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China’s listed pig farming companies have faced mounting financial difficulties since the start of this year, as domestic hog prices hit their lowest point since 2019.
According to incomplete data, nineteen publicly traded Chinese pig breeders reported their sales for the first two months of the year. While their total sales increased by nearly 10% to 30.4 million pigs compared to the same period last year, their revenue continued to be pressured.
The current spot hog price has plummeted nearly 15% to CNY10.29 (approximately USD1.49) per kilogram, falling below the industry’s breakeven cost and nearing record lows of around CNY10.26. Even farms employing a self-breeding and self-raising model, which typically have lower costs, have experienced losses for five consecutive weeks, with deficits surpassing CNY280 (roughly USD41) per hog this week.
Industry leader Muyuan Foodstuffs sold over 11.6 million hogs in the first two months, generating revenue of CNY1.1 billion (USD154.7 million) in January and CNY640.5 million (USD93.1 million) in February. These figures represent decreases of 12% and 24%, respectively, from the previous year, primarily due to a sharp decline in the average selling price of hogs.
Meanwhile, Wens Foodstuffs Group sold nearly 5.7 million pigs during the same period. Its February revenue was CNY395.6 million, reflecting declines of 16% both month-over-month and year-over-year.
Oversupply and Weak Demand Continue to Drive Prices Down
The persistent drop in hog prices stems mainly from oversupply and sluggish demand.
The pace of capacity reduction in pig breeding remains slow, with inventories still high. As of December 31, China’s breeding sow stock exceeded 39.6 million, slightly above the 39 million target set by the Ministry of Agriculture and Rural Affairs.
Furthermore, increased production efficiency has intensified supply pressures. Although the number of breeding sows has remained relatively stable, the actual output of market-ready hogs continues to rise.
In early March, the Ministry of Agriculture and Rural Affairs, alongside the National Development and Reform Commission, held a special meeting with seven leading pig breeders, vowing to tighten regulations on hog capacity. Industry insiders suggest the breeding sow inventory target for 2023 might be cut to around 36.5 million, roughly 7.9% lower than current levels.
Analysts forecast that the industry could reach its lowest point in the second half of the year if strict capacity reduction measures are enforced and unprofitable operations are phased out. A private equity manager noted that the current pig prices are expected to stay under pressure, with potential for further declines, mainly due to a high average slaughter weight and ongoing increases in newborn piglets, which will continue to burden sales during the first half of the year.
Adding to the challenges, pork consumption has slowed after the Chinese New Year holiday, entering a typical off-peak period with reduced distribution. Meanwhile, the prices for key feed ingredients—soybean meal and corn—have risen to their highest levels since August 2024, significantly increasing feeding costs for farmers.
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