Live pig prices drop to a rare low. Is it possible to enter pig farming now and profit regardless of whether pig prices rebound?

Ask AI · How does the weakening of the pig cycle affect the strategies of farmers?

CNR Beijing, April 7 (Reporter Lü Hongqiao) According to the Central Radio and Television Station’s “Global New Financial News,” currently, the nationwide average price of slaughtered pigs has fallen below 5 yuan per jin. Some places have even dropped below 4 yuan, reaching a twenty-year low. Farmers are experiencing the “most difficult period” in recent pig cycles. Historical data shows that the pig market follows the pattern of “big rise followed by big fall, big fall followed by big rise”; the more severe the decline, the sharper the rebound afterward. So, can entering the market now and waiting for a price rebound guarantee profits? How many are preparing to enter?

Many may still remember that during the transition of the pig cycle from 2018 to 2019, in just over a year, the price of pigs rose from less than 5 yuan per jin to nearly 20 yuan per jin. Raising a pig went from losing a few hundred yuan to earning nearly 3,000 yuan. At that time, some even crossed over into pig farming and made a lot of money. Summarizing these historical data, some concluded that the pig market “big rise must be followed by big fall, big fall must be followed by big rise.” Given how much pig prices have fallen in this cycle, the mentality of farmers is worth close attention. Are there any farmers preparing to buy at the bottom, waiting for a turnaround?

Currently, large breeding groups are basically reducing pig production capacity, with some companies seeing a decline of over 10% in the number of breeding sows since last year. However, emerging small and medium-sized farms have been expanding capacity against the trend, with a clear intention to gamble on a pig cycle reversal. These companies mainly operate on a contract farming model, where individual farmers raise pigs in their own pigsties for these companies. A contract farmer in Jilin said that local contract farming companies are not only not reducing capacity but are actually expanding. “No contract farming company is talking about cutting capacity now. Many companies are coming to us, trying to ‘poach’ farmers. Recently, a contract farm in Harbin came to us, asking if we would go to their place, offering favorable conditions,” the farmer said.

However, these contract farmers believe that these companies are overextending early. If the pig cycle reverses in time, they can make a big profit. But if pig prices remain low, their capital chains could easily break. “They’re raising pigs with money, and they can’t afford to lose, especially those without strength. Our company is financed; for example, in piglets, there’s an investor, and a feed factory supplies feed, and they share the profits, supporting the company to this day. If pig prices keep falling, would you invest in a company with no hope? You’d probably withdraw too,” the farmer added.

Compared to these pig contract farms, the mentality of small farmers is more rational. A farmer in Shanxi told reporters that due to the extremely low pig prices, many local farmers have stopped raising pigs for a while. But so far, few are preparing to buy at the bottom.

The farmer said, “Take our village as an example, there used to be at least eleven or twelve farmers, now most have stopped. Many are just watching. We’ve become more rational. When we discuss, we say that although we’re at a low point now, the prices this year might not have high peaks, but those peaks wouldn’t be very ideal either.”

Regarding the saying that “big rise must be followed by big fall, big fall must be followed by big rise” in pig prices, Zhu Zengyong, a researcher at the Beijing Veterinary Medicine Institute of the Chinese Academy of Agricultural Sciences, believes that this conclusion might be drawn from historical data, but it may not apply to this cycle. One reason is the increasing diversity of meat consumption and the deepening awareness of healthy eating, leading to a decline in pork demand.

Zhu Zengyong explained, “Per capita pork consumption in households has decreased for two consecutive years. According to the National Bureau of Statistics, in 2024 and 2025, the per household pork consumption will be 28.1 kg and 26.6 kg respectively, down 7.8% and 5.4% year-on-year. Also, this is currently the off-season for pork, and pork’s share in total meat consumption is expected to decrease from 62% to 58% by 2025, with poultry, beef, and mutton replacing some pork consumption.”

On the other hand, although the nationwide breeding sow inventory is decreasing, pig production capacity remains relatively stable due to improved efficiency. Therefore, entering the pig market now and waiting for a price rebound does not guarantee profits.

Zhu Zengyong stated, “The level of scale and industry concentration has increased, driving about 3% annual improvement in overall breeding efficiency. The stability and productivity of pig farming now are much higher than in previous cycles. Under this increased stability, future cycles are likely to show weaker fluctuations, meaning the large rises and falls seen before are unlikely to recur.”