Hog prices bottom out amid deep breeding losses

From early to mid-May, slaughterhouses will likely focus on digesting inventory, and terminal demand is projected to remain weak based on experience, offering little prospect for price improvement. From mid-to-late May onward, as secondary fattening operations enter the market, farmers' reluctance to sell is anticipated to grow. And after the Dragon Boat Festival stocking kicks off, hog prices may see modest gains. However, the rebound potential is limited, and prices are unlikely to break through the Yuan 11/kg level. Over the medium term, persistently high temperatures in June and July will keep the off-season effect prominent, potentially pressuring hog prices downward. In the second half of the year, as capacity reduction gradually takes effect and peak seasons such as the Mid-Autumn Festival and National Day provide support, hog prices are expected to enter an upward channel amid fluctuations, with the fourth quarter likely seeing the year's price peak.

Post-Labor Day holiday, China's domestic live hog market has entered a stalemate, characterized by a "weak supply-demand balance and narrow price fluctuations". As of May 7, 2026, the national average price of DLY (Duroc × Landrace × Yorkshire) hogs stood at Yuan 9.66/kg, with prices fluctuating repeatedly within the Yuan 9.00-10.30/kg range. The industry remains mired in deep losses, while capacity reduction progresses at a slow pace.

On the supply side, the release of previously accumulated high production capacity is still ongoing. Although monthly slaughter volumes have edged downward in May, the overall supply remains sufficient.

According to Mysteel's data, planned slaughter volumes from key breeding farms in May 2026 have narrowed 3.53% month-on-month. Among the 18 monitored provinces and municipalities, only Shanxi, Jiangxi, Hubei, and Guangxi recorded slight month-on-month increases in planned slaughter volumes, while the other 14 provinces saw varying degrees of decline.

However, it is worth noting that national live hog slaughter reached 200.26 million head in the first quarter, up 2.8% year-on-year. The number of breeding sows at the end of the quarter remained high, and the inventory peak from ten months ago continued to affect the present, keeping the supply of standard-weight hogs ample.

At the same time, average slaughter weights in the market remain generally high, exerting persistent near-term downward pressure on hog prices.

On the demand side, weakness remains the core factor restraining any significant price rebounds. The off-season effect, combined with substitution from other meats, has resulted in insufficient terminal consumption support.

Following the Labor Day holiday, pork consumption has entered a traditional off-season. Rising temperatures have reduced household consumption willingness, while demand from the catering and institutional dining sectors has declined accordingly. In this case, the slaughterhouses stick to the hand-to-mouth strategy, and most slaughterhouses are modestly lowering purchase prices.

The current national average wholesale pork price has been approximately Yuan 15.19/kg. Intensified low-price competition at the terminal level, coupled with the attractive price-performance ratio of substitute meats such as chicken and eggs, has further diverted pork consumption demand, leaving hog prices without sustained upward momentum.

The deep losses facing market players and policy support have created a tug-of-war, with deepening industry losses forcing gradual capacity reduction. Currently, the average loss per head under the piglet fattening model remains at 405 Yuan, while breeding-fattening operations are also deeply loss-making. The industry has now been in deep loss for eight consecutive months. The hog-to-feed price ratio has fallen below the early warning threshold of 4.1:1.

In late April, four government departments jointly launched central and local frozen pork commercial reserve purchases, providing market support and effectively preventing a steep drop in hog prices. However, these reserve purchases are only a short-term support measure and are unlikely to reverse the supply surplus.

Faced with mounting losses, farmers are simultaneously holding back sales and passively culling herds, exacerbating market price volatility.

In the short term, the live hog market in May is expected to continue fluctuating at low levels, with a mainstream trading range of Yuan 9.5-10.5/kg.

From early to mid-May, slaughterhouses will likely focus on digesting inventory, and terminal demand is projected to remain weak based on experience, offering little prospect for price improvement.

From mid-to-late May onward, as secondary fattening operations enter the market, farmers' reluctance to sell is anticipated to grow. And after the Dragon Boat Festival stocking kicks off, hog prices may see modest gains. However, the rebound potential is limited, and prices are unlikely to break through the Yuan 11/kg level.

Over the medium term, persistently high temperatures in June and July will keep the off-season effect prominent, potentially pressuring hog prices downward. In the second half of the year, as capacity reduction gradually takes effect and peak seasons such as the Mid-Autumn Festival and National Day provide support, hog prices are expected to enter an upward channel amid fluctuations, with the fourth quarter likely seeing the year's price peak.