, and there were more than ten households that had scaled up. But now the number of hog raisers in the town is very small; the only one still坚持ing规模化 self-breeding and self-rearing is Liu Yuzhen’s family.

Capacity reduction still takes time

Facing the persistently weak market for hog prices, in recent years the government has gradually optimized hog capacity regulation and control mechanisms, guiding practitioners to arrange production plans reasonably. Especially since 2025, relevant departments have continued systematical control measures from reducing breeding capacity, lowering body weight, and limiting secondary fattening. Initial results of capacity reduction have begun to show.

Mu Yuan Shares previously showed that from January to February 2025, the company’s highest inventory of breeding sows was 3.62 million head, but by January 2026 it had been reduced to 3.13 million head. A cumulative reduction of nearly 500k head.

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

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

A listed company executive said that in recent years African swine fever has forced companies to improve management levels and biosecurity systems, and the industry’s overall breeding standard has improved significantly. Data such as sows’ PSY (the number of weaned piglets provided per sow per year) have improved, and the average amount of veterinary drugs used per head has also shown a downward trend compared with earlier periods. All these reflect improvements in pigsty environment and health management capability. In addition, hog breeding has the characteristics of continuity and a long cycle; 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 profitable range, and the scale-based main entities continued the inertia of capacity expansion. Although by the end of 2025 the national inventory of breeding sows had dropped to 39.61 million head, down nearly 1 million head from the beginning of the year, due to the combined effects of improved breeding efficiency of breeding sows, relatively high marketing weight, and secondary fattening, the pressure on current hog supply remains large.” the aforementioned listed company executive said.

Asked about judgments on the hog price trend in 2026, the aforementioned executive from New Hope believed that in the first half of the year hog prices may generally be in a bottoming-out stage. It is expected that as the effects of earlier capacity regulation gradually become visible, along with pork consumption moving out of the off-season, the relationship between supply and demand in the second half may improve.

The relevant executive of Wen’s Shares, in an interview with a Securities Times reporter, also said that hog prices have continued to weaken since October 2025 and are now in a bottom-range period. “It’s hard to determine clearly when a price reversal will occur. Given that the current price is already at a historical low, the possibility of continued downward movement is relatively small.” he said.

An interviewee at Mu Yuan Shares also believed that, according to monitoring data from the National Bureau of Statistics and the Ministry of Agriculture and Rural Affairs, the industry’s capacity started to be reduced from the second half of 2025, indicating that in the first half of 2026 the hogs marketed would still be supplied adequately. Combined with the impact of the consumption off-season after the Spring Festival, hog prices are likely to fall to the lowest point of the year. Under the combined effect of comprehensive government regulation of hog capacity and market-driven adjustments, the effect of capacity reduction is expected to gradually become more apparent from the end of the second quarter. As supply and demand relations improve, hog prices may stop falling and stabilize. With further support from the peak consumption season in the second half, hog prices may rise moderately. Therefore, for the full year 2026, hog prices are expected to show a trend of lower first and then higher.

“Compared with previous down phases in hog cycles, this down cycle is longer and the rebound strength is weaker, with bottom-trading and grinding-down characteristics more pronounced.” Shanghai Ganglian analyst Sun Zilei said. Judging from indicators including the inventory of breeding sows, the volume of hogs marketed, and the duration of ongoing industry losses, the current hog market has entered the bottom range of the hog cycle, but 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 could probe further downward. Whether it is truly at the cycle bottom still needs to wait until there is further reduction in breeding sows and the marketing pressure is clearly alleviated before it can be confirmed.

Optimize internal operations and push overseas markets

Facing a weak market, 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, prioritizing the safety of cash flow first, ensuring that the company maintains sufficient financial resilience in a volatile market.” the aforementioned interviewee at Mu Yuan Shares said. The company will continuously optimize its debt structure, make rational use of multiple 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 Shares will also use global capital to empower industrial development.

The aforementioned interviewee at Mu Yuan Shares 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 its overseas business team. In the next 3 to 5 years, the company hopes to find in more countries and regions key areas where it can create value for local hog breeding industries, and by exporting solutions, it will truly and effectively address pain points in the local industry.

Wen’s Shares has also recently disclosed that it will take “going overseas” as an important strategic direction and will set up a dedicated exploration team to推进 the relevant work. The company will rely on overseas experience and channel resources accumulated over many years in animal healthcare, agricultural and livestock equipment, and environmental protection businesses, and will prioritize pushing the broiler business overseas. The first stop is determined to be Vietnam, which is adjacent to China. The initial target is to capture about 10% of Vietnam’s yellow-feather broiler market. Subsequently, depending on overseas development, the company will gradually expand into other businesses such as the pig industry and duck industry, and deeply tap the potential for international market development.

“Currently, overseas livestock markets have substantial room for development. In recent years, domestic companies have already accumulated strong competitive advantages, and their cost-control capabilities on the production side have increased. They also have the opportunity and capability to export technology.” the aforementioned executive at Wen’s Shares said when discussing its development plan. In 2026, the company will continue focusing on internal production and operations, continuously improving production efficiency, and strengthening internal management and operational optimization. It is confident and capable of successfully getting through this round of sluggish cycle and achieving new development.

The aforementioned executive from New Hope also mentioned that currently the company’s breeding farms cover 116 cities across 25 provinces nationwide and have completed fixed-asset capacity layout. In the future, the company will dynamically adjust the layout for biogenic assets breeding—based on factors such as production costs and disease prevention in different regions—for example, in the western and South China regions, breeding costs are relatively lower, so the company’s biogenic asset deployment tends to favor these regions to improve the proportion of hogs marketed. With the free-range rearing mode kept basically stable, in the future the company will gradually increase the volume and share of self-raised and self-fattened hogs marketed, and by tightly抓ing production management, it will continue to reduce hog-raising costs.

（Source: Securities Times）

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