Behind the Bottoming of Pig Prices: The Entire Industry Chain Is Expected to Be Reshaped

How does supply and demand imbalance drive the full-chain upgrade of the pig farming industry?

China Economic Journal Reporter Jiang Zheng Beijing Report

Fluctuations in supply and demand have led to continuous declines in China’s pig prices, sparking widespread discussion within and outside the industry. Data shows that as of the end of March, the average price of external three-way crossbred pigs nationwide was about 9.4 yuan/kg, a 30% year-on-year decrease, down 20% from the beginning of the year. Several industry insiders told China Business Journal that, based on the national average, the current total cost of pig farming remains around 13 yuan/kg. Calculated at a slaughter weight of 125 kg, this means an average loss of about 450 yuan per head.

朱增勇, researcher at the Beijing Institute of Animal Science and Veterinary Medicine, Chinese Academy of Agricultural Sciences, believes that the current pig prices are driven downward mainly by strong supply and weak demand. From the demand side, pork consumption after the New Year quickly enters the slowest season of the year, with a significant seasonal demand weakness. From the supply side, pig supply is abundant in the first quarter of 2026. Considering the number of breeding sows and demand changes, pig prices are expected to gradually recover from the lows, but the probability of a turning point is small.

Meanwhile, the low pig prices have caused fluctuations in demand in industries such as feed and slaughter. The entire industry chain upstream and downstream are all adapting to this industry adjustment.

Pig Price Decline Triggers Industry Losses

Currently, pig prices have fallen below 5 yuan. Data from Dongfang Aige shows that, as of the end of March, the average price of external three-way crossbred pigs nationwide was about 9.4 yuan/kg, a 30% year-on-year decrease, down 20% from the beginning of the year.

According to a report by Yongyi Consulting, this has hit a seven-year low since 2019 and also broke the near ten-year low of 9.92 yuan/kg in Q2 2018.

More importantly, this price can no longer cover the costs of farming. Muyuan Foods (002714.SZ) estimates that the total cost of pig farming for 2025 will be about 12 yuan per 0.5 kg; Wen’s Co., Ltd. (300498.SZ) reports a comprehensive cost of 12.2–12.4 yuan/kg for pork pigs (for the first 11 months of 2025); New Hope (000876.SZ) reports that the total cost of normal operational fat pigs at the end of December 2025 is about 12.2 yuan/kg.

Xu Hongzhi, senior analyst at Dongfang Aige Beijing, told the reporter that the current total cost of pig farming is still around 13 yuan/kg, and with a slaughter weight of 125 kg, this means an average loss of about 450 yuan per head.

Taking Muyuan as an example, the company’s net profits from Q1 to Q4 2025 were 4.49B yuan, 6.04B yuan, 4.25B yuan, and 708 million yuan, respectively. The net profit attributable to the parent in Q4 decreased by 90.43% year-on-year.

Many pig enterprises have already entered a loss cycle in 2025. Bright Food’s 2025 financial report shows a net loss of 132 million yuan, mainly due to the drag from the pig farming segment.

The core factor behind the fluctuations in pig prices is the change in supply and demand. Zhu Zengyong told the reporter that the current pig prices are driven downward mainly by strong supply and weak demand. From the demand side, pork consumption after the New Year quickly enters the slowest season of the year, with a significant seasonal demand weakness. From the supply side, in the first half of 2025, the nationwide breeding sow inventory remained relatively high, and with the steady increase in piglets per breeding sow, pig supply in Q1 2026 is expected to be abundant.

“The pig farming industry has maintained profitability from May 2024 to Q3 2025, and the longer profit period has enhanced the resilience of breeding entities, while also weakening their risk awareness. Due to the steady increase in the scale and concentration of China’s pig industry, the increase in pig supply is mainly concentrated among leading and mid-tier companies,” Zhu Zengyong said.

Xu Hongzhi also mentioned that the rapid increase in scale has made large-scale enterprises the main suppliers, which are more resilient to losses compared to small and medium-sized farms, leading to slow capacity reduction; at the same time, breeding sow productivity and piglet and fat pig survival rates have improved dramatically. The same number of breeding sows can now produce far more commercial pigs than five years ago, significantly weakening the effects of capacity reduction.

Regarding the future trend of pig prices, Xu Hongzhi predicts that prices have basically bottomed out, but due to slow capacity reduction, supply pressure will be difficult to alleviate in the short term. In the coming months, pig prices are expected to fluctuate within a range of 9–13 yuan/kg. In the second half of the year, prices may return near the breakeven point, but it is unlikely to sustain an upward trend and may fall back again.

Industry “Creative” Capacity Reduction

In fact, the industry is planning capacity reduction measures. Statistics from China Pig Industry magazine show that 18 listed pig companies will have a total of 12.46M pigs slaughtered in February 2026, down 22% month-on-month and 4.8% year-on-year. Hu’an Securities research report pointed out that in early March, the Ministry of Agriculture and Rural Affairs convened seven large pig breeding companies, proposing to reduce the breeding sow inventory target to around 36.5 million, about 7.9% lower than the current level. Zhu Zengyong provided data indicating that by the end of 2025, China’s breeding sow inventory will be 39.61 million, higher than the normal holding level of 39 million.

“Large-scale companies with significant reductions in breeding sows include Muyuan, which has cut over 10%. Others mostly reduced by 5–7%,” Xu Hongzhi said.

Muyuan’s chairman Qin Yinglin publicly stated that, from the peak of 3.62 million breeding sows in January–February 2025 to 3.13 million in January this year, the company has reduced nearly 500k sows.

It is noteworthy that many industry insiders believe that China’s breeding sow green space should continue to be adjusted downward. As early as 2021, the Ministry of Agriculture and Rural Affairs issued the “Implementation Plan for Pig Capacity Regulation (Interim)”, setting targets for breeding sow inventory control. Later, in 2024, the national normal breeding sow inventory target was adjusted from 41 million to 39 million, and the lower limit of normal fluctuations (green zone) was adjusted from 95% to 92% of the normal inventory.

“Currently, the effective piglets produced per breeding sow per year are steadily increasing by about 0.7, and the improvement in production efficiency has significantly expanded pig supply,” Zhu Zengyong said.

Xu Hongzhi believes that a total inventory of 40 million breeding sows could produce 800 million fat pigs, far exceeding current slaughter volumes. The green space for breeding sows should be lowered to around 35 million.

Regarding expansion, many pig companies are choosing to suspend or terminate projects. According to incomplete statistics from China Business Journal, in 2025, several listed companies such as Tianbang Food (002124.SZ), Tangrenshen (002567.SZ), Yisheng Co., Ltd. (002458.SZ), and Xinwufeng (600975.SZ) have terminated fundraising projects, using the funds to temporarily or permanently supplement working capital. Most of these projects were related to expansion.

Additionally, Wen’s Co. has chosen to cut off from the piglet stage. According to the company’s disclosures, it plans to supply 5 million fresh piglets and roasted pig products annually to the market, aiming to reduce slaughter weight and avoid overstocking, thereby alleviating capacity surplus. Xu Hongzhi said that reducing breeding sow inventory is the most direct capacity regulation method. Other measures include raising entry thresholds for pig farms and reducing supply through environmental protection measures.

Zhu Zengyong also mentioned that capacity can be reduced by lowering slaughter weight and decreasing secondary fattening, with the core goal of easing supply-side pressure and promoting supply-demand balance.

Full-Chain Pig Farming Will Continue to Innovate

In the entire pig farming chain, the breeding segment accounts for most of the operating profit. During periods of low pig prices, the entire industry undergoes significant changes.

A notable change is that pig companies are increasingly integrating with upstream and downstream enterprises. On one hand, pig companies are paying more attention to upstream breeding, with shifts in breeding directions. In 2025, China National Agricultural Means of Production Co., Ltd. (CNAM) and Genus plc formed a joint venture to strengthen local operations, breeding, and disease control; Xinwufeng partnered with France’s Cobb-Vantress to establish a breeding farm, accelerating localization; Muyuan’s breeding focus has shifted from improving efficiency to enhancing meat quality. “Consumer demand is the breeding direction for Muyuan. The company’s focus is on breeding for better taste,” Qin Yinglin said.

On the other hand, the feed sector is also affected by fluctuations at the breeding end. CICC research reports that the domestic feed industry’s growth has slowed, entering a stock competition phase, with declining gross margins.

Zhu Zengyong said that from the feed side, rising prices of raw materials like soybean meal and corn increase farming costs, which may suppress some demand for feed. Xu Hongzhi believes that in the long term, large-scale capacity reduction in pig production is highly likely, which will lead to a significant shrinkage in demand for upstream industries like feed and animal health, triggering a major industry reshuffle.

The reporter noted that pig companies are forming closer collaborations with feed companies. In 2025, Wen’s invested in and reached a strategic partnership with Anyou Group, aiming to create a strong synergy in feed production and animal nutrition.

宋向清, Vice President of the China Business Economics Society, told the reporter that breakthroughs in breeding technology, production-sales synergy, large-scale expansion, and green transformation are reshaping the industry ecosystem. To achieve the transition from a “big pig-raising country” to a “strong pig-raising nation,” continuous efforts are needed in technological independence, protecting small farmers, and regional balance.

However, at present, the continuous decline in pig prices and the phased imbalance of supply and demand are causing clear differentiation in the impact on the upstream and downstream of the industry chain. Zhu Zengyong said that from the slaughtering and processing side, increased slaughter volume reduces slaughter costs, but due to weak terminal consumption, storage pressure and financial risks continue to accumulate; from the sales side, the decline in pig and pork prices will not be proportional, and increased sales volume may benefit the terminal due to lower upstream procurement costs and higher sales.

In fact, China’s pig industry chain has already turned its eyes overseas. CICC research reports that in the feed sector, overseas feed industry concentration is low and lacks leading companies. The Asia-Africa-Latin America regions have nearly 500 million tons of export space, with poultry feed being the largest export category, and aquatic feed growing rapidly.

Pig companies are also exporting related technologies abroad. At the end of January, Wen’s signed a strategic cooperation agreement with South Korea’s large integrated food company Harim Group, to deepen cooperation in smart farming, environmental protection, and digitalization. Muyuan has also begun large-scale recruitment to expand overseas markets, mainly exporting technology and management.

“Domestic market saturation will accelerate the industry’s ‘going global’ pace. In the future, China might shift from being a pork importer to an exporter,” Xu Hongzhi said.