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

Source: Securities Times

Securities Times Reporter Zhao Liyun

On April 3rd, the main contract price of domestic live pig futures dropped to 9,370 yuan/ton, hitting a new low since listing, while in the spot market, the average price of pigs sold fell below 10 yuan per kilogram, the lowest in over a decade. Industry insiders believe that 2026 will be the “most difficult year” in recent pig cycles. Against this background, since 2026, the government has launched two rounds of central pig stockpiling to stabilize pig prices.

Securities Times reporters learned through multiple interviews that current pig prices have fallen below the industry’s average cost line, and most breeders are in a loss-making situation. Unlike previous cycles, during this price decline, the industry’s capacity reduction progress has been relatively slow, and market clearing still requires time.

Most analysts believe that, before substantial capacity reduction occurs, pig prices are likely to remain low and fluctuate in the short term. Facing the cycle’s trough, current breeding enterprises are “getting through the winter” by reducing costs and increasing efficiency, optimizing financial structures, and expanding overseas markets to enhance risk resistance.

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Pig prices hit a decade-low

On March 31st, the average price of pigs sold in China dropped to 9.43 yuan/kg, halving from August 2022, and falling more than 76% from the historical high of 40.38 yuan/kg in November 2019, marking a 14-year low.

“At this price, pig farming is not profitable; it’s good if we can lose less,” said Liu Liang, a breeder in Zhumadian, Henan, with about 300 sows. He noted that in March, the price of 6-kg piglets fell from over 300 yuan to below 250 yuan, making sales unprofitable. Continuing to raise pigs to market weight would likely deepen losses, so he had to sell quickly.

Also in Zhumadian, breeder Wang Kai bought a batch of piglets in late March to replenish the pig pens he had cleared before the Spring Festival. He believes that compared to last year’s price of over 500 yuan per pig, the current average cost of piglets is very low.

“Prices won’t fall further from here. Based on current piglet and feed costs, it will cost about 5.1 yuan per jin (half a kilogram) to raise a pig to market weight by August this year. If pig prices recover slightly in the coming months, a pig could yield a profit of a hundred or so yuan,” he said optimistically.

However, in March 2026, the loss situation in the pig breeding industry worsened further.

Shanghai Ganglian Data shows that the national average pig price in March was 11.64 yuan/kg, down 1.69 yuan/kg from February. The average loss per pig in self-breeding and self-rearing in the month reached 257.53 yuan, an increase of 207.38 yuan; for purchased piglets, the average loss was 157.95 yuan, up 156.96 yuan.

“2026 is indeed the most difficult year in recent cycles,” said a company executive at a listed pig breeding company during a recent earnings briefing.

Multiple industry insiders told Securities Times that, with current market prices at just over four yuan per jin, the entire industry is in a loss-making state.

Retail investors are more directly affected by cyclical fluctuations.

“The pig industry has been in a downward cycle for the past three years. 2023 and 2024 are only phase profits, and by 2025, losses will start to accumulate. The duration of this downturn has significantly exceeded the usual three- or four-year cycle, and many retail investors have given up and exited,” Liu Yuzhen said. Since the African swine fever outbreak in 2018, the proportion of retail self-breeding has sharply decreased. Those still willing to raise pigs mostly shifted to secondary fattening. In his village, there used to be 40-50 self-breeding households, with more than ten large-scale farms, but now only a few remain, and only Liu Yuzhen’s family continues large-scale self-breeding.

Capacity reduction still needs time

In response to the persistent low pig prices, the government has gradually optimized the capacity regulation mechanism in recent years, guiding industry practitioners to plan production reasonably. Since 2025, relevant departments have continued to implement systematic controls such as reducing breeding capacity, limiting weight gain, and restricting second litters, with initial results showing capacity reduction.

Pioneer Co., Ltd. previously reported that in January-February 2025, the company’s maximum breeding sow inventory was 3.62 million, but by January 2026, it had been reduced to 3.13 million, a decrease of nearly 500k.

New Hope’s relevant officials also said that to respond to national policies, the company has been gradually reducing breeding sow inventory since the third quarter of last year, from 760k in mid-2025 to 740k in early 2026.

However, the main reason for the continued decline in pig prices is still the imbalance between supply and demand.

An industry insider from a listed company said that in recent years, African swine fever has forced companies to improve management and biosafety systems, significantly raising overall breeding standards. Data such as sow productivity (pigs weaned per sow per year) have improved, and the average medication use per pig has decreased, reflecting better environment and health management. Additionally, pig farming is continuous and cyclical, and policy adjustments take time to show effects, so capacity reduction still requires time.

“From the third quarter of 2024 to the third quarter of 2025, the pig breeding industry was generally profitable, and major players continued to expand capacity. Although the national breeding sow inventory decreased to 39.61 million by the end of 2025, down nearly 1 million from the start of the year, the combined effects of improved production efficiency, higher slaughter weights, and secondary fattening still exert significant pressure on supply,” the insider said.

Regarding the outlook for pig prices in 2026, the New Hope executive believes that prices will likely bottom out in the first half of the year. As capacity regulation effects gradually manifest and pork consumption exits the off-season, supply and demand are expected to improve in the second half.

Wenshi Co. also stated in an interview that pig prices have been declining since October 2025 and are now at a bottom range. “It’s hard to determine exactly when prices will reverse. Currently, prices are at historic lows, and further declines are unlikely,” they said.

A Pioneer Co. representative believes that, according to data from the National Bureau of Statistics and the Ministry of Agriculture and Rural Affairs, industry capacity has started to decline since late 2025. This suggests that in the first half of 2026, pig slaughter will remain ample, and combined with post-holiday consumption slowdown, pig prices are likely to hit their lowest point of the year. Under the joint influence of government capacity regulation and market self-adjustment, capacity reduction effects are expected to gradually appear from the end of the second quarter, and supply and demand will improve, stabilizing pig prices. With the further boost from the peak consumption season in the second half, pig prices may gently rise. Therefore, the overall trend for pig prices in 2026 is expected to be low at first and higher later.

“Compared to previous pig cycle downturns, this decline cycle is longer, with weaker rebounds, and more obvious bottoming oscillations,” said Sun Zhilei, an analyst at Shanghai Ganglian. Based on indicators such as sow inventory, pig slaughter volume, and duration of industry losses, the current pig market has entered the bottom of the cycle, but supply pressure has not been fully alleviated, and capacity reduction is still insufficient. In the short term, pig prices may continue to fall, and the true cycle bottom can only be confirmed after further capacity reduction and significant easing of slaughter pressure.

Optimizing internal operations and expanding overseas markets

In the face of weak market conditions, many listed pig breeding companies are taking multiple measures to enhance their resilience through the cycle.

“Under current market conditions, the company will adopt a more cautious management strategy, prioritizing cash flow safety to ensure sufficient financial resilience during volatility,” said a representative from Pioneer Co. They plan to continuously optimize debt structures, reasonably utilize various financing tools to reduce financing costs, and keep financial indicators at safer, healthier levels to improve overall operational quality.

After listing on the Hong Kong Stock Exchange in February 2026, Pioneer Co. will also leverage global capital to empower industry development.

The representative added that the company will continue to steadily advance existing projects in Vietnam and actively explore opportunities in other countries, strengthening overseas teams. Over the next 3 to 5 years, they hope to find ways to create value for local pig industries through output solutions, addressing local pain points.

Wenshi Co. recently announced that “going overseas” will be a key strategic direction, and they are forming dedicated teams to promote related work. The company will leverage its experience and channels in animal health, agricultural equipment, and environmental protection to prioritize exporting broiler chicken products, with Vietnam as the first stop, aiming to capture about 10% of the local yellow-feather broiler market. Based on overseas development, they plan to gradually expand into pig and duck industries, deeply exploring international market potential.

“The overseas breeding market currently has significant growth potential. In recent years, domestic companies have built strong competitive advantages, improved production cost control, and gained opportunities and capabilities for technology export,” said the Wenshi executive. They believe that in 2026, the company will continue to focus on internal production and management, improve efficiency, and strengthen internal operations and optimization, confident in successfully navigating this downturn and achieving new growth.

The executive from New Hope also mentioned that the company’s farms now cover 116 cities across 25 provinces, completing its fixed asset capacity layout. In the future, the company will dynamically adjust its biological asset layout based on regional production costs and disease prevention, such as favoring lower-cost western and South China regions for biological assets to increase slaughter proportion. While maintaining a relatively stable free-range model, they plan to gradually increase self-fattening slaughter volume and proportion, continuously reducing pig-raising costs through strict management.