Starting from January 2, the national live hog prices ended a 10-day continuous rebound and pivoted for the downward direction. Driven by this round of price movements, the breeding sector has ended a 2-3-month period of losses, successfully turning losses into profits and entering a phased "golden period" for hog sales.
Multiple factors converged to drive the rebound in hog prices
The sustained rebound in live hog prices earlier was the result of multiple factors, including strong fundamentals, disruptions from African swine fever, the entry of secondary fattening operations, and bullish market sentiment.
On the supply side, the increase in hog sales by large-scale farming enterprises in December was not significant, while the sales pace was relatively fast, with monthly sales plans being highly completed.
This outcome was primarily due to a series of measures taken by the industry since July, such as reducing hog weights, adjusting down the inventory of breeding sows, and actively selling hogs. These actions released year-end sales pressure in advance, making it unnecessary for the market to rely on weight reduction to catch up with annual sales targets in December. As a result, supply pressure in the market was temporarily alleviated.
The recovery on the demand side provided strong support for the price rebound. As the weather turned colder, terminal pork consumption showed a habitual increase. Particularly, in some southern regions, the ongoing production of cured meats drove demand for larger hogs, creating a clear positive impact.
According to data from MySteel, the operating rates of sampled slaughtering enterprises in December reached an average of 39.44%, an increase of 5.32 percentage points from the previous month and a year-on-year increase of 3.76 percentage points. The operating rate during the month ranged from 37.02% to 41.00%, with the increased activity at the slaughtering end directly reflecting the recovery in consumption.
Beyond the fundamentals, factors such as African swine fever, secondary fattening operations, and market sentiment also played significant roles.
Earlier, localized outbreaks of African swine fever intensified, with regions such as Shandong, Henan, Anhui, Jiangsu, and parts of Northeast China being more noticeably affected. This forced the breeding sector to sell hogs ahead of schedule, leading to a concentrated influx of smaller-weight hogs into the market, as seen in the earlier phenomenon of low-priced sales of larger hogs.
Although the outbreaks are now effectively under control, the disruptions caused by the disease reduced the supply of hogs in specific weight ranges, particularly creating a supply gap for medium-to-large hogs weighing 140-165 kg. Combined with increased demand, this temporary supply-demand imbalance directly drove prices higher.
At the same time, market expectations for price increases strengthened, and secondary fattening operations entered the market, becoming another important driver of the price rebound.
Price rebound lacks sustainability, and supply pressure constrains upward potential
From the supply side, subsequent sales pressure remains substantial. Based on the progress of capacity adjustments, hog supply in the first half of 2026 is still on an upward trajectory compared to 2025.
For January alone, supply may be no less than, or even greater than, that of December. This trend is directly related to the inventory of breeding sows ten months ago and the volume of piglet restocking five and a half months ago.
On the other hand, with the Chinese New Year (CNY) holiday approaching in February, some large-scale farming enterprises plan to sell hogs in advance, and hogs from small-scale farmers and secondary fattening operations will also be sold before the holiday. The overlap of multiple sources of supply increases will exert downward pressure on market prices.
On the demand side, while there is a recovery, the increase is relatively limited. Currently, cured meat consumption and concentrated consumption in some regions are modest.
Additionally, with the CNY occurring later this year, terminal consumption demand is noticeably delayed, making it difficult to achieve rapid growth in the short term and resulting in insufficient momentum for price increases.
Moreover, the secondary fattening market is likely to see more hogs sold than purchased in the later stages, and the volume of larger hogs sold by small-scale farmers is also increasing. When these multiple factors feed into price dynamics, the risk of subsequent declines in hog prices intensifies.
Despite the lack of sustainability in the price increase, the downside for hog prices is also relatively limited. From the supply side, large-scale farming enterprises report that while hog sales in January will increase, the magnitude of the increase is limited. Small-scale farmers and secondary fattening operations, having experienced earlier disruptions from African swine fever and low-price sales, have already released sales pressure in advance, leading to a noticeable year-on-year reduction in hog inventories. Even with expectations of concentrated sales before the CNY, the market is unlikely to see a rush of panic selling, making it less probable for hog prices to fall below previous lows.
Coupled with the pull of pre-CNY stocking demand, there is potential for hog prices to show phased strength and rise after late January, thereby lifting the overall price level for the month. Based on a preliminary assessment of multiple factors, the price center for hogs in January may shift slightly upward, with the average price potentially Yuan 0.2–0.3 /kg higher than the Yuan 11.49/kg recorded in December. At the critical juncture of pre- CNY holiday stocking, the phased high for hog prices may exceed Yuan13.5/kg.
