Pig prices hit a new low, Muyuan Foods increases revenue but not profit

(Source: Beijing Business Daily)

Against the backdrop of hog prices hitting a new low and the industry as a whole seeing only thin profits, China’s leading hog-breeding company Muyuan Co., Ltd. has experienced revenue growth without profit growth. Recently, Muyuan Co., Ltd. released its 2025 annual report. In 2025, the company recorded operating revenue of 144.145 billion yuan, up 4.49%; and attributable net profit of 15.487 billion yuan, down 13.39% year over year.

In more detail, in 2025, Muyuan sold 77.981 million head of market hogs and slaughtered 28.663 million head of hogs, and sold about 3.23 million tons of pork products such as fresh and frozen meat. Revenue from the slaughtering and meat business was 45.228 billion yuan, up 86.32%, increasing its share of total company revenue to 31.4%, and in 2025 it also achieved profitability for the first time. Meanwhile, the company’s full-cycle breeding cost for 2025 averaged about 12 yuan per kilogram, about 2 yuan per kilogram lower than the same period last year.

Although the slaughtering business achieved profitability for the first time and cost control also showed results, the decline in hog prices is still dragging down overall profit performance. Muyuan Co., Ltd. said in its annual report that the core reason for the decline in net profit in 2025 was the drop in hog prices. Based on monitoring data from the Ministry of Agriculture and Rural Affairs, the nationwide average live hog price for 2025 fell to 14.44 yuan per kilogram, down 9.2% year over year, and the full-year price hit the lowest level since 2019. According to calculations, the average profit per head of hogs ready for slaughter in 2025 was 31 yuan, which was 183 yuan less than in 2024.

Entering 2026, hog prices are still continuing to search for a bottom. According to data from China Hog Farming Network, since the latter half of February, hog prices have been steadily trending downward, and by March 29 the national ex-farm average price for “outer three yuan” hogs had dropped to 10.1 yuan per kilogram. In addition, according to the Ministry of Agriculture and Rural Affairs’ latest monitoring data, during the third week of March, hog prices in all 30 monitored provinces across the country fell, with the average hog price at 11.05 yuan per kilogram, down 28% year over year, hitting a new low since June 2018.

Judging from the sales data for the first two months of this year, the operating pressure on Muyuan Co., Ltd. still remains. In January, the average sales price of the company’s market hogs was 12.57 yuan per kilogram, down 16.92% year over year, with sales revenue of 10.566 billion yuan, down 11.93% year over year. In February, the company’s average sales price for market hogs further fell to 11.59 yuan per kilogram, with the year-over-year decline widening to 18.72%; and monthly sales revenue was 6.405 billion yuan, down 23.98%.

In the face of persistently weak hog prices, the company is trying to respond to the bottom of the cycle through further cost reduction. At a recent earnings communication meeting, Muyuan’s Chief Financial Officer, Gao Tong, proposed that, considering that feed raw material prices may rise slightly, the company’s 2026 cost target is to bring the full-year average cost down to below 11.5 yuan/kg.

In addition, Muyuan also stated that, under the current market environment, the company will adopt a more prudent operating strategy, prioritizing cash-flow safety and sustainable operations. This year, capital expenditures are expected to be around 10 billion yuan. Compared with last year, the company’s capital expenditure plan on the slaughtering end has increased; it will raise its self-slaughter ratio. Through coordinated management between the breeding end and the slaughtering end, it will pursue full value management to create room for value gains.

Zhu Danpeng, an analyst at China Food Industry, said that in 2025, China’s hog prices were generally at low levels and for a prolonged period. On the one hand, this is related to an increase in the number of hogs kept nationwide; on the other hand, it is also affected by slower consumption and lower digestion in the catering sector. Entering 2026, it is expected that the industry will strengthen macro-level control over inventory levels. Against this backdrop, the low-price cycle for hogs is expected to gradually narrow in the second and third quarters. By the third quarter, hog prices nationwide may see a modest rebound, but the overall increase is expected to be limited—this is also a normal reflection of the industry cycle.

In the view of Jiang Han, a senior research fellow at PanGuzhi Think Tank, extreme cost control is the core survival rule for navigating the cycle. Against the backdrop of hog prices falling to historic lows, enterprises must keep full-cycle costs below the industry average line. At the same time, facing the long grind-bottom period of the hog cycle, enterprises should leverage their financial resilience to eliminate inefficient capacity in an orderly way, optimize inventory structure, and also increase R&D investment in high value-added products, using product differentiation to escape homogeneous price wars. In addition, enterprises should fully use financial derivatives such as futures to lock in forward profits and avoid risks from severe volatility in spot prices. They should also actively expand the slaughtering and food processing segments, reducing dependence on a single breeding link through integration of multiple business models.

Regarding questions related to the company’s 2025 performance, a reporter from Beijing Business Daily sent an interview letter to Muyuan Co., Ltd., but as of the time of publication, no response had been received.

Beijing Business Daily reporter Tao Feng Wang Yuetong