China hog prices are likely to see two upcycles in H2 2026

In detail, as of the end of the second quarter of 2026, the national breeding sow inventory stood at 37.80 million head, a year-on-year decrease of 2.63 million head, or 6.5%, NBS data showed. This marks a sharp acceleration from the 3.3% decline recorded in the first quarter, with the quarter-on-quarter contraction widening by 3.2 percentage points, indicating a clear pickup in the pace of capacity reduction.

The current inventory level is now only 0.8% above the normal benchmark of 37.50 million head set by the Ministry of Agriculture and Rural Affairs, suggesting that the industry's basic production capacity has completed a phased and reasonable adjustment and is gradually returning to a compliant and balanced range.

This round of hog capacity reduction is not only the result of domestic capacity control policies, but also been driven by extreme weather disruptions in major pig-producing regions, such as Guangxi, which have recently experienced severe rainy weather events leading to passive regional inventory losses.

The ongoing optimization of the capacity structure, coupled with the full exit of inefficient capacity, is expected to gradually improve market supply-demand fundamentals and provide support for a slow recovery in hog prices in the coming months.

Back to the complex of hog market, the hog supply side remains generally ample, while demand continues to be subdued, leaving the market without effective upward momentum.

On the supply front, the top-tier domestic hog farming groups have maintained a steady slaughtering pace, with the industry as a whole adhering to normal monthly slaughter plans and showing few instances of active increases or reductions. However, the overall slaughtering progress across the industry has been relatively slow, resulting in deferred slaughtering pressure, with some batches of hogs being pushed back to August for release.

Meanwhile, southern production areas have entered the hot and humid summer season, making weight gain more challenging for pigs. Large-weight hogs from scattered farmers continue to be digested in an orderly manner, and the industry's average hog weight has shown a slight upward trend overall.

On the demand side, the current period falls within the traditional off-season for pork consumption. Terminal consumption from both the catering sector and households remains sluggish, with no obvious positive catalysts. Pork trade activities are moving slowly, and the supply-demand mismatch persists.

In summary, the short-term market is characterized by "steady supply release and persistently weak demand", making upward resistance for hog prices relatively strong and keeping prices under phased pressure.

Based on the capacity cycle, slaughtering pace, and seasonal consumption patterns, hog prices in the second half of the year are expected to see two distinctive up-cycles, with each successive peak lower than the previous one.

In July, hog slaughter volumes and hog demand are projected to remain largely flat compared with the previous period, and hog prices are expected to remain under pressure. Given the delayed slaughtering progress in July, some of the slaughtering pressure is expected to shift to August. During July-August, the market will continue to digest the overhang of large-weight hogs from earlier second-round piglet retention, with the destocking cycle projected to last until around mid-to-late August (approximately August 20).

By the end of August, school-season restocking is expected to bring phased consumption support, combined with the concentrated release of pent-up bullish sentiment. Hog prices are anticipated to see the first round of increases from late August to early September, with a projected rise of Yuan 1-2/kg, potentially breaking through the Yuan 12/kg level and challenging the Yuan 13/kg mark. However, the sustainability of this rally is expected to be limited, and the market is likely to enter a period of correction and consolidation by mid-September.

Thereafter, around mid-to-late September, as the Mid-Autumn Festival and National Day holiday approaches, terminal restocking demand is expected to pick up modestly about five days before the holiday, driving a second moderate upward wave in hog prices. However, this round's peak is projected to be lower than the first peak in early September, as the core driver stems from rigid pre-holiday restocking demand, while the seasonal consumption boost remains limited. Consequently, the upward momentum in this round will be weaker, resulting in a mild price trend.