Live Hog Futures Main Contract Hits a New Low as Industry Capacity Control Continues

Securities Times Reporter Zhao Liyun

On March 19, the main futures contract for live pigs in the domestic market declined again. At the close of trading, the live pig contract 2605 was quoted at 10,335 yuan/ton, with a intraday low of 10,250 yuan/ton, hitting a new low since listing.

Live pig spot prices down 30.6% year-on-year

In the spot market, according to SouPig.com data, on March 18, the average price for lean pigs nationwide was 10.07 yuan/kg, up 0.03 yuan/kg from the previous day’s 10.04 yuan/kg, a 0.3% increase; but compared to 14.51 yuan/kg a year ago, it has fallen by 4.44 yuan/kg, a 30.6% decrease year-on-year.

Shanghai Ganglian Data shows that since 2026, live pig prices have generally experienced an initial rise followed by a decline, continuing to hit new lows. In mid to early January, prices briefly surged to 13.15 yuan/kg. After the Spring Festival, due to oversupply and weak demand, prices plummeted. By mid to late March, the average price of external three-way cross pigs nationwide had fallen below 10 yuan/kg, reaching the lowest point since 2019, with a cumulative decline of over 24% this year, leading to deep industry losses.

In this context, industry sources reported that on the 19th, relevant departments held a meeting, requiring several pig enterprises to report their annual production targets and, based on the completion of reducing the breeding sow inventory, to cut back on annual slaughter volumes.

“Based on data from the Ministry of Agriculture and Rural Affairs and Zhuochuang Information, it is expected that pig prices will start to rise in the second half of 2026. However, from a policy perspective, capacity is still expected to be further regulated, and breeders may adjust sow breeding rates to control pig output, thereby reducing corporate losses,” said Zou Yingji, a pig analyst at Zhuochuang Information.

Herd size at historic high

Zou Yingji stated that over the past five years, the trend of pig prices has experienced two small cycles. The impact of pig diseases on the market has gradually weakened, and profit-driven capacity changes have caused price fluctuations, which are narrowing. Prices are currently in a state of oscillating decline. Due to capacity release, the industry’s breeding scale is at a historic high. The low pig prices are mainly due to the previous high levels of breeding sows, which correspond to high slaughter volumes now. Additionally, March is after the Spring Festival, a period of weak demand, further pushing pig prices to new lows.

Yuan Chunlan, an analyst at Shanghai Ganglian, said that the current domestic pig market is characterized by oversupply, with the industry under significant supply pressure. From a capacity standpoint, the number of breeding sows remains above regulatory targets, and with continuous improvements in breeding efficiency, the industry’s overall supply capacity remains high, supporting current and future slaughter volumes.

Mysteel data shows that in key provinces, the slaughter plans for large-scale farms in March increased by 17.63% month-on-month, with a clear acceleration in slaughter pace. Coupled with the large stock of heavy pigs held in earlier farms, the ongoing clearance of large pigs further increases market supply, and short-term pig prices still face strong supply pressure.

Ongoing losses in breeding enterprises

Since late January this year, the pig breeding sector has been in continuous loss. Data from Zhuochuang Information shows that in mid-March, the average loss per pig was about 225 yuan.

“Losses in breeding do not necessarily mean pig prices have bottomed out, but current prices are already relatively low, and further price drops are unlikely to support increased demand. Even with moderate market sales, breeders are reluctant to lower prices. On March 17, the nationwide average price for lean pigs monitored by Zhuochuang was 10.08 yuan/kg, with little room for further decline,” said Zou Yingji.

Regarding the overall price trend for pigs this year, Qu Guona, an analyst at Shanghai Ganglian (300226), predicts that pig prices in 2026 will likely show a pattern of initially low and then rising, with oscillations. Since the first half of the year is still in capacity release, combined with weak demand, prices will remain low and stabilize. If capacity reduction becomes evident and consumption gradually recovers in the third quarter, prices are expected to stabilize and rise. In the fourth quarter, seasonal factors will support a stronger trend, helping to recover previous losses and further increase prices.

Cinda Futures’ latest analysis suggests that pig prices still need more time to find a bottom. Data shows that at the end of January 2026, the nationwide breeding sow inventory was 39.58 million, a slight decrease month-on-month. The pace of sow capacity reduction is significantly slower than in 2021 and 2023. Additionally, the number of piglets born in sample enterprises at the end of January was 5.7804 million, still increasing month-on-month, indicating ongoing supply-side uncertainties in the second half of 2026.