The prices of the main futures contracts for live hogs and apples have recently shown a rare phenomenon of synchronous convergence, drawing significant market attention.
"This phenomenon is driven by both inevitability and chance," said Hou Zhifang, an apple researcher at Founder Midterm Futures. From the perspective of inevitability, the hog industry is at the tail end of its capacity cycle, where the digestion of excess capacity is suppressing prices. Conversely, the apple industry is in a phase of capacity contraction, where reduced supply inevitably pushes prices higher. Against this backdrop, the price gap between the two commodities has been narrowing. The element of chance primarily lies in the timing—extreme weather events in apple-producing regions this year have accelerated the rise in apple prices, thereby speeding up the convergence of the price differential.
"This situation also highlights the respective challenges faced by these two major agricultural industries: the profound impact of the hog cycle on the breeding sector and the persistent disruptions caused by weather factors in the apple industry," Hou Zhifang added.
"While understanding common cyclical patterns is important in agricultural research, insights into the unique characteristics of individual products are equally indispensable. Hogs and apples serve as typical examples," Hou noted.
On March 30, a reporter visited a small agricultural market in Huiji District, Zhengzhou City. At the Shuanghui Chilled Meat Factory Distribution Center, the price of skin-on pork belly was 11 yuan per jin, while leg meat was priced at 9.9 yuan per jin. Brands such as Chu Much Xiang and Yurun offered skin-on pork belly at 11 yuan per jin, with leg meat priced around 10 yuan per jin.
"Pork has indeed become cheaper; it's much more cost-effective than before," a citizen selecting pork belly told the reporter.
Zhang Xiaojun, an agricultural product researcher at Green Dahua Futures, stated that the current hog market is in a transitional phase from capacity expansion to the actual release of supply. Although the increase in supply is nearing its end, the large number of hogs being slaughtered, combined with an increase in slaughter weight, is putting significant pressure on pork supply.
"Monthly data on newborn piglets shows that the number of hogs slaughtered peaked in March this year. Furthermore, the slaughter weight of hogs increased rather than decreased around the Spring Festival. These two factors collectively drove hog prices down to historically low levels in March," Zhang explained.
Despite hog prices falling to historic lows, the breeding sector has not experienced deep losses. Zhang Xiaojun indicated that the complete cost for leading hog breeding enterprises has now fallen to around 12 yuan per kilogram.
Relevant data shows that as of March 27, the daily breeding profit for self-sufficient farms was -316 yuan per head, while the profit for farms purchasing piglets for fattening was -221 yuan per head.
"The duration of losses in the breeding industry remains relatively short, and the process of reducing capacity has not yet entered a substantive phase," Zhang believes. In the short term, hog prices may continue to operate at low levels.
In stark contrast to hog prices, apple futures prices have maintained high levels with fluctuations within a range.
Hou Zhifang noted that factors such as reduced production in the current season and low inventory levels have limited overall supply pressure in the apple market, providing support for prices.
It is worth noting that the apple market currently exhibits a differentiated pattern where "premium goods are expensive, while average goods are cheap." Hou believes this structural characteristic supports apple futures prices. Since the quality of goods corresponding to the futures contracts is medium to high, the high prices for premium apples will effectively limit the downside room for the main apple futures contract.
Looking ahead, how will the price trends for hogs and apples evolve? Hou Zhifang suggests that the key for the hog market lies in the pace of capacity reduction, while the apple market needs to monitor the impact of new weather conditions. The price gap between the two is expected to first narrow and then widen.
Zhang Xiaojun stated that the current hog futures contracts fully reflect market expectations for spot prices. Before a substantive reduction in capacity occurs, hog futures prices are likely to continue bottoming out with fluctuations. Breeding enterprises are advised to continue locking in breeding profits, while speculative capital is discouraged from blindly attempting to buy at the bottom.
It is understood that in 2025, leading hog breeding groups, piglet fattening enterprises, and some secondary breeding participants actively engaged in selling hog futures for hedging purposes. This helped them avoid the risks associated with a sustained sharp decline in hog prices and allowed them to lock in breeding profits in advance.
Public disclosures from listed companies show that firms such as
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