China's pork industry in deep surplus aside weak demand

While China's pork production surged to 59.38 million tonnes and hit a record high in 2025, the national average slaughter hog price slumped to Yuan 4.3 per jin (approximately Yuan 8.6 per kg) by April 2026, with some provinces even dropping below Yuan 4 per jin.

The poor price performance is partly attributed to the production continuing to break records, and the share of pork consumption keeps declining. Even more concerning is the slow reduction of breeding sows, as large enterprises prefer to sustain losses rather than cut production. Under severe supply-demand mismatches, hog prices have lost support, and the industry is undergoing a deep adjustment.

According to data from Mysteel, on April 14, the national average slaughter hog price stood at Yuan 4.3/jin, with some provinces averaging below Yuan 4/jin. The underlying structural imbalance lies in the fact that after African swine fever, large enterprises in China have expanded counter-cyclically with capital strength, while tens of millions of small farmers were forced out due to costs and risks, driving the industry's scaling-up rate to 70%. These large enterprises are willing to outlast competitors even at a loss, resulting in breeding sow inventories exceeding the warning line.

Based on pork production data from 2015 to 2025, China's pork output initially declined before resuming growth, showing an overall upward trend with notable fluctuations. In 2019 and 2020, output fell sharply to 42.55 million tonnes and 41.13 million tonnes, respectively, the lowest levels in a decade. This was primarily driven by the African swine fever outbreak, tighter environmental policies, and cyclical market swings, all of which led to a significant reduction in hog inventories.

From 2021 onward, government measures to stabilize production and ensure supply, combined with the normalization of epidemic controls and production resumption by farming enterprises, drove a rapid recovery in pork output, which reached a record 59.38 million tonnes in 2025.

However, while supply continues to hit new highs, domestic pork consumption has undergone structural shifts. Pork's share of total meat consumption in China has been steadily declining with improving diets, rising health awareness, and growing availability of alternatives such as poultry, beef, and aquatic products.

This growing supply-demand mismatch has left pork prices without demand-side support, putting the industry under significant downward pressure. In this context, hog cycle regulation and capacity optimization have become urgent priorities.

In March 2026, the number of breeding sows on large-scale farms decreased by a marginal 0.35% month-on-month, with a cumulative decline of only 1.8% from July last year to March this year. The overall pace of reduction remains very slow. Compared with rapid capacity reduction in historical hog cycles, this round of adjustment is much milder.

A comprehensive assessment shows that breeding sow inventories remain high, and capacity reduction has been slow. This suggests that over the next ten months or so, the number of hogs for slaughter will not decrease significantly, keeping supply ample. With pork's share of total meat consumption continuing to decline, the combination of high supply and weak demand will keep hog prices under sustained downward pressure, posing serious challenges to industry profitability.

A genuine capacity reduction, through widespread culling of sows, has yet to take place, which could prolong the "bottoming-out" phase of this hog cycle beyond historical norms. However, once a thorough capacity reduction is completed, a rebound in hog prices is inevitable. Meanwhile, historical experience indicates that government procurement and storage policies alone cannot reverse the downward trend in hog prices during periods of excess capacity.