Pig prices have fallen more than 28% since the beginning of the year, with industry-wide losses intensifying, and capacity reduction entering a critical window.

Pork prices keep falling to new lows, and the chill in the market has not yet lifted.

According to monitoring data from the Sogou Pig website, as of March 27, the national average price of lean-type hogs had dropped to 9.43 yuan per kilogram, down 28.34% from the interim peak of 13.16 yuan per kilogram in mid-January. Year over year, it is down about 35.6%, and has hit the lowest level since May 2018.

Industry insiders believe that supply pressure remains the main contradiction in the current market. On the supply side, as of the end of 2024, the country had 40.74 million head of sows in stock that have been used for breeding. PSY has risen to 23.3 piglets (up about 46% compared with before the African swine fever). The substantial improvement in production efficiency means there is a more solid base for the availability of market hogs for slaughter.

On the demand side, conditions remain persistently weak. After the Spring Festival, the market entered the annual consumption trough; household inventories have not yet been fully digested. Retail “white ticket” sales have been sluggish. In addition, as awareness of healthy eating has become more widespread and substitutions such as poultry meat have clearly diverted demand, the pattern of pork consumption stands out: “it’s not旺 in the peak season, and it’s even more淡 in the off-season.” Driven by policy regulation, secondary fattening is approached cautiously; slaughterhouses’ cutting and warehousing are mainly done through limited, sporadic operations, and the industry’s ability to absorb finishing hogs is limited.

Against the backdrop of weak hog prices, losses in the industry are further intensifying.

As of March 27, the national hog-to-corn ratio has fallen to 3.9:1, far below the first-tier warning line of excessive downside at 5:1. Losses per breeding-and-raising hog for self-supplied feed operations are generally more than 300 yuan per hog, and some breeders with weaker cost controls may be losing as much as 500 to 600 yuan.

Recently, the National Development and Reform Commission and the Ministry of Agriculture and Rural Affairs have organized a special meeting. They required leading hog companies to strictly implement capacity-control measures, scientifically plan production and business operations, and orderly reduce the number of breeding sows in inventory. The target for maintaining the breeding-sow population was further lowered to 36.5 million head, and annual production filing management was also introduced for these sows, to restrain disorderly expansion. Industry insiders believe that with “dual-track” support—policy backing and market-based capacity deleveraging—the industry may accelerate toward clearing.

From a capital-flow perspective, the livestock breeding-themed ETF has continued to receive counter-cyclical subscriptions in recent days, indicating that some investors have already been positioning on the left side. The previous trading day, the Livestock Breeding ETF Merchandising (516670) received a net capital inflow of 16.86 million yuan, ranking first among **** with the same index ETFs. In the past 10 trading days, the cumulative net capital inflow totaled 95 million yuan.

The Livestock Breeding ETF Merchandising (516670) tracks the CSI Livestock Breeding Industry Index, focusing on leading companies in the breeding sector such as Muyuan Shares, Wen’s Shares, and New Hope, among others, with the “hog exposure” close to 60%. According to the fund contract, the management fee rate for the Livestock Breeding ETF Merchandising (516670) is 0.2% per year, lower than other ETFs in the same index category.

For the outlook, institutions generally believe that the industry is now in a typical bottom area of the cycle.

CITIC Securities notes that, against the background of steadily recovering household consumption, continuous deleveraging of capacity in the hog breeding industry, and a strengthening foundation for supply contraction, a new round of the hog cycle is gradually building up momentum. Since the establishment in 2021 of the “master switch” for regulating breeding sows, the policy side has continued to improve the industry’s regulation mechanism, providing institutional support for eliminating inefficient capacity, stabilizing supply timing, and smoothing price fluctuations.

CICC? (Shanxi Securities) notes that if industry prices remain persistently low, it may further help market-based capacity deleveraging. Judging from the pace of breeding-sow inventory reduction, it is expected that starting in the second half of 2026, supply pressure from market hogs could gradually ease, and improvements in supply-demand relations are worth anticipating.

Risk warning: Funds involve risk; investment requires caution.