Pork Prices Hit Lowest Level Since 2019, A New Pig Cycle May Be Gradually Brewing

After the Spring Festival, pig prices continued to decline. According to Souzhu.com data, on March 14, the average price of lean pigs sold nationwide was 10.4 yuan/kg, up 0.1% week-on-week but down 28.4% year-on-year. Currently, pig prices have hit their lowest point since 2019, with some regions falling below 10 yuan/kg.

Losses on the breeding side have further widened. Last week, profit from self-breeding and self-rearing was -283.15 yuan per head, an increase of 45.17 yuan compared to the previous week; profit from purchasing piglets was -118.18 yuan per head, an increase of 59.29 yuan.

Guangfa Securities believes that the current pig prices, at their lowest since 2019 and already below 10 yuan/kg in some areas, may represent the bottom of this cycle. Rising feed costs are further intensifying cash flow pressures across the industry, with most breeding groups facing cash flow losses. The culling of breeding sows is expected to accelerate gradually, and capacity reduction is beginning. Meanwhile, factors such as peak fixed assets, policy regulation of capacity, and bottlenecks in efficiency improvements may support effective capacity reduction in this cycle, with a new cycle gradually taking shape.

In the secondary market, funds have increased their allocation to the pig breeding sector recently. The Livestock Breeding ETF (516670) has experienced net inflows of 49.44 million yuan over six consecutive trading days. Its tracking index, the CSI Livestock Breeding Index, covers the entire pig breeding industry chain, with the top ten constituents including leading companies such as Haid Group, Muyuan Foods, Wen’s Food, Zhengbang Technology, Plum Biological, and New Hope. Notably, according to the fund contract, the management fee for the Livestock Breeding ETF (516670) is 0.2% per year.

Risk reminder: Funds are subject to risks; investments should be made cautiously.