Hog prices stay soft despite traditional peak consumption season

As of October 24, 2026, hog prices remained soft, with no clear sign of stabilizing. What has surprised the industry even more is that hog prices hit a historic low in mid-April this year, with prices monitored by Mysteel falling as low as Yuan 8.66/kg, at what was then the traditional off-season.

Now, in October, which is supposed to be the peak season, prices show every sign of breaking below the previous low. This abnormal scenario with no prosperity in the peak season and even weaker conditions in the off-season reflects the deep-seated supply-demand imbalance in the current hog market.

The core reason for this round of price declines is that the increase in supply has outpaced the increase in demand. The situation of supply exceeding demand persists, so prices naturally tend to fall rather than rise. Specifically, supply-side pressure comes from the following four factors.

First, the marketing progress of large-scale breeding enterprises is generally slow. As of October 20, the marketing progress of sample large-scale breeding enterprises was below expectations, and the capacity backlogged earlier needs to be concentratedly digested in the later market, continuously weighing on price expectations.

Second, under continued losses, smaller farmers choose to sell their live hogs, while pigs previously placed into secondary fattening are also rushed to market, creating a temporary increase in hog supply.

Third, frozen product inventories are higher than a year earlier, and prices are weakening in tandem. Under inventory pressure, more goods are being released from storage, and cold-storage meat competes with the fresh-sales market, dragging down overall prices.

Fourth, localized African swine fever outbreaks have led to an increase in the supply of standard-weight and smaller standard-weight pigs, with some farmers forced to market early, further amplifying short-term supply.

Supply-side pressure in the hog market is enormous, and demand-side performance is equally disappointing. After the National Day holiday, domestic slaughter volumes have fallen noticeably, with slaughter volumes at 135 sampled slaughtering enterprises down 5.3% month-on-month from September.

End-user consumption offers little support. After the holiday boost fades, the market lacks sustained demand stimulus. October is traditionally a peak season for pork consumption, but this year's peak-season performance is clearly lackluster as the demand growth is neither sustained nor significant and is difficult to offset the concentrated release on the supply side. The mismatch between supply and demand keeps hog prices under pressure even during the peak season.

It is worth noting that breeding sow inventories announced for the third quarter stood at 36.02 million head, with capacity reduction exceeding expectations. Theoretically, this lays the groundwork for an improvement in the market in the second half of next year. But the problem is that the positive effect of capacity reduction applies to the distant future and offers no support to near-term prices.

From October to December, commercial hog marketing volumes are expected to increase month by month, with considerable supply pressure. In other words, even if the direction of capacity reduction is correct, the short-term oversupply situation is still difficult to reverse, and the price bottoming process may take longer than the market expects.

Taking supply and demand together, the hog market may continue to grind out a bottom. Before the end of October, hog price declines will still outnumber gains, rebounds will be limited, and the probability of prices falling below Yuan 9/kg is increasing; the average price may be lower than in September.

November is expected to stay weak. Secondary fattening is subdued, end-user demand is insufficient, and standard and small standard-weight hog supply is excessive. Localized ASF disruptions persist, and the spread between standard-weight and fat hogs is narrowing. Fewer large hogs are unlikely to lift overall prices.

Therefore, average hog price in November may be flat with October. Ideally, if southern cured-meat production starts and provides a period demand boost, hog prices could be slightly higher, but significant uncertainty remains. Over the medium to long term, before the Chinese New Year and even in the first half of 2027, it will become harder for hog prices to break even, and the industry may remain in a state of prolonged losses. The market's expected improvement in the second half of next year will depend on the pace of capacity reduction and demand recovery.