According to data from the National Bureau of Statistics, at the end of the third quarter, the national pig inventory stood at 42533 ten thousand head, a year-on-year decrease of 1147 ten thousand head, down 2.6%, marking the first year-on-year decline since 2025.
The number of live pigs on hand has finally turned downward. Does this mean that the “spring” for pig farming companies is just around the corner?
01. Wen's smaller losses of 27 hundred million were not achieved through pigs.
Recently, Wens Foodstuff Group disclosed its financial results for the first three quarters of 2026. During the reporting period, the company generated revenue of 721.97 billion yuan, down 4.74% year over year; net loss attributable to shareholders of the parent company was 49.61 billion yuan, compared with a net profit in the same period last year.
It is worth noting that the company’s net loss attributable to the parent company narrowed significantly in the third quarter alone, to 5.96 hundred million yuan, compared with a loss of 32.96 hundred million yuan in the second quarter, a reduction in losses of nearly 27 hundred million yuan.
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Wens’s ability to reduce its quarterly loss this time was primarily supported by its yellow-feathered broiler business. In the third quarter, consumer demand drove up yellow-feathered chicken prices. The average sales price of live chickens continued to rise from 7 to 9, and the average price in 9 increased year over year. The yellow-feathered chicken business saw growth in both sales volume and prices, improving the operating performance of the company’s poultry segment.
Across the entire livestock farming industry, profitability in the poultry sector has recovered, making it one of the few profitable segments at present. The improvement is not limited to Wen’s: poultry companies generally saw their third-quarter results rebound. Shengnong, a leading white-feathered chicken producer, reported net profit attributable to shareholders of 3.05 hundred million yuan for the third quarter, up 22.79% year on year, while its net profit excluding non-recurring items reached a quarterly high since 2021. Xiaoming Shares, a leading breeder of egg-laying chickens, reported net profit attributable to shareholders of 4227.44 ten thousand yuan for the third quarter, turning a year-on-year loss into a profit.
It is precisely through its parallel businesses in pigs and poultry that Wens has been able to hedge against cyclical fluctuations.
In the first three quarters, the company sold 2651.2 ten thousand head of pigs for meat, a year-on-year increase of 6.1%, but pig prices remained persistently low, resulting in substantial losses in the live pig farming business.
When the live pig business fell into a slump, profits from the company's poultry segment provided a floor. Although they were not enough to completely close the performance gap, they offset some of the losses from the live pig business and eased pressure on the company’s overall operations.
02. Losses have narrowed, but there is still one step to go before turning a profit.
Like Wen's, Tianbang Food reported a net loss attributable to shareholders of the parent company of 1.15 billion yuan for the third quarter alone, with the loss narrowing from 8.35 billion yuan in the second quarter.
But reducing losses is not the same as being “profitable”; the company’s cash flow is still bleeding.
With pig prices remaining low, Tianbang's commercial pig sales in the first three quarters reached 571.95 ten thousand head, up 23.34% year on year; revenue from commercial pig sales was 47.94 hundred million yuan, down 21.21% year on year. The company's net profit attributable to shareholders of the parent company in the first three quarters was a loss of 16.58 hundred million yuan, showing a clear pattern of “higher volume, lower profit.”
Tianbang commercial pigs (including piglets) in the first three quarters
Although quarterly losses at leading pig farming companies narrowed somewhat, market conditions showed no clear improvement, and slaughter volumes remained relatively high. In the first three quarters, China’s hog slaughter volume reached 53739 ten thousand head, an increase of 747 ten thousand head year on year, or 1.4%, with the industry’s overall slaughter volume continuing to rise.
Fortunately, capacity reduction accelerated significantly. At the end of the third quarter, the number of breeding sows in stock nationwide was 3602 ten thousand head, a year-on-year decrease of 433 ten thousand head. For the first time, it fell below the regulatory benchmark line, at 96% of the normal inventory level of 3750 ten thousand head.
The current increase in hogs marketed is the result of earlier capacity expansion. Changes in the breeding sow inventory take some time to feed through to the supply of market hogs. Although capacity reduction has already taken place, short-term pressure from hogs being marketed is unlikely to ease quickly.
Industry experts predict that the market will most likely remain range-bound near the bottom in the fourth quarter, with a weak rebound. A sustained strong rally is unlikely, and businesses will most likely incur small losses or break even.
The effects of this round of sow herd reduction are expected to gradually become apparent in the first half of 2027, and industry profitability is expected to recover. However, improvements in sow productivity, or farms pausing culling or even resuming restocking after a slight recovery in hog prices, could slow the pace of supply-demand improvement.
Losses are narrowing, but pig farming companies are still one step away from better times.