The country continues to carry out the central frozen pork reserve collection, and the pork concept continues to strengthen.

How does AI · national reserve procurement affect the current oversupply situation in pig production?

On April 2, the pork concept continued to strengthen, with Huasheng Biologicals up more than 10%, and Huatuo Shares, Tengkang Biology, Dayu Biology, Lihua Shares, Sanong Group, Muyuan Shares, Juxing Agriculture and Animal Husbandry, Aonong Biology, Wen’s Shares, and others also rising.

According to Securities Times, the National Development and Reform Commission, the Ministry of Commerce, and the Ministry of Finance will soon carry out the second batch of this year’s central frozen pork reserve reserve procurement and require all localities to synchronize their reserve procurement, so as to better play the role of reserves in regulation. Next, the National Development and Reform Commission and other departments will continue to closely monitor the dynamics of the hog market, increase the pace of reserve procurement, strengthen comprehensive capacity regulation, guide hog-raising enterprises and households to reasonably arrange production and business operations, and promote stable operation of the market.

According to Jiemian News, monitoring data from the Ministry of Agriculture and Rural Affairs show that in the 4th week of March, the nationwide average hog price had fallen to 10.68 yuan per kilogram, down 3.3% month-on-month and down 29.8% year-on-year, hitting a new low in nearly 8 years.

For a long time, the pig-to-corn ratio (the ratio of the ex-hog selling price to the wholesale corn price) has been the industry’s “barometer” for profits and losses. According to data from the Price Monitoring Center of the National Development and Reform Commission, in the 3rd week of March, the nationwide pig-to-corn ratio had already fallen to 4.40:1, the lowest since 2019, far below the first-level alert line of 5:1.

The core contradiction behind the continued decline in hog prices is a supply-demand mismatch caused by overcapacity.

At the end of 2025, the number of stock of breeding sows nationwide was 39.61 million head, falling to 39.58 million head in January 2026. Although this year’s figure has declined, it is still higher than the normal on-hand upper limit of 39 million head set by the Ministry of Agriculture and Rural Affairs.

On the demand side, the share of pork consumption has continued to edge down. The proportion of pork in meat consumption decreased from 62.1% in 2018 to 57.9% in 2025.

Looking ahead to the subsequent trend of hog prices, Dongxing Securities, in a research report, analyzed that the short-term trend of oversupply in the hog breeding industry will continue. It is expected that in the first half of 2026, hog prices will still face pressure, but as the effects of capacity reduction gradually become evident, supply pressure in the second half of 2026 will ease somewhat.

Shanxi Securities said that while the hog industry may face pressure in the first half of the year, it is also a favorable time window for capacity reduction. This year, there may be the third round of notably significant capacity reduction since 2021. The fundamentals and valuations of the hog breeding industry are expected to recover.

Guosen Securities said that by the end of March, the ex-farm prices of lean-type meat pigs nationwide had fallen to below 10 yuan/kg, and losses deepened. After the market’s stocks experienced a rebound, they saw a sharp pullback, and participation remains low. We expect that participants with relatively high costs will face pressure to reduce positions over a relatively long period. Changes in sow capacity data will continue to act as a catalyst. Investors are advised to pay attention to allocation opportunities during the loss phase. Current valuations are still at a relatively low level. Focus on allocation opportunities for low-cost pig companies, including Dake Nongmu, Wen’s Shares, Muyuan Shares, Lihua Shares, Juxing Agriculture and Animal Husbandry, Tengkang Biology, Zhengbang Technology, and others.