Pig prices plummet! Leading pig farmers are suffering worse than liquor companies

Ask AI · How does an oversupply of hogs intensify the industry’s vicious cycle of losses?

This draft is written by the article author | Yuanhe

Data support | Gugu Data (www.gogudata.com)

The hog market is now facing its biggest test since the 2018 African swine fever outbreak.

Since the beginning of this year, hog prices have been falling continuously, with the cumulative drop already exceeding 15%. In March, hog prices accelerated their decline and hit the lowest level in seven years.

Data monitored by China Swine Industry Network shows that as of March 20, the national average ex-farm price of 3rd-generation hogs (wai san yuan) had already fallen to 10.24 yuan per kilogram, and was about to break through the psychological support level of 10 yuan per kilogram.

At this price, it is only 30 cents away from the 2018 historical “bottom” of 9.92 yuan per kilogram.

And 10 yuan per kilogram is already the lifeline for hog enterprises.

01

This round of hog prices, after reaching a phase high in 2024, then shifted into an inverted V pattern downward.

By the end of 2025, the national average hog price had already fallen to 12.13 yuan per kilogram, down 23% year over year, and the hog meat breeding industry has been in a long period of thin profit or even losses.

But this year, the situation is even more severe. Today’s hog market can be described as a scene of blood flowing.

If the tragedy in liquor is that its glory is no longer there, but profits remain abundant, then the tragedy in the hog industry is that the whole industry, from top to bottom, has no money to be made.

At present, the costs for small and medium-sized breeding enterprises across the industry are generally around 13 yuan per kilogram. Even for leading hog enterprises that mainly adopt “self-breeding and self-raising,” their breeding cost is around 12 yuan per kilogram.

That means that at today’s prices, both industry giants and small-scale breeders are already in an absolute loss situation.

At a price of 10 yuan per kilogram, selling one hog results in a per-head loss of more than 300 yuan.

And over the past stretch of time, agricultural product prices have risen significantly. Among them, the main raw material for hog feed—corn—has seen its price rise by nearly 10% over the past half year, and soybean meal’s price has also increased by over 10% within the year.

Now, the hog-to-grain ratio has remained below 5:1 for a sustained period. Over the past five years, the probability of the hog-to-grain ratio being in the 5:1 range has been only 18%.

After the collective price increase at the start of the year, in early March, several feed companies including New Hope and Double-bear (and others) once again issued multiple batches of price-hike notices.

Among them, starter feeds and concentrate feeds led the increase by 100 yuan per ton, nursery feeds rose together by 75 yuan per ton, and the rest of the hog feeds generally rose by 50 yuan per ton—further increasing hog breeding costs.

When costs rise, hog prices fall even more. Breeders lose even more money, and yet the number of hogs sent to market actually increases.

This is because as breeding costs increase, breeders will try to shorten the hog fattening cycle as much as possible, causing hogs to be sent to slaughter faster.

Combined with panic psychology caused by hog prices continuing to slide downward, it results in pork on the market being even more oversupplied, with prices continuing to fall.

Data shows that in the first two months of this year, the number of hogs marketed by listed hog enterprises across the country reached 30.44 million head, up nearly 10% year over year. This is precisely due to this panic-driven rushing to market. But such excess supply further squeezes hog prices.

Behind the accelerated decline in hog prices is a double squeeze on both supply and demand.

After the Spring Festival, it is the traditional off-season for pork consumption, and the pace of terminal shipments has clearly slowed.

But now, the “blocked waterway” of hog supply has still not been cleared for a long time.

Although the industry has fallen into deep losses, the capacity de-stocking has not yet achieved the target effect.

As of the end of 2025, the national stock of breeding sows with capacity to produce still stands at as high as 39.61 million head, exceeding the upper limit of the “normal” stock level of 39 million head set by the Ministry of Agriculture and Rural Affairs.

Moreover, because breeding technologies have improved and production efficiency (PSY, MSY) has increased significantly, that means even if the number of breeding sows stays at 39 million head, hog supply in the market may still continue to increase.

Through successive transmission at multiple levels, hog supply remains in continuous excess, and it is becoming increasingly serious.

With persistent imbalance between supply and demand and continued losses across the industry, market pessimism is gradually being transmitted. Recently, piglet prices have also fallen, indicating that breeders’ willingness to replenish stock is also declining.

The futures market performance is also far from optimistic. Hog futures’ main contract price once again hit historical lows, also indicating that the capital market is extremely pessimistic about the hog’s forward price.

Amid the widespread distress in the hog breeding industry, policy has begun to step up its efforts.

On February 10, at a video conference on the deployment of work for animal husbandry and veterinary medicine across the country, convened by the Ministry of Agriculture and Rural Affairs, “strengthening the comprehensive regulation of hog production capacity” was listed as one of the top priorities for this year.

In early March, the Ministry of Agriculture and Rural Affairs even jointly convened, together with the National Development and Reform Commission, an emergency meeting calling in seven large hog breeding enterprises.

At the meeting, it was stated that they will further strengthen regulation of hog production capacity. The target for the number of breeding sows may be lowered to around 36.5 million head, about 7.9% lower than the current level.

In addition, going forward, an annual production filing system will be established. It will include both the number of hogs to be marketed and a series of data related to capacity within the scope of filings.

In the past, stock targets were often soft constraints, and actual implementation often fell short of expectations.

But an annual production filing system means that all data during production must be subject to supervision, creating hard constraints for data such as sow inventory.

This also means that in the future, large hog enterprises will no longer be able to expand production and increase capacity at will.

According to market news, on March 19, relevant departments even held a meeting requiring each hog company to report its annual production targets, and requiring each company to make commitments to reduce production. On the basis of reducing the number of breeding sows with capacity, they must also reduce the annual number of hogs marketed.

With the industry in deep losses and the macro-level capacity regulation in place, how will the hog market move?

02

For a long time, the hog industry has been a cycle of rise and fall—

There are valleys, and there are peaks.

Although hog prices are still grinding at low levels, the stock performance of pork-related companies is not the same.

According to data from Tonghuashun iFind, since March, the Shenwan hog breeding industry index has risen by more than 4%.

Among them, Jinjih Intelligent Agriculture and Shennong Group each rose by over 10%, Wen’s Co., Ltd. rose by over 7%, and Muyuan Foods rose by over 4%.

Historically, compared with hog prices, pork stocks often hit their bottom about 10 months earlier and then begin to rally.

But now, pork stocks have already started ahead of hog prices. Is this abnormal movement whether capital is positioning itself in advance for the next turning point?

And has the hog market already reached the bottom of the cycle?

From a time perspective, after the super-cycle that lasted from 2019 to 2021 ended, the hog industry entered a phase of fragmented fluctuations.

In recent years, multiple small cycles have emerged, but their upward windows are extremely short, typically not more than half a year.

Now, in this cycle, the industry’s profit period started in April 2024 and continued until September 2025, lasting one and a half years.

Historically, the profit period of the hog cycle often matches the length of the loss period.

Based on this symmetry pattern, the coming loss and capacity de-stocking cycle may also need about one and a half years, forming a complete three-year long cycle.

This will be the longest and most torturous cycle “bottoming out” the industry has faced since 2019.

And a larger cycle usually means more intense volatility and a more thorough market clearing.

In the 1–2 month sales briefings released by hog enterprises, 19 listed hog enterprises collectively sold 30.43 million hogs in 1–2 months, up 9.9% year over year.

However, because hog prices fell, listed hog companies showed a clear pattern of “more volume but lower price.” Their sales revenue generally declined. For example, Muyuan and Wen’s saw their February sales revenue fall 23.98% and 15.58% year over year, respectively.

That means that when the first-quarter reports are released, listed hog enterprises will most likely incur losses across the board.

When deep industry losses continue for a quarter and the depth of losses keeps consuming cash flows, it is often a precursor to a new round of upward cycle.

But the special feature of this cycle is that the profit period of 2024–2025 allowed leading companies to accumulate some cash flow to buffer the impact.

Therefore, even if there are interim losses in the fourth quarter of 2025, it does not force enterprises to proactively reduce production capacity. Even in 2025, the number of market hogs marketed by listed hog enterprises is still 20% higher than in 2024.

At present, the logic for capacity de-stocking in the hog market is already quite clear, but the truly intense “clearing” still has to wait until the reserves of the giants are completely used up.

Only when losses continue long enough to consume these reserves, and when hog breeding leaders are forced to sell assets or pause capacity expansion, can the pressure on cash flow ultimately convert into the real driving force behind capacity de-stocking.

For hog enterprises in the coming period, pausing expansion or even shrinking capacity will become the main direction, and the industry reshuffle is about to begin. Companies with higher breeding costs may be hit first.

On valuation: currently, the PB of the hog breeding industry index has risen from the bottom, but it remains at the historical median level, and there is still room for further upside.

The pork stocks’ advance in unusual movement might be an early sign of the cycle’s bottom. However, because industry leaders have cash reserves, this round’s cycle bottoming out may appear relatively prolonged.

In the next period, leading companies with cost advantages and ample cash flow may still struggle with quarterly losses. But after industry capacity is genuinely de-stocked, there is hope for a double improvement in both valuation and profits.

03

Conclusion

Today’s hog industry is in the darkness before dawn, but how long the darkness will last is something no one can know.

Therefore, in the short term, from March to April, the hog industry will still be in a phase of rapid de-stocking. There is room for hog prices to fall further.

During Qingming and the May Day holidays, pork stockpiling for consumption may lead to a modest rebound in hog prices, but the pattern of oversupply will still be difficult to fundamentally change.

This also means the whole pork sector will face continued losses for another two to three quarters. The duration of the double loss for both piglets and market hogs in this round may exceed that of 2023.

In 2023, this round of loss cycle helped drive cumulative capacity de-stocking of about 10%.

But as the industry accelerates capacity de-stocking, together with a recovery in consumption, hog prices are expected to stabilize and rise.

If the number of breeding sows falls to the 36.5 million head red line and supply tightens, hog prices may experience a substantive increase.

Only then would the turning point of the cycle truly become visible.