Pork Prices Decline + Performance Under Pressure, Chill Deepens in Hog Farming Industry

Special Topic: External Shocks Do Not Change the Market’s Steady Foundation; China’s Asset Long-Term Upward Trend Remains Firm

Since March, the domestic pig market has continued to weaken: on one hand, oversupply and weak demand have pushed pig prices below 11 yuan/kg, approaching the historic lows of 2018; on the other hand, feed costs for companies have risen due to higher soybean meal and corn prices, plunging the entire industry into deep losses.

In response to the ongoing downturn, policymakers are beginning to signal support, from lowering the breeding sow inventory control targets and urging leading companies to reduce annual slaughter volumes, to tightening financial support for farm expansion and promoting precise insurance coverage and claims for pigs. A comprehensive policy support system is gradually taking shape.

Pig Prices Continue to Fall

Industry Faces Widespread Losses

Data from China Swine Network show that as of March 19, the price of external three-way pigs nationwide dropped to 10.26 yuan/kg, hitting a new low for the year, with the largest decline nearly 23%, and a year-on-year decrease of over 30%. This price not only broke through industry cost lines but also approached the historic lows of 2018.

Looking back at historical trends, the lowest pig price in the past decade was 9.92 yuan/kg in Q2 2018. The current price is only about 0.3 yuan/kg above that low, testing the industry’s “psychological barrier.”

“Currently, the entire pig farming industry is operating at a loss,” said Zhu Di, a pig research analyst at GF Futures. She explained that under a self-barming and self-rearing model, the industry has been losing money since late September 2025. Although there was a brief profit in January 2026, the spot prices accelerated downward after the Spring Festival, and the entire industry has entered a cash flow loss stage.

The piglet market is also bleak. Data released by the Ministry of Agriculture and Rural Affairs on March 18 show that in the second week of March, piglet prices fell in 25 provinces nationwide, with an average price down 2% week-on-week and 27.1% year-on-year.

The futures market also reflects a pessimistic outlook: the main pig futures contract 2605 has fallen for four consecutive trading days. As of March 19, the closing price was 10,335 yuan/ton, down over 7% from March 13, with the lowest intra-day price at 10,250 yuan/ton, the lowest since the contract’s listing.

In stark contrast to the falling pig prices, feed costs continue to rise. Statistics show that the main price of soybean meal has increased by 11% year-to-date, and corn prices have risen by 8% over the past six months. Zhu Di noted that recent trends in soybean meal and corn prices have been strong, with continuous increases over the past two months, further raising breeding costs and worsening profit margins.

Listed Pig Companies See Volume Growth, Price Decline

First Quarter Performance Under Pressure

The ongoing slump in pig prices is directly reflected in the sales data of listed pig companies.

According to statistics, 19 listed pig companies reported sales briefs for January and February, with a total slaughter volume of 30.43 million pigs, up 9.9% year-on-year. However, their sales revenue generally declined.

Leading company Muyuan Foods slaughtered 11.61 million pigs in the first two months. Its sales revenue in January and February fell by 11.93% and 23.98% year-on-year, mainly due to a sharp drop in the average selling price of commercial pigs. Wen’s Food’s February sales revenue was 3.956 billion yuan, down 15.58% and 15.79% respectively from the previous month and year, reaching the lowest level since 2025. New Hope’s February sales declined by 7.42%. Tangrenshen sold 874,600 pigs from January to February, up 1.99% year-on-year, but sales revenue dropped by 22.74%.

In the face of the industry winter, leading companies are revealing their “winter strategies.”

Wen’s Food recently told institutional investors, “With over 40 years of development, we have accumulated multiple cycles of experience and are prepared for continued low pig prices. Currently, our pig and chicken breeding costs are among the top in the industry, giving us confidence to withstand the cycle.” The company disclosed that its debt ratio had fallen to about 50% by the end of 2025, with plans to further reduce it to 48% in 2026. Importantly, its chicken business remains profitable and provides stable cash flow.

Muyuan’s stance is “not betting on cycles or guessing prices, but relying on cost management and operational efficiency to navigate cycles.” The company stated that it currently has ample cash reserves and hundreds of billions of yuan in unused credit lines, ensuring financial security. Future profitability depends on improving the efficiency of existing breeding scale and expanding and strengthening the slaughtering business.

Policy Signals of Support

When Will the Market Turn?

Amid the industry’s deep losses, policymakers are beginning to send strong signals of support.

In early March, the Ministry of Agriculture and Rural Affairs, together with the National Development and Reform Commission, held a special meeting with seven major pig breeding enterprises, proposing to further strengthen pig production capacity regulation. The control target for breeding sows may be lowered to around 36.5 million, and a filing system will be established to reinforce companies’ responsibility for capacity control. Meanwhile, financial support for farm expansion will be tightened, with clear principles against supporting large-scale expansion, aiming to improve quality and efficiency. Additionally, insurance policies are being optimized, promoting precise insurance coverage and claims for pigs.

On March 19, relevant departments held another meeting, requiring companies to fulfill reduction commitments and cut slaughter volumes based on the reduction of breeding sows.

Reviewing the policy history, on March 1, 2024, the Ministry of Agriculture and Rural Affairs issued the “Implementation Plan for Swine Capacity Regulation (2024 Revision),” lowering the national target for normal breeding sow inventory from 41 million to 39 million. By the end of 2025, the breeding sow inventory is expected to reach 39.61 million.

Based on the cycle that “about 10 months after the breeding sow inventory is affected, pig slaughter volume will be impacted,” and considering current efficiency factors, some institutions estimate that the pig price may bottom out in Q3 2026. They forecast the average pig price for 2026 to be around 13 yuan/kg, with the first half at about 12.2 yuan/kg and rebounding to 14 yuan/kg in the second half.

However, most listed pig companies remain cautious about a cycle reversal. A senior executive from a leading domestic pig enterprise told Shanghai Securities Journal that the industry’s inventory reduction is slower than expected, and rising feed costs are further squeezing profit margins, making the profit space even narrower.

“While there is some optimism, the signs of reversal are not yet clear. We can only watch and see,” the executive said. “A true turnaround will require substantial inventory clearance; currently, the industry is still in the cycle bottoming phase.”

(Source: Shanghai Securities News)