Pig prices plummeted nearly 30% this year, with fattening farmers "losing a pound for every pound sold"! Capital is counter-cyclically investing in livestock-themed ETFs.

Ask AI · Pig prices plummeted over 27%, why is capacity reduction so slow?

According to Pig Haoduo Network monitoring, in late March, the nationwide lean pig average price once fell below 9.62 yuan/kg, continuing to hit a decade-low, with a cumulative decline of over 27% from the January high of 13.16 yuan/kg.

Based on current feed costs, the industry’s average breeding profit is about -280 yuan per head, with fattening households trapped in an extreme dilemma of “losing money on every pound sold,” with ongoing losses exceeding half a year.

Regarding the pig-to-grain ratio, the current ratio is about 3.88:1, below the over-10% warning line (5:1) set by the National Development and Reform Commission for excessive pig price decline, and some regions have initiated reserve storage and stabilization mechanisms. Historically, a persistently low pig-to-grain ratio usually indicates the industry is in a deep loss phase, significantly increasing the likelihood of accelerated capacity reduction.

From the supply side, in the first quarter of 2026, the slaughter volume of large-scale pig enterprises increased by 17.6% year-on-year. Group farms are eager to capture market share, while smallholders, facing high costs, are passively accelerating exit. According to the Ministry of Agriculture and Rural Affairs, the breeding sow inventory has fallen from its peak but still remains above 41 million heads, and the pace of capacity reduction is slower than expected.

Notably, the price of piglets has recently shown clear divergence. Some smallholders are more actively restocking at low prices, and secondary fattening is stirring, reflecting market expectations of a rebound in pig prices in the second half of the year. However, mainstream institutions generally believe that the peak slaughter volume corresponding to the breeding sow inventory will occur in the second quarter of 2026, and the most intense supply pressure phase has not yet passed. A complete reversal of the pig price decline will still take time.

On the demand side, with the Qingming holiday approaching, terminal consumption is expected to see a phased recovery. Industry insiders believe that Qingming typically boosts pork consumption through demand for cured meats in northern regions and ancestor worship in the south. However, this year’s holiday is short (April 4-6), combined with diversified consumer habits and weak catering demand, leading to cautious expectations about the holiday’s boosting effect. The slaughter enterprises’ frozen product inventory rate has risen to a high of 18.72%, and digestion of frozen stock takes time, also putting downward pressure on fresh pork prices.

Although fundamentals remain on the left side,敏锐的资金已开始悄然布局。**Livestock Breeding ETF招商（516670）**在3月31日单日净流入超过37M元，**在近10个交易日累计净申购128M元，**显示部分投资者在当前位置逆势布局。

Market analysts believe that the current pig breeding industry may be experiencing “darkness before dawn.” GF Securities pointed out that, as the price of piglets declines along with the price of commercial pigs, the 7kg price has fallen below 300 yuan per head. The industry is entering a cyclical bottom, and capacity reduction may begin. Benefiting from factors such as industry fixed asset peaks, policy regulation, and efficiency bottlenecks, the new cycle’s elasticity and sustainability are more worth期待。

Risk warning: Funds carry risks; investments should be cautious.