The domestic hog market continues to face a severe chill, with the current national average price hitting its lowest point since 2019. According to data from the Ministry of Agriculture and Rural Affairs, during the third week of March 2026, the live hog price fell to 11.05 yuan per kilogram, a year-on-year decline of 28%.
For the breeding sector, "hog prices falling below the cost line" and "losing money on each pig raised" have become the industry norm. In the retail market, post-Spring Festival pork prices have further declined, currently dropping below the 10 yuan per kilogram threshold.
A retailer indicated that the current procurement price for pork has decreased from 11 yuan per jin in the fourth quarter of last year to 9 yuan per jin. However, despite the continuous decline in hog prices, neither profit margins nor sales volume have expanded as a result.
With upstream hog prices persistently hitting new lows, leading companies such as Muyuan Foods Co.,Ltd. are under significant performance pressure. In 2025, although Muyuan Foods Co.,Ltd. reduced its breeding cost to 12 yuan per kilogram, its net profit attributable to shareholders still decreased by 13.39% year-on-year due to falling hog prices. The fourth-quarter profit was only 708 million yuan, indicating a severe compression of profit margins.
In contrast, the chairman's compensation has increased for two consecutive years. It was 2.35 million yuan in 2023, rose to 3.7219 million yuan in 2024—a 58.38% increase—and further increased to 4.1581 million yuan in 2025, up 11.72% from the previous year.
Retail market observations reveal that pork prices have dropped significantly since the Spring Festival. A pork retailer in Southern China reported that the wholesale price was around 11 yuan per jin in the fourth quarter of last year but gradually declined after the festival, with the current procurement price falling to approximately 9 yuan per jin.
The retailer noted that although wholesale prices have fallen, retail prices have been adjusted accordingly, leaving profit margins largely unchanged. Furthermore, the price reduction has had a limited impact on sales volume. Daily procurement is around 100 jin, with stable daily sales equivalent to about half a pig, primarily serving nearby residents, restaurants, and canteens, allowing for daily clearance of stock.
A pork wholesaler in Northern China stated that regardless of hog price fluctuations, their profit margin consistently remains at a few mao per jin. "When prices fall, procurement costs decrease, and selling prices are adjusted downward simultaneously. When prices rise, if sales stagnate, loss costs increase significantly. Whether pork is expensive or cheap, our profit remains similar."
Currently, this wholesaler procures about 700 to 800 jin daily, mainly supplying downstream supermarkets and wholesale clients. Regarding sales volume, the wholesaler indicated that despite lower meat prices, consumer purchasing volume has not seen a significant increase, as people now buy less and consume less meat.
The low prices in the terminal market stem from the continuous decline in upstream live hog prices. According to Ministry data, the average live hog price for the entirety of 2025 was 14.44 yuan per kilogram, down 9.2% year-on-year, marking the lowest annual price since 2019. It is estimated that the average profit per hog sold in 2025 was 31 yuan, a decrease of 183 yuan compared to 2024.
Overall, hog prices in 2025 followed a pattern of being higher early in the year and lower later, trending downward with fluctuations. By quarter, prices were at their annual peak in Q1, continuing the profitability trend from the second half of 2024. Supply pressures emerged in Q2, pushing the industry into a state of marginal profits. Prices accelerated their decline in Q3, leading the industry into a loss-making phase. The downturn accelerated further in Q4, hitting the annual low in mid-October before a slight recovery by year-end.
Entering 2026, hog prices continued their downward trend. Data from the third week of March 2026 show piglet prices at 26.2 yuan per kilogram, down 2.6% month-on-month and 30% year-on-year; live hog prices at 11.05 yuan per kilogram, down 2.9% month-on-month and 28% year-on-year; and pork prices at 22 yuan per kilogram, down 2.1% month-on-month and 16.5% year-on-year. Concurrently, the hog-to-grain ratio fell to 4.40:1, the lowest since 2019, significantly below the Level 1 warning line of 5:1, indicating that hog breeding has entered the Level 1 excessive decline warning zone.
The persistent low prices result from multiple overlapping factors. Analyst views suggest that significant supply pressure is a key driver of the price decline. Since mid-2025, the process of capacity reduction has been slow, and hog sales volumes have remained high from December 2025 onward. Coupled with the failure to effectively reduce slaughter weights around the Spring Festival, this has created dual supply pressures. Additionally, the post-festival period entered a consumption off-season, with weak terminal purchasing demand, further depressing prices amid loose supply-demand conditions.
The sustained low hog prices have directly impacted the performance of major breeding companies like Muyuan Foods Co.,Ltd. As a leading domestic hog stock, Muyuan's 2025 annual results serve as an industry bellwether. The company recently released its 2025 annual report, showing annual operating revenue of 144.145 billion yuan, a year-on-year increase of 4.49%, but net profit attributable to shareholders of 15.487 billion yuan, a decrease of 13.39% year-on-year. This marks a performance decline following the significant loss of 4.263 billion yuan in 2023 and the more than five-fold profit surge to 17.881 billion yuan in 2024.
Muyuan's cost control advantages are notable within the industry. According to financial data, the company exceeded its annual cost reduction target for 2025, with a complete breeding cost of approximately 12 yuan per kilogram, about 2 yuan per kilogram lower than the previous year and below the industry average.
However, the continuous decline in hog prices has significantly compressed Muyuan's profit margins. By quarter, net profit attributable to shareholders was 4.491 billion yuan in Q1 2025, 6.039 billion yuan in Q2, 4.249 billion yuan in Q3, but only 708 million yuan in Q4. The sharp contraction in Q4 profits further dragged down the full-year performance.
Entering 2026, Muyuan's average selling price and revenue have not improved. In January, the average selling price for commercial hogs was 12.57 yuan per kilogram, down 16.92% year-on-year, with sales revenue of 10.566 billion yuan, down 11.93% year-on-year. February figures showed further pressure, with the average selling price dropping to 11.59 yuan per kilogram, a year-on-year decline widening to 18.72%, and monthly sales revenue falling to 6.405 billion yuan, down 23.98% year-on-year.
During an earnings conference, Muyuan's management addressed the impact of low hog prices, stating the company will respond to cyclical fluctuations by further reducing breeding costs, optimizing capacity layout, and improving production efficiency. The company also noted that the impact of feed price fluctuations on slaughter costs requires ongoing attention.
On the policy front, support signals have begun to emerge. On March 4, the National Development and Reform Commission, along with the Ministry of Finance and other departments, initiated the first round of central frozen pork purchases for 2026, totaling 10,000 tons. If hog prices remain low in the second quarter, further purchase policies may be triggered.
Regarding when a price turning point might occur, an Oriental Securities research report notes that the number of newborn piglets began to decline after October 2025. Based on a six-month growth cycle, a price inflection point is expected around April to May 2026. China Post Securities analysis also suggests that industry capacity reduction began after May 2025, which should lead to reduced supply in the second half of 2026, potentially initiating a new upward price cycle.
Comments