– Pork prices in China have plummeted to a 7-year low, hovering just 0.30 yuan/kg above the historical minimum recorded in 2018.
– Listed pig enterprises are reporting a ‘volume increase, price decrease’ scenario, with销售收入 (sales revenue) falling year-on-year despite higher slaughter volumes.
– The entire industry is in deep亏损 (losses), with the self-breeding model now unprofitable for five consecutive weeks as feed costs rise.
– Policy interventions are emerging, with the农业农村部 (Ministry of Agriculture and Rural Affairs) proposing to lower sow inventory targets to 36.5 million heads.
– Market analysts predict the cycle bottom may form in the second half of 2026, but short-term prices could fall further due to high supply and weak demand.
In a startling development for China’s agricultural sector, the nation’s hog market has plunged into a severe downturn, with pork prices hitting a 7-year low. This precipitous drop brings the current price perilously close to the all-time lows seen during the 2018非洲猪瘟 (African swine fever) crisis. The focus phrase, ‘pork prices hit 7-year low,’ encapsulates a crisis that is now rippling through the entire supply chain, from small-scale farmers to publicly listed giants. With prices跌破 (falling below) the industry’s cash cost line and亏损 (losses) mounting, the first quarter of 2026 is shaping up to be one of the most challenging periods for Chinese pig farming in recent memory. This situation forces a critical examination of structural oversupply, anemic consumption, and the efficacy of regulatory responses in stabilizing a vital component of China’s food security and equity markets.
The Depth of the Decline: Pork Prices Hit 7-Year Low
The Chinese hog market is characterized by a stark ‘peak season no peak, off-season even weaker’ dynamic. Since the春节 (Chinese New Year), prices have continued their relentless slide, with no clear bottom in sight.
Spot and Futures Markets in Sync: Record Lows Across the Board
According to data from中国养猪网 (China Pig Farming Network), the national average price for外三元生猪 (external ternary live hogs) has tumbled to 10.29 yuan per kilogram. This represents a year-on-year collapse of 29.7% from 14.63 yuan/kg and a month-on-month drop of 16.75% from February. This price level not only breaches a key psychological barrier for the industry but indeed marks the lowest point since 2019. Historically, the decade’s lowest price was approximately 9.92 yuan/kg in Q2 2018; the current price is a mere 0.30 yuan/kg away from that record. The期货 (futures) market echoes this pessimism. On March 16, the lead hog futures contract LH2605 closed at 10,860 yuan, down 3.14%, setting a new record low since the contract’s listing and reflecting grim expectations for future prices.
Cost-Price Squeeze: Industry Losses Widen Alarmingly
The brutal reality is that the entire industry is now operating at a loss. The自繁自养 (self-breeding and self-raising) model, traditionally considered the most cost-efficient, has been unprofitable for five consecutive weeks. Current losses have expanded to approximately 283 yuan per head. This sustained cash burn is pushing many operations, especially smaller ones, toward a liquidity crisis. The situation is exacerbated by soaring feed costs. Key ingredients like豆粕 (soybean meal) and玉米 (corn) have seen prices surge to their highest levels since August 2024.期货盘面 (Futures market data) shows soybean meal主力 (main contract) prices at 3,071 yuan, up 11.31% year-to-date, and corn主力合约 (main contract) prices around 2,379 yuan, rising 8.23% over the past six months. This cost inflation directly compounds the pressure from falling卖价 (selling prices).
The Root Causes: A Perfect Storm of Oversupply and Weak Demand
The dramatic decline in pork prices is not a random event but the result of powerful fundamental forces. A persistent supply glut is colliding with tepid post-pandemic消费复苏 (consumption recovery), creating a market where prices have nowhere to go but down.
Persistent High Inventory and Improving Efficiency
On the supply side, the industry’s产能去化 (capacity reduction) process has been painfully slow. Data indicates that as of the end of December 2025, the national能繁母猪存栏量 (inventory of breeding sows) stood at 39.61 million heads. This figure slightly exceeds the 39 million head ‘normal保有量上限 (retention ceiling)’ set by the农业农村部 (Ministry of Agriculture and Rural Affairs). More critically,生产效 (production efficiency) has improved significantly since the非洲猪瘟 (African swine fever) outbreak. Industry-wide metrics like PSY (Pigs per Sow per Year) have risen, meaning that even with a stable sow inventory, the actual number of market hogs produced has increased. This dual pressure of high stock and better yields ensures that market supply remains abundant.Seasonal Slump and Lackluster Consumption
Demand provides no relief. The post-Lunar New Year period is traditionally a weak season for pork consumption, and this year is no exception.终端走货 (End-market sales) have slowed noticeably. While屠宰企业 (slaughterhouses) are attempting to压低收购价 (press down purchase prices),养殖端 (breeding farms) are exhibiting some惜售情绪 (reluctance to sell) due to severe losses, leading to a stalemate in market transactions. A worrying signal comes from the仔猪价格 (piglet price), a leading indicator for farmer sentiment, which has begun to show signs of weakness. This suggests that补栏意愿 (willingness to replenish stocks) is dwindling, and pessimism is spreading from the finished商品端 (commodity end) upstream through the breeding chain.
Impact on Listed Giants: Volume Up, Revenue Down
Sales Data Reveals a Painful TrendA review of disclosures from 19 listed hog companies shows they collectively出栏 (slaughtered) 30.43 million heads in January-February, a 9.9% year-on-year increase. However,销售收入 (sales revenue)普遍下滑 (widely declined). The industry leader,牧原股份 (Muyuan Co., Ltd.) (002714.SZ), led in volume with 11.612 million heads slaughtered, but its销售收入 (sales revenue) for January and February fell 11.93% and 23.98% year-on-year, respectively. Similarly,温氏股份 (Wens Foodstuff Group Co., Ltd.) (300498.SZ) and新希望 (New Hope Liuhe Co., Ltd.) (000876.SZ) reported increased出栏量 (slaughter volumes) but decreased revenue.温氏股份 (Wens) saw its February sales revenue drop 15.58% year-on-year to 3.956 billion yuan, its lowest February figure since 2025.Dark Clouds Over Q1 Earnings
With hog prices breaking below 11 yuan/kg in March and threatening the 10 yuan/kg level—a further drop of about 9.3% within the month—the prospects for listed companies’ first-quarter earnings are dim. The ‘sell more, lose more’ dynamic is set to pressure profit margins and cash flows significantly. Investors must brace for potentially substantial亏损 (losses) when Q1 results are announced, a direct consequence of the ongoing price crisis.
Policy Responses and the Search for a Floor
Recognizing the systemic risk, Chinese authorities have begun to intervene. The focus has shifted toward managing the supply side more aggressively to stem the bleeding and stabilize the market.Regulatory Moves to Curb Capacity
As highlighted in a华安证券 (Huaan Securities) research report, the农业农村部 (Ministry of Agriculture and Rural Affairs) and the国家发改委 (National Development and Reform Commission) convened a meeting with seven major pig farming enterprises in early March. The key takeaway was a proposal to further strengthen生猪产能调控 (hog capacity regulation). The regulatory target for能繁母猪存栏量 (breeding sow inventory) may be adjusted downward to around 36.5 million heads, a reduction of roughly 7.9% from current levels. Furthermore, the meeting discussed establishing a备案制 (filing system) to压实企业的产能调控责任 (solidify enterprises’ capacity control responsibility), aiming to guide the industry away from ‘内卷式’竞争 (involution-style competition).
Analyst Outlook: A Long Road to Recovery
Market participants remain cautious about a quick turnaround. A私募基金负责人 (private fund manager) interviewed by第一财经 (First Financial Daily) suggested that if the new capacity control targets are strictly implemented and combined with被动去产能 (passive capacity reduction) forced by deep industry losses, the foundation for the next price upcycle could be laid in the second half of 2026. However, the short-term view remains pessimistic. ‘去产能 (Capacity reduction) is not achieved overnight,’ the manager noted. ‘Given the客观存在 (objective existence) of a roughly 10-month fattening cycle, coupled with high current inventory, rising feed costs, seasonal demand weakness, and limited二次育肥 (secondary fattening), short-term hog prices could continue to decline.’ The actions of large listed firms will be crucial; if they主动降低出栏节奏和规模 (actively reduce slaughter pace and scale) to conserve cash, it could accelerate industry-wide capacity clearance and eventually support价格回升 (price recovery).
The Chinese hog industry is navigating its most turbulent waters since the非洲猪瘟 (African swine fever) pandemic. The core issue of ‘pork prices hit 7-year low’ has exposed deep-seated structural imbalances between supply and demand. While listed enterprises demonstrate scale through increased output, they are hemorrhaging money due to collapsing prices. Regulatory intentions to curb sow inventory are a step in the right direction, but their enforcement and timing will be critical. For investors, the current phase demands vigilance: monitor monthly sales data from key players like牧原股份 (Muyuan),温氏股份 (Wens), and新希望 (New Hope), track official announcements on capacity policies from the农业农村部 (MARA), and watch for inflection points in feed commodity prices. The cycle will eventually turn, but positioning for the recovery requires patience and a keen eye on the fundamentals that will signal the true end of this downturn.