China's hog prices to climb on structural imbalance and seasonal demand

While the hog prices remained generally soft through 2025, the prices managed a rally entering 2026. China's domestic average hog slaughter price rose from Yuan 11.34 /kg on December 21, 2025 to Yuan 12.83/kg on January 22, 2026, an increase of 13.14% during this period. And the prices even approached Yuan 14/kg in southern China.

This price increase was the combined effects of multiple factors, including short-term supply reduction and recovering demand. However, the sustainability of this upward trend remains uncertain.

Specially, the supply-side contraction is the core driver of the current hog price rally, reflecting both the long-term trend of capacity reduction and the direct impact of short-term structural imbalances.

The inventory of breeding sows, as a key leading indicator for hog prices, directly determines the scale of commercial hog slaughter about ten months later. According to data from Mysteel, based on 208 regularly tracked sampled enterprises, the breeding sow inventory at 123 large-scale farms in December 2025 was 5,020,200 head, a slight decrease of 0.18% month-on-month and 0.47% year-on-year. Among the 85 small and medium-sized scattered sample farms, the breeding sow inventory in December 2025 was 167,660 head, down 1.19% month-on-month and 1.54% year-on-year.

In addition, the structural imbalance of "ample standard-weight hogs but scarce heavy hogs" has played a more significant role in shoring up the prices in the near term.

In the fourth quarter of 2025, many farmers suffered significant losses, prompting some small and medium-sized farmers to hold back hogs and to raise heavier ones, hoping to profit from price differentials. This directly reduced the supply of appropriately sized hogs weighing 125-150 kg. Additionally, a few swine diseases induced by low winter temperatures prompted some farmers to slaughter hogs earlier, further exacerbating the shortage of heavy hogs.

Although recent price increases have led to fluctuating declines in slaughter volume at processing enterprises, overall operating rates remained relatively high compared to the past year. The recovery in demand, combined with supply-side contraction, has provided strong momentum for the price increase.

Entering January 2026, although curing and sausage-making demand in southern regions is nearing its end, the peak season for sausage-making in northern regions continues. Household demand for making cured meat and sausages has laid a solid foundation for pork consumption.

Furthermore, starting in February, large-scale stockpiling before Chinese New Year (CNY) holiday by supermarkets and catering enterprises began, coupled with increased household purchasing willingness, will generate additional demand. This has led to rising slaughter operating rates and a simultaneous recovery in retail prices.

Looking ahead, the increase in hog slaughter from the farming side has been limited, providing short-term support to hog prices from the supply side. Specifically, large-scale farming enterprises have mostly adopted strategies to increase hog weights, actively controlling the pace of slaughter and keeping the slaughter pressure low. The inventory of small-scale farmers has decreased year-on-year, and rising reluctance to sell among some farmers has further tightened market supply.

On the demand side, consumption is likely to see seasonal increases. Affected by poor weather conditions, the circulation of fresh pork in terminal markets has been hindered, leading to lower operating rates at slaughterhouses and more cautious purchasing attitudes toward hogs. However, as the 15th day of the twelfth lunar month approaches, CNY festival stockpiling demand gradually begins, and pork consumption is steadily moving toward its annual peak.

Based on a comprehensive assessment of supply and demand dynamics, short-term supply pressure in the hog market is unlikely to increase significantly, while the momentum for demand recovery continues to strengthen. As a result, hog prices are expected to maintain a volatile yet firm trend in the near term.

Written by Stacy Chen, chenyijuan@mysteel.com