Journalist Observation: Pig prices have fallen to their lowest level in nearly seven years. What are the underlying reasons? What is the future trend?

CNR News Beijing, March 29 (Reporter Wang Ying) - According to the Central Radio and Television Station’s Economic Voice program “Global Finance,” recently, the price of pork in consumers’ shopping baskets has become increasingly affordable. The latest market data shows that the nationwide price of live pigs has dropped to around 5 yuan per kilogram, while the breeding cost is generally above 7.5 yuan per kilogram. What is the core reason for the decline in pork prices? How should farmers respond? What trends can we expect for pork prices in the future?

Data shows that as of March 25, the average price of external three-tier live pigs nationwide was 10.16 yuan/kg, equivalent to 5.08 yuan per kilogram, reaching a seven-year low. Meanwhile, feed prices continue to run at high levels, with breeding costs firmly locked in at above 7.5 yuan per kilogram.

So, what is the reason for this round of declining pork prices? Zhu Zengyong, a researcher at the Beijing Institute of Animal Husbandry and Veterinary Medicine of the Chinese Academy of Agricultural Sciences, analyzes: “Currently, in addition to the price hitting bottom in the live pig market, there is a coexistence of hogs being held back and the slaughter of heavier pigs, while weak terminal consumption drags down the slaughter rate to a relatively low level. After the willingness to replenish stocks declines, piglet prices begin to drop. From the perspective of supply and demand, supply remains at a high level, while demand faces short-term seasonal slumps and long-term diversification of meat consumption.”

In addition, unlike previous years, the situation of oversupply is more apparent this year. Zou Yingji, a pig analyst at Zhuochuang Information, believes: “We are currently in a period of capacity release, and the enthusiasm for slaughter on the breeding end is still relatively high. However, the demand is at a relatively low point this year, and even if the breeding end wants to sell, the demand cannot keep up, so they cannot move their products, and the trading weight cannot drop. For example, in previous years, although the demand was also at a low point after the Spring Festival, and supply exceeded demand, the amount of capacity released at that time was not as large. Now, from March to May is precisely when the capacity release is at its peak; overall, the degree of oversupply may be greater than in previous years.”

Faced with structural changes in the market and phase adjustments, what should farmers do? Zhu Zengyong suggests: “The core principle is to abandon the luck-based mentality of gambling on the market and betting on rebounds, and instead shift towards strategies that prioritize cash flow management, cost control, and defensive strategies of timely sales. For small and medium-sized farmers, timely sales should not gamble on market conditions, with maintaining cash flow as the primary goal to avoid being forced to exit due to a broken capital chain, and to eliminate inefficient productive sows in a timely manner; for family farms and large-scale farms, fine management of breeding costs is essential to reduce costs and increase efficiency, and to reasonably adjust the number of productive sows; for group companies, it is necessary to implement capacity reduction tasks, plan for capacity reduction, optimize the population structure of sows, strictly control slaughter weights, take the lead in stabilizing trends, and play the role of a market stabilizer.”

What trends can we expect for pork prices in the future? Zou Yingji predicts: “Based on the current monitored data, we expect that pork prices will gradually warm up from July to August. Starting in July, pork prices in the second half of the year will generally show a fluctuating upward trend, but according to our research, the enthusiasm for capacity reduction among breeding groups is not very high. Whether due to policy advocacy or the current prices affecting profitability, the pace of liquidation for small and medium-sized breeding enterprises is expected to be faster than that of large-scale breeding groups. We anticipate that in the second half of 2026, pork prices will rise in fluctuations, but due to the slow pace of capacity liquidation, the extent of the increase is expected not to be very high.”

Zhu Zengyong expects that pork prices will stop falling and stabilize in the second quarter, and show a moderate recovery in the second half of the year.

“Considering the production cycle, we expect that pork prices will stop falling and stabilize in the second quarter. As the effects of previous reductions in productive sows gradually become evident, coupled with a gradual warming of consumption, pork prices are expected to rise moderately, although the possibility of a turning point in the market is relatively small.”