The pig farming industry is currently experiencing losses that have lasted for more than a year, including a period of severe losses lasting 3~4 consecutive months, unprecedented in history. The industry is facing the rare situation of “record-high production and record-low prices.” Last year, national pork production reached a record high of 5938 million tonnes, and it grew by 3.2% year on year in the first three quarters of this year. However, the downturn in prices has exceeded most people’s expectations, and capacity pressures remain immense.
Wang Zuli, a researcher at the Institute of Agricultural Economics and Development of the Chinese Academy of Agricultural Sciences and a member of the Expert Advisory Committee on Monitoring and Early Warning for the Pig Industry of the Ministry of Agriculture and Rural Affairs, said that the restructuring of the current pig industry landscape has four notable features:
First, production continues to grow on the back of strong momentum: The industry is highly resilient, biosecurity standards are improving rapidly, and large-scale and corporate group businesses are better able to withstand risks. The current breeding sow inventory stands at 3602 million head. Although this is below the normal reserve level of 3750 million head, it is still not a low base. At the same time, industry productivity has increased significantly: PSY rose from fewer than 20 head in 2020 to more than 23 head in 2025, an average annual increase of about 3%. Together, these factors have driven successive record highs in pork production.
Second, consumption has peaked and stabilized: In 2025, apparent per capita pork consumption was 42.9 kilograms, essentially unchanged from the level in 2014. However, this consumption level was influenced to some extent by low prices. Changes in habits, including population aging, declining birth rates, more diverse meat consumption, and a preference for fast food and food delivery, have led household pork consumption to decline for three consecutive years. The structural weakening is evident, and the substitution effect of poultry is significant.
Third, market conditions remain sluggish: Hog-cycle fluctuations have shifted from strong to weak, with the price peaks in successive rounds of increases becoming progressively lower. The industry is caught in a deadlock of “difficulty in reducing capacity,” and many companies are toughing out the cycle.
Fourth, policy regulation has been strengthened: Since 2025, the government has stepped up comprehensive regulation of production capacity. The normal holding level for breeding sows has been gradually lowered from 2024's 3900 ten thousand head and adjusted dynamically. The regulation aims to curb disorderly expansion and ensure that production capacity remains within a reasonable range. Capacity regulation is expected to become more routine and targeted in the future.
At the end of the third quarter, the national inventory of breeding sows stood at 3602 ten thousand head, equivalent to 96.0% of the regulatory target of 3750 ten thousand head. After seeing this figure, some market participants concluded that capacity regulation had “accomplished its mission” and began to expect hog prices to rise sharply next year. However, Wang Zuli pointed out that, based on a comprehensive assessment of supply and demand fundamentals, the supply-contraction effect resulting from the decline in the current round of breeding-sow inventories is relatively limited. If the market collectively turns bullish on hog prices, or even increases production against the market trend, while hog slaughter volumes have yet to decline year on year and producers have yet to return to profitability, the supply-and-demand situation may not improve, and hog prices could remain depressed for a long time, adding to the difficulties faced by farms and producers. The industry must remain rational and avoid setting excessive expectations for future market conditions.
Entering the third quarter of 2026, hog prices fell markedly. Starting in 7 month, demand for live hogs in the general market declined significantly and remained at this level until the middle to latter part of the holiday period. In mid-8 month, with the start of the school term approaching and some businesses gradually resuming operations, concentrated pork procurement provided a certain boost to demand for live hogs. However, the continued seasonal low in consumption in 9 month was not enough to sustain an increase in hog prices. In addition, due to concentrated shipments by large-scale producers and the slow capacity reduction in the earlier period, the Mid-Autumn Festival and National Day holidays did not provide any meaningful support for live hog prices.
In 10 month, hog prices followed a “strong first, weak later” trend. At the beginning of the month, during the holiday period, live hog shipments eased somewhat, providing short-term support for prices. After the holiday, the seasonal low in consumption continued, demand for live hogs fell sharply, and oversupply persisted, causing hog prices to begin fluctuating downward. According to monitoring by SunSirs, on 23 10, the national average price of lean-type live hogs was 9.38 yuan/kg, down 0.85 yuan/kg, or 8.31%, from the average of 10.23 yuan/kg on 8, the first day after the holiday. In the fourth quarter, live hog supply is still ample and may follow a “rise-fall-rise” pattern.
In 10 month, large-scale hog farming companies still had relatively high planned live hog shipments. According to SunSirs statistics, in 10 month, large-scale and above-scale hog farming companies planned to ship 2212.29 ten thousand head, up 2.45% from the previous month. From 11 to 12 month, although demand for large hogs improved somewhat, large-scale producers may launch volume-push campaigns at year-end. The increase in supply may exceed the increase in demand, and the “oversupply” situation may continue.
Zhuochuang Information data show that although hog slaughter volume has increased since month 10, the increase gradually slowed later. As of 10 month 23, daily hog slaughter volume nationwide was 17.65 ten thousand head, down 2.81 ten thousand head, or 13.72%, from the daily slaughter volume of 20.46 ten thousand head on 23 of the previous month. Compared with the same period last year, it was down 1.79 ten thousand head, or 9.21%. From 11 to 12 month, temperatures will gradually fall, and curing activities will begin one after another in some regions. Hog demand may continue to show signs of rising, but the increase is likely to be limited. Meanwhile, although the frozen-product storage capacity utilization rate showed signs of falling in the third quarter of 2026, it remained high compared with previous years, and frozen-product inventories remain a potential source of supply pressure.
Wang Zuli analyzed that current market sentiment is weak, while the proportions of hogs held back for later sale and secondary fattening are low, which instead provides favorable support for the market outlook. Looking ahead, the market is likely to fluctuate weakly in the short term. With the peak consumption season approaching, hog prices have conditions for a modest rise before the Spring Festival, but the increase will be limited. A substantial improvement may not come until the second half of 2027. Zhuochuang Information expects hog prices in the fourth quarter to follow a “fall-rise-fall” trend. The average hog price may range between 9.8-10.1 yuan/kg, and reaching the cost line may remain difficult.
Wang Zuli cautioned that potential risks should be watched: both disease outbreaks and market consensus expectations could trigger abnormal market fluctuations. For example, if the market broadly expects prices to rise in the second half of 2027 and producers hold back hogs for sale in large numbers during the first half, this could easily lead to a supply-demand mismatch. Once the industry forms a one-sided, optimistic consensus that hog prices will rise, it could easily trigger the fallacy of composition and repeat the misjudgment of market conditions before the Mid-Autumn Festival and National Day holidays this year.
In the long run, fluctuations in the pig cycle will become increasingly flatter and more subdued, and the industry will fully enter an era of thin profit margins. “Cost is king” will become the core competitive strategy, and producers whose costs remain above the industry average over the long term will be gradually phased out.