Recent frozen pork reserve rotation and purchasing have proceeded intensively, but central reserve operations are mainly based on “purchasing one batch and releasing one batch,” with limited net additions, so they are unlikely to lift prices. The pig-to-grain price ratio has fallen below the Level One warning threshold, and the industry has been in the red for 14 consecutive months, with peak-season demand failing to materialize.
Although the breeding sow population has been reduced, improved farming efficiency has enabled “fewer sows without less pork”: pork production continues to rise. Combined with the declining share of consumption, the pattern of strong supply and weak demand remains unchanged. Pork prices are unlikely to rise in a sustained trend in the short term. A cyclical reversal hinges on capacity being cleared and consumption recovering.
Losses for 14 months, and the hog-to-grain price ratio has breached the warning line!
Why has the hog price failed to reverse despite repeated unsuccessful reserve pork auctions?
At the end of the third quarter, the national live pig inventory stood at 42533 ten thousand head, down 2.6% year on year and 1147 ten thousand head lower than in the same period last year. This is a fairly significant decline, indicating that after several consecutive months of losses, quite a few farms really could not hold on and began to passively reduce production capacity. There were fewer pigs in the pens—that is a fact.
But looking at the number of pigs slaughtered immediately afterward, the picture changes. In the first three quarters, the country slaughtered 53739 ten thousand head of pigs, up 1.4% year on year, an increase of 747 ten thousand head. Inventory is declining while slaughter numbers are rising, which may seem somewhat counterintuitive at first glance, but it is not actually surprising. The pigs being slaughtered now mostly come from a period when the number of breeding sows was higher. The effect of fewer sows will not show up in slaughter numbers immediately; there is a lag in between.
More importantly, pork production. In the first three quarters, national pork production was 4508 ten thousand tonnes, up 3.2%, an increase of 140 ten thousand tonnes. The number of pigs sent to slaughter rose by only 1.4%, while pork production rose by 3.2%; the difference lies in weight and efficiency. As the industry average PSY improves, the same number of sows can provide more piglets; holding pigs longer and increasing their weight also means more meat per pig. As a result, there are fewer pigs in the pens, but the amount of pork on the market has not fallen in tandem.
The most closely watched figure in this data is the inventory of breeding sows. At the end of the third quarter, the national inventory of breeding sows stood at 3602 ten thousand head, down 433 ten thousand head year over year, a decrease of 10.7%, with the decline widening by 4.2 percentage points from the second quarter. This figure is already below the normal inventory target of 3750 ten thousand head, equivalent to 96.0% of the normal inventory. Breeding sows determine the supply of market hogs 10 months later. The decline in this figure indicates that a contraction in longer-term supply is already emerging.
But a contraction in the longer term does not mean that supply will tighten immediately. The market is still facing the pressure from animals accumulated earlier that are coming to market. In 10 month, planned hog shipments from corporate farms increased month on month. Year-end efforts to boost sales and cash collection needs remain, and standard-weight and large hogs continue to be released onto the market.
Weight is also a real source of pressure. The current average weight of hogs at slaughter is around 129 kilograms, a relatively high level for the same period in the past five years. Higher weights mean that each pig provides more pork. The heavier pigs held back earlier have not been fully cleared, and as the weather turns colder, the pigs will continue to gain weight, further amplifying supply pressure.
Frozen product inventories are also weighing on the spot market. The frozen product storage capacity utilization rate at key slaughtering enterprises remains above three tenths, with some monitoring measures showing it at around 31.87%. High frozen product inventories divert demand from fresh meat. Once spot prices rebound, the willingness to release frozen products from storage increases, further limiting the room for a rebound.
There has been no clear boost in demand either. After stocking for the Mid-Autumn Festival and National Day ended, slaughterhouse operating rates declined, and end-consumer demand returned to normal. Fresh pork sales were weak, and slaughterhouses mostly procured according to orders, with a clear tendency to push down purchase prices for live pigs. Meanwhile, ample supplies of substitutes such as poultry, beef and mutton, and aquatic products also diverted demand from pork.
Climate factors have also been repeatedly cited by the market this year. The National Climate Center confirmed that a super El Niño event had formed in 2026 year 9 month, with the probability of it lasting until 2027 year 2 month close to 100%. Expectations of a warm winter could delay and reduce pickled and cured meat consumption in southern China. Pickling and curing typically provide important support for pork consumption in the fourth quarter; if this gets underway later, short-term demand elasticity will be affected.
Costs are also challenging. The national average price for live hogs recently hovered around 9.8 yuan per kilogram, while the pig-to-grain price ratio remained below the first-level warning line for excessive declines. Both farrow-to-finish and purchased-piglet operations are generally operating at a loss; some estimates show that the loss per head for farrow-to-finish operations is close to 260 to 280 yuan. Cash flow pressures continue to build, making restocking, holding hogs back for later sale, and secondary fattening more cautious. Piglet prices, prices for two-way crossbred sows, and prices for culled sows have all weakened in tandem, indicating that producers remain reluctant to restock.