Pork prices “break 4 and enter 3,” and pork companies’ third-quarter reports paint a less-than-ideal picture. On 11 month 9, the national average price for live pigs (three-way crossbred) was 8.63 yuan per kilogram, setting a new low for nearly 10 years. The lowest reported prices for live pigs in Guizhou, Hubei, Shaanxi, and Xinjiang had fallen below 4 yuan per jin, with some areas entering the “3-yuan range.” With pork prices at rock bottom, 25 A-share pork companies posted combined attributable net losses of 244.73 billion yuan in the first three quarters, turning from profit to loss year on year. The three leading companies, Muyuan, Wens, and New Hope, posted combined losses of 168.48 billion yuan, and each turned to a year-on-year loss in the third quarter alone.
Several industry insiders told China Business News that the market may currently be too pessimistic about the state of live-pig supply. It takes time for a decline in the number of breeding sows to feed through to the number of finished pigs marketed. Only after 1 month next year will the earlier reduction in breeding sows gradually be reflected in fewer finished pigs coming to market. The actual supply pressure ahead is likely not as great as the market fears now. The longer pork prices remain at the bottom, the more fully production capacity will be cleared, so people should be more patient about a turning point in pork prices in the second half of next year or even further into the future.
△ 25 A-share pork companies posted combined attributable net losses of 244.73 billion yuan in the first three quarters. (File photo; image provided by CNSPHOTO)
01 Losing more does not mean being the first to run out of cash
According to incomplete statistics, the combined net profit attributable to shareholders of the parent companies of 25 A-share listed pig farming companies was a loss of 244.73 billion yuan in the first three quarters, turning from profit to loss year on year. Three leading companies—Muyuan Foods, Wens Foodstuff, and New Hope—recorded combined losses of 168.48 billion yuan, with each posting a year-on-year loss in the third quarter alone.
When introducing the company's operating performance, Qin Jun, board secretary of Muyuan Foods, and others said that the company's net profit attributable to shareholders of the parent company was a loss of 93.19 billion yuan in the first three quarters, while net cash flow from operating activities remained positive at 29.83 billion yuan during the same period. In 9, the full cost of pig farming fell to slightly below 11.5 yuan/kg, while the current cash cost is around 10 yuan/kg. “Thanks to its relatively low cash costs, the company generated positive operating cash flow in the first three quarters.”
Wens Foodstuff recorded a loss of 49.61 billion yuan in net profit attributable to shareholders of the parent company in the first three quarters, including a loss of about 6 billion yuan in the third quarter alone. Its pig business lost about 9 billion yuan, while its poultry business earned about 6.5 billion yuan. Wens Foodstuff said that the industry suffered deep losses in the first three quarters of this year. The company fully leveraged the hedging advantage of its two core businesses, pigs and poultry, to generate relatively stable cash flow. While the industry broadly incurred heavy losses, the company managed to limit its losses and is confident and capable of successfully weathering this downturn in the cycle.
It is worth noting that Wen's Foodstuff Group's net cash from operating activities shifted from a net inflow in the first three quarters of the previous year to a negative 0.49 billion yuan, while non-current liabilities due within one year increased to 101.31 billion yuan.
New Hope had the smallest loss of the three, with a loss in net profit attributable to the parent company of 25.68 billion yuan in the first three quarters. In its financial report, the company attributed the loss to losses in its pig farming business caused by falling hog sale prices. Unlike the other two companies, New Hope's feed business provided a hedge during the same period. A relevant New Hope official said that the feed business made a significant contribution to profit growth in the first three quarters.
Nearly half of New Hope's loss came from an accounting provision: the company recognized an impairment loss of 12.43 billion yuan on live pigs that had not yet been shipped for slaughter, 12.28 billion yuan more than in the same period last year. New Hope said the provision was based on its assessment of future hog prices. Simply put, the company expected that the proceeds from selling this batch of pigs when they were shipped for slaughter would not cover the cost of raising them, so it recognized the shortfall in the current-period financial statements in advance. This provision involved no cash outflow but directly reduced current-period profit. In addition, the 26 billion yuan raised by New Hope through a private placement was received in month 9, and short-term borrowings decreased by 42 billion yuan compared with the beginning of the year. Its asset-liability ratio was the highest among the three companies, at approximately 69.7% at the end of the third quarter.
02 Fewer sows, but no less pork
At the end of the third quarter, the national breeding sow inventory stood at 3602 ten thousand head, down 10.7% year on year. This was 96% of the normal inventory level of 3750 ten thousand head, falling below the regulatory benchmark for the first time. Based on past cycles, when sow numbers have fallen to this extent, supply should contract. However, national pork production in the first three quarters was 4508 ten thousand tonnes, up 3.2% year on year, while the number of pigs marketed rose by only 1.4% year on year. Production growth outpaced the growth in the number of pigs marketed.
An analyst at commodity research firm Zhuochuang Information said that, first, production efficiency per sow has improved compared with the past. Previously, 1 sows could raise about 17 piglets a year; now, on average, they can raise 27.5, while sows at well-managed pig farms can raise more than 30 piglets. Although the number of sows has fallen, output per sow has increased, offsetting much of the supply-contraction effect. Second, a relatively large number of piglets were born after the Spring Festival in 2026. These pigs reached market weight in 9 and 10. Hog prices had not risen before the Mid-Autumn Festival, so many farmers held back their pigs in anticipation of higher prices. As a result, pigs that were due to be sold in 9 were held over until 10. When the weather turned cold, pigs gained weight quickly, increasing the number ready for market. Overall, short-term supply pressure in the hog market was considerable, and hog prices fell.
In addition, according to monitoring by Zhuochuang Information, slaughtering companies’ fresh white-strip pork sales in 10 were 9.74% lower than in 9 and 11.45% lower than in the same period last year. Warmer-than-usual weather, seasonally weak consumption, and increased releases of frozen products all weighed on fresh pork sales.
In addition, an analyst at Shanghai Steel Union’s Myagric.com, a commodity research firm, said that the decline in the breeding sow inventory has yet to be reflected in the market because fewer fattened pigs are being marketed, and there is a clear transmission lag. The fattened pigs currently being marketed correspond to the breeding sow inventory from about 10 months earlier, while the reduction in supply resulting from the concentrated culling of sows in the third quarter of 2026 will gradually materialize only after the middle of 2027.
Wens Foodstuff Group believes that in the fourth quarter, hog prices failed to rebound as expected and instead repeatedly hit new lows. This will accelerate the exit of companies facing greater capital pressure, and capacity clearance may be more thorough than previously expected.
03 Cost reduction: “Every fraction counts”
Among the 16 listed hog companies that have disclosed cost data for 2026 year 9 month, the average total cost was 6.1 yuan per jin, with 8 already in the 5 yuan-per-jin range. Muyuan Foods’ hog farming cost in 9 month had fallen to slightly below 11.5 yuan per kilogram, with a medium- to long-term target of under 5 yuan per jin; Wens Foodstuff Group’s comprehensive cost for market hogs in 9 month had fallen to 5.8 yuan per jin.
Wens Foodstuff Group President Li Shaosong said that, in terms of cost reduction, improvements in breeding efficiency contributed 0.2 yuan per jin; improvements in the marketable rate, feed-to-meat ratio, and medication costs contributed 0.4 yuan per jin; and business model iteration and digitalization contributed 0.25 yuan per jin, while centralized procurement, lean management, and other measures contributed 0.15 yuan per jin. “This is not simply the result of relying on any one area, but of efforts across multiple areas.” Muyuan Foods, meanwhile, is focusing its next phase of cost reduction on breeding stock genetics, nutrition research and development, digital and intelligent applications, and organizational management. The company’s management said in a discussion, “The investments being made today in production and management will gradually be reflected in improved production metrics and lower costs in the future.”
For businesses, cash flow security takes priority over expansion. Muyuan Foods stated that its current top priority is to “ensure safe and stable cash flow.” At the end of the third quarter, its monetary funds balance was 228.88 hundred million yuan, and its debt-to-asset ratio was 55.89%. It also proactively adjusted its short- and long-term debt structure, “reviewing short- and long-term liabilities to reduce operating risks.” New Hope, meanwhile, completed a private placement of 26 hundred million yuan, reducing its short-term borrowings by 42 hundred million yuan from the beginning of the year. Its debt-to-asset ratio fell to 69.71% at the end of the third quarter, making it one of the few listed pig farming companies to reduce debt in Q3.
China Galaxy Securities concluded in a research report that pig farming “has entered a stage of competition in refined management.” Huayuan Securities put it more directly: 2026 was a pivotal year for the agricultural sector’s “survival of the fittest” dynamic to play out; technological advances are reshaping the cost curve, while capital withdrawal is accelerating industry consolidation. 5 yuan per jin is shifting from a benchmark set by a few outstanding farms to a basic threshold for large-scale farming to enter its next stage. For businesses, competition in the expansion era is about capital strength and growth in market hog shipments; during the trough period, it is about production efficiency and the cost floor.