National pig prices are still hitting new lows. On 11 month 12, the average price of pigs of the three-way crossbreed fell to 8.54 yuan/kilogram, below this year’s low in 4 month. Mainstream quotes have broadly retreated to the “eight-yuan range,” while Guizhou is among the country’s lowest-priced regions. The industry is asking: with capacity reduction ongoing, why have pig prices still not bottomed out? Could a turnaround come in 2027?

 

 

Four pressures remain on the supply side

 

First, the piglet market is sluggish, and producers are more willing to reduce capacity. More sows are being culled at low prices, which instead adds to market supply in the short term. Second, slaughter weights remain high. Last week, the average slaughter weight at sampled pig companies was 124.71 kilograms. The combination of more pigs and higher weights has increased pork supply. Third, large-scale pig companies have relatively high slaughter plans. Above-scale pig companies plan to slaughter 1519.67 ten thousand pigs this month, while their completion rate last month was 98.25%. Some capacity has been carried over into this month, increasing the pressure on daily slaughter volumes. Fourth, frozen pork inventories remain high. Last week, the frozen pork storage-capacity utilization rate was 31.6%. Frozen pork shipments are taking up space for fresh products, and slaughterhouses are also reluctant to operate at high rates.

 

More troublingly, the industry is caught in a cycle of “the more it loses, the more it sustains.” The total liabilities of 23 listed pork companies have exceeded 4000 billion yuan. Most are choosing to hold on, prolonging the capacity exit process. The market generally believes that a genuine trend reversal may gradually take hold around the second quarter of 2027.

 

How do the three leading companies view 2027?

 

Muyuan Foods takes a relatively positive view: the industry’s profitability in 2027 is highly likely to be better than in 2026. The company has proactively reduced its base sow herd, from a peak of 362 ten thousand head in 1 last year to 297 ten thousand head in 9 this year. Its reasoning is that industry-wide losses will prompt voluntary capacity exits, and the effect of reduced supply will gradually become evident in 2027, though the specific timing and scale of price increases are difficult to predict accurately.

 

Wens Foodstuff believes that, as hog prices failed to rebound as expected in the fourth quarter this year and instead repeatedly tested new lows, financially strained companies will be driven out more quickly. Capacity exits may therefore be more thorough, and hog prices next year may perform better than previously expected.

 

New Hope is more neutral and cautious: the effects of the reduction in breeding sows take time to feed through, so do not have overly high expectations for hog prices in the first half of 2027; the market will most likely be “lower early and higher later,” and a major bull market is unlikely to be repeated. The industry should also track involuntary production capacity cuts, consumption, and frozen pork releases.

 

Expert: 2027 is more likely to see narrow-range fluctuations

 

Zhu Zengyong, Chief Analyst for the Pork Industry Chain at the Ministry of Agriculture and Rural Affairs, believes that the previous hog cycle, which began in 2022 year 4 month, had essentially run its course by 2026 year 4 month. It is unlikely that current hog prices will fall below this year’s 4 month low, but the market still needs to find a bottom. He cautioned that international institutions’ claim that a “new hog cycle will begin in 2027” lacks reliable data to support it. 2027 is more likely to see narrow-range fluctuations, and a recovery will take time.

 

In short: Hog prices are more likely to fall than rise in the short term, and the process of clearing excess production capacity is still underway. The outlook for 2027 leans toward improvement, but do not expect a “reversal” to come too soon or too sharply.