"Vegetables are more expensive than meat" spreads, and the pig cycle bottom accelerates downward.

[Global Network Consumer Comprehensive Report] “Pork prices are lower than ginger and garlic,” this is a real scene recently played out in the vegetable market.

Data from the Ministry of Agriculture and Rural Affairs and the Business Society show: in mid-March, the national average price of live pigs fell below 11.05 yuan per kilogram, hitting a new low since June 2018; some external three-way pigs even dropped to 9.8 yuan per kilogram. On one side are fresh vegetables costing five or six yuan per jin, on the other side are falling pork prices, and the pig breeding industry is experiencing the pain of the past few cycles.

Faced with pig prices entering the over-decline warning zone, the National Development and Reform Commission and the Ministry of Agriculture and Rural Affairs recently issued a “hard constraint”: reducing the nationwide breeding sow inventory to about 36.5 million, a decrease of 7.8%. However, under the pressure of large pig enterprises competing for funds and changing consumer structures, this bottoming-out cycle’s clearance battle is far more complex than imagined.

Pig EnterprisesFierce Battle for the "6 YuanPrice"

Why are pig prices continuing to decline? The most direct logic is that supply is increasing while demand is shrinking simultaneously.

Data shows that although the breeding sow inventory at the end of 2025 has decreased from its peak, it still exceeds a reasonable range of 39 million. More critically, the efficiency improvements of large-scale farms mean that even with fewer sows, actual pig supply remains high. In March, sample enterprises’ pig slaughter plans surged by 22.54% month-on-month, instantly amplifying short-term selling pressure.

Contrasted with abundant supply is weak terminal consumption. The post-Chinese New Year period is traditionally slow, and in recent years, the proportion of pork in meat consumption has dropped from 62.1% to 57.8%, with substitution effects from beef, mutton, and poultry continuing to divert demand. Downstream slaughterhouses are slow to move pork cuts, only able to “produce based on sales,” pushing prices down on upstream suppliers.

Since raising a pig costs a loss of two or three hundred yuan, why not simply exit? This relates to the dramatic changes in the industry ecosystem. From 2018 to 2025, the number of scattered pig farmers nationwide shrank by 38.2%. The remaining are mostly large enterprises with strong capital, who have invested heavily early on and hold a “perseverance” mentality, preferring to endure losses rather than easily reduce capacity, thus prolonging the bottom phase of this cycle.

When pig prices fall below 10 yuan per kilogram, cost control becomes the survival bottom line. According to recent financial disclosures for 2025, the three major pig companies’ revenues totaled 271.19B yuan, but their net profits overall declined by 28.20%. Behind profit divergence are competing business models.

Muyuan Foods, with its “full self-breeding and self-rearing” heavy-asset model, raked in a net profit of 15.81B yuan. Its confidence lies in extreme cost control—by the end of 2025, its breeding cost had fallen to 12 yuan per kilogram. In contrast, Wen’s Shares’ “company + farmers” light-asset model faces more profit pressure in extreme markets, but its costs have also been driven down to around 6 yuan per jin.

The industry pattern is being redefined by a number: 6 yuan per jin. According to New牧网 data, this is now the cost “dividing line” for listed pig companies. Companies that can keep costs at or below 6 yuan per jin are leveraging scale advantages to accelerate monopolization; those with costs above 6.5 yuan per jin can only struggle in the mid-small range. Unfortunately, with global commodity prices rising, soybean meal surging past 3000 yuan per ton, and freight costs climbing, this cost red line faces the risk of being pushed higher.

Dongfang IC

Farewell to Scale Expansion, Pig Industry Enters Efficiency Race

Faced with strict policy controls and performance erosion, leading companies’ strategies are no longer simply “cut production” or “expand,” but are shifting toward a dual approach of “reducing volume and improving quality.”

Domestically, companies like Muyuan are actively culling inefficient sows, reducing capital expenditure on breeding, and shifting funds toward downstream slaughtering. In 2025, Muyuan’s slaughter volume doubled year-on-year, with capacity utilization reaching 98.8%, achieving its first annual profit. This indicates that pig companies are trying to smooth out cycle fluctuations through extending the industry chain.

Meanwhile, seeking new growth points abroad and extending into high-value-added sectors like pet food have become a new consensus for hedging the risks of a single pig cycle. This adjustment essentially marks the end of China’s pig industry’s era of reckless growth and victory through scale expansion.

From a deeper industry trend perspective, China’s pig industry is undergoing a profound restructuring of its underlying logic. First, the “tangible hand” of capacity regulation and the “invisible hand” of market clearance are working together. Regulatory authorities establishing a filing system to enforce capacity control means the industry is finally bidding farewell to the chaotic expansion of the past. Capacity fluctuations will be limited within a narrower, more reasonable range, and the traditional “spider web model” of boom and bust will ease, benefiting leading companies with long-term, stable operations.

Second, the dimension of industry competition is fundamentally upgrading from “point competition” to “system efficiency competition.” In the past, pig companies could simply leverage debt and scale to reap profits. Now, under input-driven inflation pressures on feed raw materials, the core tests focus on invisible soft skills such as breeding quality, feed formulation optimization, precise health management, and intelligent farming. The cost threshold of 6 yuan per jin is essentially the ultimate test of a company’s systemic capabilities.

Finally, the profit center of the industry chain is shifting downward faster, with “breeding + slaughter + food” integration becoming a certain trend. As the attributes of the live pig cycle weaken, the ceiling of a business model relying solely on pig trading has become apparent. Extending to the downstream not only captures profits from slaughter but also allows the creation of chilled and frozen meat, deep-processed meat products, and even pet foods, directly reaching consumers and effectively hedging upstream cycle fluctuations, smoothing profit curves.

A chief analyst at a large brokerage’s agriculture division said that what appears to be the pain of the pig cycle bottom is actually a watershed for structural transformation in the industry. Previously, pig companies mainly relied on “leverage + scale” for rough cycle management, but with industry regulation shifting from soft guidance to hard constraints and feed costs facing input-driven inflation, “efficiency improvement + full industry chain extension” has become the core competitiveness for companies to survive the downturn. The next two quarters will be the industry’s darkest hour; companies that fail to control costs will face brutal淘汰, while those that can keep total costs firmly below 6 yuan per jin are likely to see significant valuation recovery and increased industry concentration in the next cycle. (Wen Xin)