Pig prices fall below 5 yuan, hitting a historic low, with a pig-to-grain ratio of 3.86:1 resulting in deep losses! Capacity regulation constraints are being upgraded.

Ask AI · Why is second-round fattening no longer propping up after the plunge in hog prices?

Hog prices continue to fall.

According to data from Zhuhahaodu.com, as of March 30, the nationwide ex-factory average price for live hogs (outer three varieties) has dropped to 9.36 yuan per kilogram. In the Northwest region, prices have fallen below 9 yuan per kilogram across the board. Nationwide, only Guangdong remains above 10 yuan per kilogram.

On the feed side, corn is quoted at 2422 yuan per ton, and soybean meal is 3258 yuan per ton—both rising—which further squeezes breeding profits. The hog-to-feed (corn) ratio has fallen to 3.86:1, placing it in a deep-loss range.

Industry insiders believe that this time, as hog prices grind along near the bottom, the market logic may have undergone profound changes. In the past, when hog prices fell to their trough, the second-round fattening group would enter in batches, forming a “floor” effect. But this year, even if hog prices have fallen below most practitioners’ psychological expectations, the appetite for entering second-round fattening remains clearly weak. According to data from Zhichuang Information, since March, the number of hogs in the sample companies sold to second-round fattening channels has decreased by 28.48% compared with the same period last year. With no “floor” from second-round fattening, the market is more real—and more brutal: the industry’s capacity must be reduced, and it can only be completed passively through bloodletting cash flow.

Relevant officials from the Ministry of Agriculture and Rural Affairs believe the core reason hog prices are continuing to decline is sufficient supply combined with the off-season in consumption. The industry generally expects that low-level consolidation will most likely continue through the end of the second quarter. In the second half of the year, prices may gradually improve. However, even if there is a rebound, the upside is likely limited.

However, amid the pessimism, there are also bright spots. First, the government has initiated the reserve purchases and storage of frozen pork and has instructed localities to simultaneously increase storage efforts, forming a coordinated regulatory force.

Second, as annual reports are disclosed, leading hog companies have shown more resilient operating capabilities.

Mufeng Co., Ltd.’s annual report shows that in 2025 it achieved revenue of 144.145 billion yuan and net profit of 15.812 billion yuan. Worth noting is that as of the end of 2025, Mufeng’s asset-liability ratio fell to 54.15%, down 4.53% from the beginning of the year.

Wen’s Co., Ltd. reported 2025 revenue of 103.884 billion yuan and net profit of 5.235 billion yuan. As of the end of 2025, Wen’s asset-liability ratio was about 50%. Wen’s also said that in 2026 it plans to further reduce the asset-liability ratio to around 48%.

In addition, in the secondary-market layer, there has been a phenomenon of capital flowing into livestock-breeding theme ETFs against the trend. As of March 27, the China Merchants (516670) Livestock Breeding ETF had net inflows of over 90 million yuan in the past 10 days.

Given the current situation, there is still no clear timeline for a hog-price reversal. The capacity reduction progress for breeding sows is relatively slow, and sentiment remains weak in the short term. For allocation-focused investors, today’s low valuations may be the right time to build positions in batches. For trading-focused investors, they may still need to wait for a right-side signal.

Risk warning: Funds involve risk; invest cautiously.