The most difficult "pig cycle" is approaching; breeding companies are taking multiple measures to "weather the winter."

(Source: Qianlong News)

On April 3rd, the main contract price of domestic live pig futures fell to 9,370 yuan/ton, hitting a new low since listing, while in the spot market, the average price of pig slaughtering dropped below 10 yuan per kilogram, the lowest in nearly a decade. Industry insiders believe that 2026 will be the “most difficult year” in recent pig cycles. Against this background, since 2026, the government has launched two rounds of central pig stockpiling to stabilize pig prices.

Securities Times reporters learned through multiple interviews that current pig prices have fallen below the industry’s average cost line, and the breeding sector is generally facing losses. Unlike previous cycles, during this price decline, the industry’s capacity reduction progress has been relatively slow, and market clearing still requires time.

Most analysts believe that, before substantial capacity reduction occurs, pig prices are likely to remain low and fluctuate in a narrow range in the short term. Facing the cycle’s trough, current breeding enterprises are “wintering” by reducing costs and increasing efficiency, optimizing financial structures, and expanding overseas markets to enhance risk resistance.

Pig Prices Hit Over Ten-Year Low

On March 31st, the average domestic pig slaughter price dropped to 9.43 yuan/kg, halving since August 2022, and falling more than 76% from the historic high of 40.38 yuan/kg in November 2019, marking a 14-year low.

“At this price, pig farming is not profitable; it’s good if we can lose less,” said Liu Liang, a pig farmer in Zhumadian, Henan, with about 300 sows. He noted that in March, the price of 6-kg piglets fell from over 300 yuan to below 250 yuan, making sales unprofitable. Continuing to raise pigs to market weight would likely deepen losses, so he had to sell quickly.

Also in Zhumadian, farmer Wang Kai bought a batch of piglets in late March to replenish his pig pens, which he had cleared before the Spring Festival. He believes that compared to last year’s price of over 500 yuan per head, the current average cost of piglets is very low.

“Prices won’t fall further from here. Based on current piglet and feed costs, by August, when pigs reach market weight, the cost per jin will be about 5.1 yuan. If pig prices recover slightly in the coming months, a pig could yield a profit of a hundred or so yuan,” he said optimistically.

However, in March 2026, the loss situation in the pig breeding industry worsened further.

Shanghai Ganglian Data shows that the nationwide average pig price in March was 11.64 yuan/kg, down 1.69 yuan/kg from February. The average loss per pig in self-breeding and raising was 257.53 yuan, an increase of 207.38 yuan; for purchased piglets, the loss was 157.95 yuan per head, up 156.96 yuan.

“2026 is indeed the most difficult year in recent cycles,” said a company executive at a listed pig breeding company during a recent earnings briefing.

Multiple industry insiders told Securities Times that with current market prices above four yuan per jin, the entire industry is in a loss-making state.

Retail investors perceive the impact of cyclical fluctuations more directly.

“The pig industry has been in a downward cycle for the past three years. 2023 and 2024 are only phase profits, and by 2025, losses will start to accumulate. The duration of this downturn has significantly exceeded the usual three- or four-year cycle, and many retail investors have given up and exited,” Liu Yuzhen said. Since the African swine fever outbreak in 2018, the proportion of retail investors self-breeding and raising pigs has sharply decreased. Those still willing to raise pigs mostly shifted to secondary fattening. In his village, about fifty households used to self-breed and raise pigs, with more than ten large-scale farms, but now only a few remain, and Liu Yuzhen’s family is the only one still engaged in large-scale self-breeding.

Capacity Reduction Still Requires Time

In response to the persistent low pig prices, the government has gradually optimized capacity regulation mechanisms, guiding industry practitioners to plan production reasonably. Since 2025, relevant departments have systematically regulated through reducing breeding capacity, limiting pig weights, and restricting second litters, with initial results showing capacity reduction.

Prior data from Muyuan Foods shows that in January-February 2025, the company’s maximum breeding sow inventory was 3.62 million, but by January 2026, it had been reduced to 3.13 million, a decrease of nearly 500k.

A person in charge at New Hope also stated that to respond to national policies, the company has been gradually reducing breeding sow inventory since Q3 of last year, from 760k in mid-2025 to 740k in early 2026.

However, the main reason for the continued decline in pig prices is still the imbalance between supply and demand.

An industry insider said that in recent years, African swine fever has pushed companies to improve management and biosafety systems, significantly raising overall breeding levels. Data such as sow productivity (PSY, pigs born alive per sow per year) has improved, and the average medication per pig in veterinary use has decreased, reflecting better environment and health management. Additionally, pig farming is continuous and cyclical, and policy regulation takes time to show effects; capacity reduction still needs time.

“From 2024 to Q3 2025, the pig breeding industry was generally profitable, and major players continued to expand capacity. Although the nationwide breeding sow inventory fell to 39.61 million by the end of 2025, down nearly 1 million from the start of the year, the combined effects of improved production efficiency, higher slaughter weights, and secondary fattening still exert significant supply pressure,” the insider said.

Regarding the outlook for pig prices in 2026, the New Hope executive believes that prices may bottom out in the first half of the year. As capacity regulation effects gradually manifest and pork consumption exits the off-season, supply and demand are expected to improve in the second half.

Wens Food Group also stated that it considers “going overseas” an important strategic direction and has formed a dedicated team to explore related work. Leveraging years of experience and channels in animal health, agricultural equipment, and environmental protection, the company plans to prioritize exporting broiler chicken products, with Vietnam as the first stop, aiming to capture about 10% of the local yellow-feather broiler market. Based on overseas development, the company will gradually expand into pig and duck industries, deeply exploring international market potential.

“Foreign breeding markets still have significant growth space. In recent years, domestic companies have gained competitive advantages, improved cost control, and have the opportunity and capability to export technology,” said the Wens Food Group executive. He added that in 2026, the company will continue focusing on internal operations, improving efficiency, and strengthening management and operational optimization, confident in successfully navigating this downturn and achieving new growth.

The person in charge at New Hope also mentioned that the company’s breeding farms now cover 116 cities across 25 provinces, completing a fixed asset capacity layout. In the future, the company will dynamically adjust its breeding layout based on regional production costs and disease prevention, such as favoring lower-cost western and South China regions to increase slaughter volume. While maintaining a relatively stable free-range model, the company plans to gradually increase self-fattening slaughter volume and proportion, continuously reducing pig-raising costs through strict production management.