Pig prices hit an 8-year low! Four charts analyze when this pig cycle will end.

（Source: The Paper-Official Account）

On April 2, the Ministry of Commerce, the National Development and Reform Commission, and the Ministry of Finance announced that they will carry out the 2026 second batch of purchases and storage of centrally reserved frozen pork.

Behind the “policy moves” is the harsh reality of pig prices continuing to “slide down.” Data monitored by the Ministry of Agriculture and Rural Affairs shows that in the 4th week of March, the national average price of hogs fell to 10.68 yuan per kilogram. This was down 3.3% month over month and down 29.8% year over year, hitting the lowest level in nearly 8 years. In some regions, the price of three-element (excluding feed) hogs has even dropped to as low as 5 yuan per jin.

There is a saying in the industry about a “hog cycle.” This is one of the most distinctive cyclical phenomena in China’s economy: every 3–4 years, it triggers a cycle of price upswings and downswings across the hog industry chain.

After this cycle began to retreat from the peak at the end of 2022, by April 2026 it has lasted 49 months, reaching the usual length of the cycle.

So, has the signal of a reversal come?

Capacity reduction has not met the target

To answer this question, first look at the key indicators that determine the direction of the hog cycle: the number of sows capable of giving birth. This indicator directly determines the future number of hogs marketed for slaughter.

In April 2024, the number of sows capable of giving birth reached a low point. After that, this figure remained at a low level. By the end of 2025, the number of sows capable of giving birth nationwide was 39.61 million head, but the latest set of regulatory targets by the Ministry of Agriculture and Rural Affairs has been lowered to 36.50 million head. This means the market believes capacity is still excessive and there is too much supply, so pork prices will continue to fall.

Based on the target, there is a gap of more than 3 million head. At the current rate of reduction, it would still take 3 years. If the goal is to be achieved this year, the pace of capacity elimination over the coming months must be accelerated.

It is worth noting that simply looking at sow numbers is no longer enough to reflect real supply, because industry production efficiency has changed. Data shows that the industry’s PSY (number of weaned piglets provided per sow per year) has risen from 17.38 in 2017 to 24.34 in 2025. With the same number of sows capable of giving birth, the increased output of piglets creates hidden capacity, further extending the capacity de-leveraging (elimination) period.

The “slow-motion” process of clearing capacity is the core issue that has lengthened this cycle.

Leading hog firms are still “holding on”

As pig prices keep falling, profit margins for hog farmers are being squeezed further and further.

In past hog cycles, the reason the market saw “sharp drops followed by rapid rebounds” was that the share of small-scale backyard growers in the market was large—they had weaker risk resilience. Once they fell into losses, they would quickly eliminate breeding sows and cut capacity, which drove a fast reversal in the market.

But today’s industry landscape is very different. Data shows that the domestically hog farming business scale (industrialization rate) has exceeded 70%. In 2025, the top 10 breeding enterprises’ slaughter output already exceeded 30%. Large enterprises, backed by advantages in capital, technology, and the industrial chain, have significantly stronger ability to withstand losses. Even amid ongoing industry losses, leading companies can maintain capacity, and may even expand capacity against the trend.

For example, Mengyuan Foods (Muyuan Co., Ltd.), a sector leader, has lowered its farming costs to below 12 yuan per kilogram and plans to reduce them further to 11.5 yuan per kilogram this year. In the current market where pig prices are 10 yuan per kilogram, leading companies would lose only slightly more than 1 yuan per pig. Meanwhile, small and medium-scale growers and backyard farmers, unable to lower costs, are more likely to be eliminated under market pressure. Because leading firms can “hold on” and are unwilling to exit, to some extent they slow the pace of industry capacity clearing.

Pork consumption share is declining

If it is difficult to de-leverage capacity on the supply side, the demand side is also changing—pork’s share of consumption is declining.

Relevant data shows that pork’s share of total meat consumption in China has fallen from 62.1% in 2018 to 57.9% in 2025. Annual per-capita consumption of other meats such as beef and lamb has increased to 10.05 kilograms.

This change is not a short-term fluctuation, but a long-term trend in consumer-structure transformation. On the one hand, residents’ incomes have improved and eating habits have become more diverse. On the other hand, supplies of substitutes such as poultry and beef/lamb have been increasing, and their prices are more competitive, which continuously diverts demand away from pork.

Changes on the consumption side have a profound impact on hog cycles. In the past, cycle reversals often relied on demand support during peak seasons. But now, the demand pull may not be as strong as before, meaning that for this cycle to reverse, the supply side likely needs an even greater contraction to achieve it.

Hog farming also needs to “push back against overcompetition”

Since last year, policies have clearly set “pushing back against overcompetition” as the direction, requiring leading hog farming companies to control capacity and local governments to implement reduction tasks. The 2026 Central Document No. 1 once again emphasized “strengthening comprehensive regulation and control of hog production capacity.” The 2026 Government Work Report proposes to intensively address “involution-style” competition and create a sound market ecosystem.

Judging from industry research reports, the predictability of overall capacity de-leveraging is increasing. Some institutions expect that a turning point in pig prices may occur in the second and third quarters this year, and the center of gravity for pig prices may gradually rise.

In addition, geopolitical risks such as worsening conflicts in the Middle East may cause sharp increases in feed raw material costs, including corn and soybeans. Entering March, multiple feed companies have already announced price increases. If feed costs accelerate upward, it is also not impossible for pig prices to show a turning point afterward.

Of course, to get out of this hog cycle, even more important still are three factors: whether the number of sows capable of giving birth is expected to decline, whether backward capacity will be eliminated and cleared, and whether regulatory policies will continue to intensify.

Original headline: “Pig prices hit a new low in 8 years! Four charts break down when we will get out of this hog cycle”

Column chief editor: You Junjie. Title image source: The Paper-Official Account title image

Source: Author: Liberation Daily, Cui Yilin

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