Hog prices rebounded from their lows in late December 2025, with the upward trend continuing until mid-to-late January before stalling and declining. Prices in February have fallen below pre-holiday expectations, continuing to adjust downward. As of February 10, the national average price for三元 hogs was 12 yuan/kg. The price reversal before the holiday indicates a severe oversupply situation, with significant short-term downward pressure. The expected price bottom after the holiday is likely to lead to industry losses and a shakeout.
The 2026 No. 1 Central Document proposed strengthening comprehensive regulation of hog production capacity, and the Ministry of Agriculture and Rural Affairs will implement a filing management system for hog production, indicating a continued trend towards more refined policy control. Under the combined pressure of policy and financial losses, capacity reduction is expected to gradually accelerate after the holiday, with hog prices potentially reaching an upward inflection point in the second half of 2026. The main views of Dongxing Securities are as follows:
**Industry Supply and Demand Performance:** Hog prices recovered during the peak season, with the average price in January warming up. Data from the Ministry of Agriculture and Rural Affairs shows that in January 2026, the average prices for piglets, live hogs, and pork were 25.38 yuan/kg, 13.18 yuan/kg, and 23.40 yuan/kg, respectively, representing month-on-month changes of +8.44%, +7.50%, and +3.39%. Prices rebounded from the December 2025 low but began to fall after mid-to-late January. February prices have continued to correct.
**Supply Side:** In January, large-scale farms maintained normal slaughtering rhythms, while small and medium-sized farms slowed their pace, providing some support to January prices. However, weak post-holiday expectations for February led to concentrated pre-holiday slaughtering, increasing supply pressure.
**Demand Side:** Spring Festival stockpiling gradually began in January, providing some boost to the end market. However, slaughterhouses faced significant profit pressure, creating resistance to higher operating rates and price increases. The slaughter operating rate saw a slight uptick in early February compared to the end of January but remained below levels seen in previous years during the same lunar month. The later timing of the Spring Festival led to dispersed demand and insufficient support from end-market stockpiling.
**Capacity Change Trends:** Data from the National Bureau of Statistics shows that the breeding sow inventory was 39.90 million head at the end of October 2025, a month-on-month decrease of 1.10%. By the end of December 2025, the inventory had fallen further to 39.61 million head. Third-party data indicates mixed trends for December: Yongyi's sample data showed a month-on-month increase of 0.54%, while Mysteel's sample data showed a decrease of 0.22%, with small and medium-sized farm capacity down 1.19%. Recent profit improvements during the peak season have slowed the pace of capacity reduction, but the overall downward trend has begun.
**Policy Control and Low Prices to Accelerate Capacity Reduction:** The 2026 No. 1 Central Document emphasizes strengthened comprehensive regulation of hog production capacity, continuing the trend of refined policy control. As of February 13, 2026, the industry average profit for self-breeding self-raising operations was -98.32 yuan per head, indicating a return to losses. The combined effect of policy and sustained losses is expected to accelerate capacity reduction after the holiday.
Regarding investment targets, it is advised to focus on leading breeding companies with industry-leading cost structures and high performance realization, such as Muyuan Foods Co., Ltd. (002714.SZ). Other beneficiaries include Wens Foodstuff Group Co., Ltd. (300498.SZ), DEKON AGR (02419), Tiankang Animal Husbandry (002100.SZ), and Shennong Group (605296.SH).
**January Sales Data for Listed Companies:** The average selling price increased month-on-month. The average hog sales prices for Muyuan Foods Co., Ltd., Wens Foodstuff Group Co., Ltd., Zhengbang Technology, and New Hope in January were 12.57, 12.75, 12.45, and 12.48 yuan/kg, respectively, representing month-on-month increases of 10.17%, 9.91%, 6.41%, and 10.64%.
Slaughter volume decreased month-on-month. The hog sales volumes for Muyuan Foods Co., Ltd. (commercial hogs), Wens Foodstuff Group Co., Ltd., New Hope, and Zhengbang Technology in January were 7.01 million, 2.96 million, 1.12 million, and 0.93 million head, respectively, with month-on-month changes of +0.42%, -35.05%, -37.98%, and -9.83%.
Average slaughter weights were mixed. The average slaughter weights for Muyuan Foods Co., Ltd., Wens Foodstuff Group Co., Ltd., and New Hope in January were 119.93 kg, 124.33 kg, and 116.29 kg, respectively. For companies that disclosed monthly weights, changes were mixed, but the average slaughter weight increased.
**Risk Warning:** Potential risks include listed companies' slaughter volumes and cost control falling short of expectations, as well as animal disease outbreaks.
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