According to Zhuhaoduo data monitoring, the national average price of live hogs of the three-way crossbreed on 11/5 was 8.94 yuan/kg, down 0.08 yuan/kg from the previous day. Across the country, the average price of three-way crossbreed live hogs in many areas has fallen below the 9 yuan threshold, breaking through a support level the market had previously been counting on. On one hand, persistent industry losses are forcing the breeding sow herd to shrink faster, and signs of a cyclical bottom are gradually emerging. On the other hand, supplies of market-ready hogs remain ample, peak-season consumption has fallen short of expectations, and the benefits of capacity contraction have yet to materialize. A classic case of “relief from afar cannot solve the immediate problem” is unfolding.
From the supply side, the number of breeding sows in stock is currently continuing to decline at an accelerating pace. Mysteel data show that in 10 month, the overall number of breeding sows in stock fell by 1.57% month on month (9 month: -0.86%), with a decline of 1.47% at large-scale pig farms (9 month: -0.80%) and 4.51% among small and medium-sized farms and independent producers (9 month: -2.47%). Amid persistent losses across the industry, capacity is being phased out significantly faster.
Next, let’s look at the commercial hog inventory, which determines short-term hog prices. Mysteel data show that in 10 month, the overall commercial hog inventory increased by 0.13% month on month (9 month: 0.17%), with an increase of 0.22% at large-scale pig farms (9 month: 0.16%) and a decrease of -2.05% among small and medium-sized farms and independent producers (9 month: 0.36%). These figures clearly show that production capacity continues to concentrate among leading producers, whose production efficiency is also steadily improving. PSY levels are rising, resulting in a situation where “fewer sows do not mean less pork,” further prolonging the bottoming-out period.
Another important bearish factor behind the ongoing decline in hog prices is weaker-than-expected demand. Although the market is gradually entering the window for stocking up for the curing season, slaughterhouse operating rates have edged up only slightly. The recovery in end-consumer demand remains limited, and the pace of white carcass sales is slow, making this a weak peak season. Slaughterhouses generally produce according to sales and have little inclination to build inventory proactively. They are clearly seeking lower purchase prices, making it difficult to create sustained upward momentum.
We would like to remind pig farmers not to become blindly bullish or hold back hogs for higher prices based solely on the positive effects of sow herd reduction. Industry organizations generally believe that hog prices will continue to fluctuate at low levels in the short term as the market searches for a bottom. Even if the peak season for cured meat brings a modest temporary rebound, the upside is likely to be limited and unlikely to reverse the trend outright. A genuine turning point in supply and demand will depend on the effects of earlier sow herd reduction gradually passing through to the number of fattened pigs brought to market.