Capacity regulation in the hog industry is ongoing. Yet despite the sharp decline in the number of breeding sows, hog prices have shown little improvement.
According to the latest data released by the National Bureau of Statistics, at the end of the third quarter, the national breeding sow inventory stood at 3602 ten thousand head, down 10.7% year on year, entering the “green zone” for capacity regulation defined by the Ministry of Agriculture and Rural Affairs. However, the accelerated reduction in breeding sow numbers has not brought a rebound in hog prices. Hog prices are currently around 9 yuan/kg, still some distance from the break-even level of 12 yuan/kg for most livestock farming companies.
Breeding sow numbers down by 433 ten thousand head, but hog marketings are still growing
The latest data from the National Bureau of Statistics show that in the first three quarters, growth in the number of pigs slaughtered in China slowed, while the reduction in baseline production capacity accelerated. At the end of the third quarter, the national pig inventory was 42533 ten thousand head, down 1147 ten thousand head year on year, a decrease of 2.6%. Of this total, the inventory of breeding sows was 3602 ten thousand head, down 433 ten thousand head year on year, a decrease of 10.7%. The decline widened by 4.2 percentage points compared with the second quarter. The current inventory is 96.0% of the normal holding level of 3750 ten thousand head.
According to the Implementation Plan for Comprehensive Regulation of Pig Production Capacity, revised and issued by the Ministry of Agriculture and Rural Affairs in 2026 year 5 month, a breeding sow inventory within the range of 92%–103% of the normal holding level (3750 ten thousand head) is considered the green zone. This also means that China’s current breeding sow inventory is within the normal range.
Reducing the breeding sow inventory has become an industry consensus.
According to the data, as of the end of 9, the breeding sow inventory among the pig inventories of 196 sample companies was 841.23 ten thousand head. Capacity reduction among sample companies accelerated in the third quarter, with an average monthly decrease of 1.03%, widening by 0.37 percentage points compared with the second quarter. According to research, breeding sow inventories are declining across all types of farming operations, with more of the reductions concentrated among small and medium-sized independent farmers.
“The decline in the number of breeding sows is indeed accelerating. The reduction has a ‘two-tier structure’: first, due to continuous losses since 10 month of last year, small and medium-sized independent farmers are mainly culling low-efficiency sows and exiting the industry; second, large-scale farms are making structural reductions, proactively culling older, low-yield sows and optimizing their herds,” said Zhu Zengyong, a researcher at the Beijing Institute of Animal Husbandry and Veterinary Medicine, Chinese Academy of Agricultural Sciences.
However, the “brakes” on the number of breeding sows have not yet had an effect on the number of pigs brought to market.
In the first three quarters, a total of 53739 million pigs were brought to market nationwide, an increase of 747 million year on year, or 1.4%, with the growth rate down 0.3 percentage points from the first half of the year. Pork production totaled 4508 million tonnes, an increase of 140 million tonnes year on year, or 3.2%.
However, listed pig farming companies showed divergent trends in the pace at which they brought pigs to market. New Hope, Wen's Foodstuff Group, Jingji Zhinnong, and Da Bei Nong saw year-on-year declines in the number of pigs brought to market. By contrast, several companies, including Zhengbang Technology, Aonong Biotechnology, Kemen Foods, Tech-Bank Food, and Jinnong, recorded year-on-year increases of more than thirty percent.
The “inertial” growth on the supply side directly pushed down hog prices.
According to data from the Ministry of Agriculture and Rural Affairs, in the 10 month, during the 3 week (from 10 month 12 to 18), the national live hog price was 10.89 yuan/kg, down 1.6% month on month; the average wholesale price of pork in the national market was 15.83 yuan/kg, down 0.6% month on month and 12.6% year on year. Data disclosed by several publicly listed pig farming companies also showed that in 9, the selling price of live hogs was around 10.5 yuan/kg, down approximately 20% year on year.
This price is already significantly below the industry cost floor. “At present, the break-even point for most farming companies is 11.6–12.0 yuan/kg, while for leading companies it is around 11.5 yuan/kg,” said Zou Yingji.
Zhu Zengyong also noted that the industry’s average full cost is around 12–13 yuan/kg. However, costs varied considerably among farms and farming households during this cycle, changing the pattern seen in previous cycles, when scale operations were uneconomical. The full production costs of more efficient large-scale farms and leading companies are significantly lower than those of small and medium-sized independent farms.
Normally, it takes about 10 months for changes in the breeding sow population to be reflected in market hogs shipped for slaughter. However, as farming efficiency improves, the impact of breeding sow numbers on hog supply is gradually diminishing.
“‘Fewer sows but no less pork’ is a typical feature of this cycle. The industry average PSY has risen from about 2018 head in the year 18 to more than 24 head currently, with leading companies exceeding 30 head. Combined with a lower feed-to-meat ratio and adjustments to slaughter weight, the normal breeding sow inventory will be adjusted flexibly as PSY rises and pork consumption trends downward.” Zhu Zengyong said.
When will the industry enter a profitable range?
Several industry insiders believe that when hog prices emerge from their trough depends on rebalancing between supply and demand.
On the supply side, apart from the inventory of breeding sows, farming efficiency is another key variable. In recent years, leading pig companies have generally increased investment in improving PSY, while also diluting costs by raising the proportion of self-raised pigs.
The decline in the inventory of breeding sows was slow in the earlier period, while production indicators improved relatively quickly. At the same time, as temperatures fell, pigs grew faster, so the number of pigs marketed may still increase in the short term. It is projected that negative growth in the number of pigs marketed may occur as early as the second quarter of 2027 or as late as the second half of 2027.
Meanwhile, farming costs are also an important factor affecting profitability.
At present, feed raw material prices in China are at low levels. As of 10 month 16 day, the domestic spot price of corn was about 2167 yuan/ton, down 1.56% week on week; the price of compound feed for finishing pigs was 3.36 yuan/kg, unchanged from the previous period. Many pig companies are also seeking to reduce costs and improve efficiency. At present, the fully loaded costs of cost-leading companies such as Muyuan Foods, Wen's Foodstuff, New Hope, Shennong Group, and Da Bei Nong have fallen below 12 yuan/kg.
Another important factor lies on the demand side.
“China’s pork consumption demand has entered a structural downward trend. Per capita household pork consumption fell from 2023 kilograms in 30.5 to 2025 kilograms in 26.6, a cumulative decline of 12.8%. Pork’s share of meat consumption fell from 2018% in 62 to 2025% in 57.” Zhu Zengyong told reporters that the key contributing factors include changes in the population structure, including an aging population and a slowdown in urbanization; dietary substitution, with poultry, beef and mutton, and aquatic products gaining share; health-conscious consumption; and macroeconomic conditions and residents’ income expectations.
As for this year’s performance, market assessments indicate that end-consumer pork consumption has been “below expectations,” as reflected in insufficient holiday stockpiling and declining demand for cured meat products year after year.
According to data from the National Bureau of Statistics, substitutes for pork are gaining ground in the meat consumption mix. In the first three quarters, poultry slaughter nationwide reached 143.0 billion birds, up 7.8% year on year, while poultry meat output reached 2244 ten thousand tonnes, up 9.3% year on year—well ahead of the 3.2% growth in pork output.
Based on the above factors, hog prices are expected to recover to the break-even point in the second or third quarter of 2027.
In addition, piglet prices have continued to hit new lows—piglets weighing 7 kilograms have fallen to 105 yuan per head, down about 29.5% from the end of 8—and deepening losses in hog farming are prompting further capacity reductions in the industry. However, the pace of reduction in the number of breeding sows slowed markedly in 9, so improvements in supply and demand may be more evident in the second half of 2027.
Zhu Zengyong noted that, constrained by three factors—a downward trend in demand, stronger countercyclical adjustment capabilities at large-scale farms, and the drawdown of frozen-product inventories—farming returns are expected to begin improving somewhat in the latter part of the second quarter next year.
“In the first half of next year, prices can return to around the break-even point, and the profitability window will last no more than one year. The price peak is difficult to predict, but it is unlikely to exceed 20 yuan per kilogram.”