Hog prices to stay low as strong supply, weak demand persist

As of November 6, 2026, the national average ex-farm price of DLY hogs was Yuan 8.60/kg, below the previous low of Yuan 8.67/kg on April 14. Hog prices have continued to probe lower during the traditional consumption peak season, fully exposing the imbalance between supply and demand.

The current oversupply pattern persists, and the prices are yet to show a clear signal of stabilizing. Some industry views hold that the cyclical low could drop to Yuan 8/kg, and the short-term slump will be difficult to reverse quickly.

The continued weakness in hog prices ultimately stems from fundamental supply and demand pressures.

On the supply side, overall marketing pressure at the farming end remains high. Large-scale breeding enterprises are experiencing sluggish marketing rhythms, with forced holding-back of hogs increasing and slaughter weights continuing to rise.

At the same time, many small and medium-sized farming entities and contract-rearing companies face year-end loan repayment pressure, and tight cash flow is pushing them to actively accelerate the marketing pace. Added to this are African swine fever disruptions in some regions and concentrated releases of frozen pork into the market, further increasing commercial hog supply.

As prices for standard-weight hogs decline, fat hog prices have weakened in tandem, and the standard-to-fat weight hog price spread has continued to narrow. Therefore, the willingness among smaller farmers to sell has increased, forming a new bearish factor.

The secondary fattening segment also shows a pattern of "more exits than entries", with pessimistic expectations suppressing enthusiasm for secondary fattening entry. With no new support coming in, hog stocks continue to flow to market, and supply-side pressure keeps being released.

Weak demand is also a core drag behind this round of peak-season weakness. Pork consumption growth in October 2026 was insignificant, with slaughter volumes falling noticeably. Traditional holidays such as Mid-Autumn Festival and National Day holiday did not drive hog prices higher, with prices "falling on every holiday".

While the market had pinned hopes on demand support from cured-meat preparation and Chinese New year stocking, judging from the current supply-demand balance, hog supply increases during the stocking season have outpaced demand increases, and seasonal positives are offset by ample supply, making it hard to form a strong upward driver.

Traditional seasonal patterns are weakening. Relying solely on cured-meat preparation and Chinese New Year stocking can only bring a phased demand recovery and is unlikely to reverse the oversupply fundamentals. Insufficient demand-side growth leaves prices lacking sustained upward momentum, and peak-season support is noticeably weaker than in previous years.

Looking ahead to December 2026, hog prices are unlikely to see a clear trend reversal, with the market mainly characterized by low-level oscillation and adjustment. Demand from cured-meat preparation and Chinese New Year stocking may lift the price center slightly, but this would only be a mild recovery, with no basis for a substantial rally. Once the peak-season stocking window closes, supply pressure will resurface, and prices may repeatedly probe new lows; the farming end should not blindly bet on a big rally.

Entering the first half of 2027, hog supply pressure will remain, especially in March–April after the Chinese New Year, when mainstream prices will most likely stay in the Yuan 9–10/kg range, with the market still at risk of approaching the current lows again. A trend reversal requires the results of hog capacity reduction to materialize, and there is a lag between capacity adjustment and actual hog slaughter.

Taking into account the current pace of capacity reduction, disease disruptions, and changes in secondary fattening, the market supply-demand pattern is expected to gradually improve in the second half of 2027, with hog prices in Q4 likely to return above the farming cost line, ideally rising to around Yuan 12/kg. However, the clearing of supply pressure is a slow process, and the upward pace will be relatively mild, with a cyclical high perhaps only about Yuan 1/kg above the cost line. Overall, this bottoming-out cycle is relatively long, and a trend reversal will require patience while capacity continues to be cleared.