China's hog prices are expected to strengthen after an initial dip in the fourth quarter of 2026 thanks to improvement in both supply and demand, though the momentum is limited.
Looking back on the third quarter, the average domestic live hog price was Yuan 10.73/kg, up 13.31% quarter-on-quarter and down 22.08% year-on-year. The breeding sector suffered losses, and piglet prices plunged. However, the breeding sow herd continued to be destocked.
By month, in July, driven by secondary fattening entry, hog prices surged to Yuan 11.39/kg before falling back, dropping to Yuan 10.28/kg at month-end.
In August, group farms sold hogs relatively quickly, and the market dynamics of strong supply and weak demand remained unchanged, with the average price at Yuan 10.75/kg; prices rose to Yuan 11.23/kg in mid-August before slowly declining.
In September, group farms temporarily controlled the shipment, and smallholders were reluctant to sell large hogs when the end-market consumption fell short of expectations, with the average price at Yuan 10.67/kg, down 0.74% month-on-month.
Overall, the third quarter saw the hog prices rise first, then fall, then fluctuate rangebound, with the breeding sector mired in losses, and self-breeding and self-raising operations posting an average monthly loss of Yuan 159.85/head.
Piglet prices have continued to fall sharply since their July peak. In mid-July, the weekly average price of 7 kg piglets once surged to Yuan 258.57/head, then declined steadily, dropping to Yuan 142.38/head in early September, further falling to Yuan 128.10/head by the end of September, and by October 9 nearly halved to Yuan 105.24/head, a decline of 59.4% from the July peak.
Mysteel's data showed that the monthly average piglet price in September was Yuan 142.30/head, down 19.84% month-on-month and down 49.32% year-on-year, hitting a low in recent years. The sharp drop in piglet prices reflects pessimism in the breeding sector about the outlook, with restocking willingness remaining persistently weak.
Regarding hog destocking, breeding sow inventories continued to decline in the third quarter, with August posting the largest single-month decline of the year. According to Mysteel, breeding sow inventories at 208 sampled enterprises have fallen 7.68% year-on-year, with leading enterprises beginning to actively reduce herds, and are expected to return to the reasonable green zone by the end of September. However, based on the 10-month transmission cycle, the impact of capacity changes on this year's slaughter volume still needs time to materialize.
On the supply side, theoretical commercial hog slaughter volume in the fourth quarter may continue to decline month-on-month, and supply pressure is tending to ease. However, some hogs held back in the third quarter and those used for secondary fattening are expected to go to market in the fourth quarter, combined with high monthly plans at group farms, so the supply side remains relatively ample.
On the demand side, the fourth quarter marks the traditional peak consumption season in China. Specially, the consumption briefly declines after China's National Day holiday in October; in November, curing and sausage-making in southern China gradually begin, with slaughter volume rising about 6%-8% month-on-month; in December, winter solstice and New Year stocking take over, and slaughterhouses' operating rates and white-strip pork movement will pick up seasonally, significantly strengthening end-market consumption.
Overall, the fourth-quarter hog market is expected to see improved supply and demand, with prices showing a "first weak, then strong" pattern. Hog prices may extend the downward trend in October, while in late November, the prices are expected to gradually shift upward driven by the peak season. However, caution is needed regarding the suppression of the rebound height by concentrated slaughter and frozen product inventories. Hog price upside is limited, and the breeding sector may remain in a state of slight loss or break-even.
