Recently, both live hog futures and spot prices have weakened. The most active live hog futures contract closed at a record low on Tuesday, and discussion of a turning point in the hog cycle has continued to heat up. Several industry insiders believe that hog prices may fluctuate at low levels in the short term, but signs of ongoing capacity reduction have emerged. With the year-end curing and preserved-meat consumption season approaching, hog prices are entering a bottoming phase, and the “dawn” of the cycle is beginning to appear.
On 11 month 3 day, the live hog futures main contract closed at 9150 yuan/ton, down 4.09% for the day. The live hog spot market also remained under pressure. Data from Zhuo Chuang Information’s sample points showed that the average daily live hog price in mainstream markets was 4.47 yuan/jin, with prices gradually approaching this year’s historical low in 4 month. Ample market supply has become the key factor weighing on current hog prices.
According to an analysis by Kong Hailan, a hog analyst at Everbright Futures, official data show that at the end of the third quarter of 2026, the national hog inventory stood at 42533 ten thousand head, down 2.6% year on year. Of this total, the breeding sow inventory was 3602 ten thousand head, down 4.7% quarter on quarter and 10.7% year on year, equivalent to 96% of the normal reserve level. Since 2025 year 10 month, China’s breeding sow inventory has been on a sustained downward trend, with the pace of reduction accelerating significantly. Based on the hog growth cycle, this decline in the sow inventory corresponds to a gradual reduction in hog supplies for slaughter starting in 2026 year 8 month.
Judy Zhu, a hog analyst at GF Futures, said that overall production capacity regulation was relatively moderate in 2025, while the rate of reduction in the breeding sow population accelerated significantly in 2026. At the end of the third quarter, the number of breeding sows in stock was down by about 9% from 12 of the previous year, with data confirming a contraction in underlying production capacity.
Although breeding efficiency across the industry continues to improve, with MSY (marketed pigs per sow per year) and PSY (weaned piglets provided per sow per year) rising and output per sow increasing, the additional output from these efficiency gains is not yet enough to offset the shortfall caused by the decline in the sow population. The overall direction of industry capacity remains contraction.
“There is a transmission lag of about 10 months before capacity reduction takes effect.” Judy said that the current supply of live hogs in the market corresponds to the relatively high sow inventory from late last year to early this year. In 1 of next year, the effects of the earlier reduction in sow numbers will gradually be reflected in hogs shipped to market, and subsequent actual supply pressure may be lower than the market’s current pessimistic expectations. In the short term, live hog shipments remain relatively high and supply pressure has not yet fully eased, but the trend is optimistic.
The prolonged period of losses continues to put cash flow for livestock farmers to the test. According to data from SunSirs, since the piglet-fattening model began making losses at the end of 2025 7, the farrow-to-finish model also entered the loss range in mid-9 of the same year. As of 2026 11 2, raising one pig under the farrow-to-finish model resulted in a loss of 359 yuan, while fattening one piglet resulted in a loss of 281 yuan. The industry has been in a loss-making period for 14 months, setting a new record.
Kong Hailan’s analysis suggests that, amid an exceptionally long period of losses, financial pressure is mounting for all types of livestock producers, and the likelihood of involuntary capacity reduction across the industry continues to rise. In the long term, this is positive for hog prices. Zhu Di also noted that losses in the livestock sector are deepening, while tighter capacity-control policies are likely to keep the number of breeding sows on a downward trend, gradually reducing pork supply in the longer term.
Looking ahead, Judy said that at this stage, farmers are highly motivated to bring livestock to market, have little inclination to hold back sales, and continue to release their inventory burden. Disease risks will require close attention in the fourth quarter. Consumption is weak in 10 month. From the end of 11 month through 12 month, demand for pork for curing and preserving will begin, and the increase in consumption will support pig prices.
Kong Hailan believes seasonal consumption benefits are approaching. In line with pork consumption patterns, pork consumption gradually recovers as temperatures fall. At the end of the year, the peak season for stocking up for curing and sausage-making will arrive, and seasonal demand is expected to support pork prices. In the short term, live pig prices are running at low levels, but as production capacity continues to be reduced in the coming period, live pig prices may see a cyclical reversal once supply pressure eases.
A relevant official of Leshan Giantstar Farming & Husbandry Corporation Limited stated at the third-quarter earnings briefing that the hog industry’s cyclical bottoming-out has entered a deep stage. Under the combined effects of the firm implementation of capacity regulation policies and the effective influence of market adjustment mechanisms, existing capacity has been significantly optimized, future supply will be effectively controlled, and the restructuring of market supply and demand is creating the necessary conditions for hog prices to rebound to a reasonable level.