Pig prices hit a new low in over ten years. Under the support of stockpiling, when will the market trend reverse?

At the start of April, pig farmers’ moods sank to the bottom of the valley once again, along with pig prices. On April 2, the national average price for three-way outcross live hogs fell to 9.26 yuan per kilogram, down another 0.09 yuan per kilogram from the previous day, setting a new low since June 2010. Converted, one jin (half a kilogram) of live hog was still under 4.7 yuan. Many long-time producers admitted that they had not seen such a bleak market in a long time. And just as the entire industry was being pressured to the point of running out of breath by continuously falling pig prices, the steady-market signals released in succession by official sources have also become the most talked-about topic in the breeding community right now.

Since late March, hog prices have entered a sustained downward channel, and the chill in the market has grown stronger. In late March, the national transaction average price of lean-type hogs already fell below the 10 yuan per kilogram threshold. One jin of live hog was under 5 yuan, and hog futures’ main contract also hit a historic low since it was listed in January 2021. Data monitored by the Ministry of Agriculture and Rural Affairs show that in the third week of March, the hog prices in all 30 monitored provinces across the country fell across the board; the average hog price was 11.05 yuan per kilogram, a year-on-year decline of 28%, hitting a new low since June 2018. As of the end of March, the factory-gate price index for lean carcass was also down to its lowest point in the same period in 2024. Continuously falling hog prices have pushed the entire industry into deep losses. This not only affects the livelihood of every producer and pig farm, but has also entered the level-one early-warning range for excessive declines in hog prices—one that is tied to stable, sound development of the entire hog industry.

I. Official action in succession,

making clear a stance to stabilize the market as a backstop

To maintain the steady operation of the pork market and better play the role of central reserves in market regulation, the Ministry of Commerce, the National Development and Reform Commission, and the Ministry of Finance recently formally initiated a new round of central-reserve frozen pork purchasing and storage collection operations. This is also the second time in about a month that officials have stepped in to launch storage operations again since March 4. On April 1, the Huachu website released an official notice, clarifying that on April 3, a rotation and purchasing-and-storage transaction for central-reserve frozen pork will be carried out. The transaction size for this storage invitation-and-bid is 10,000 tons. The Ministry of Commerce also made clear that it will continue to closely monitor changes in the pork market, strengthen analysis and judgment of market trends, and work with relevant departments to do a good job in reserve regulation, fully ensuring the steady operation of the market.

Meanwhile, major state media have also been speaking up intensively in recent days, continuously focusing on the pork price situation as it keeps falling—something that is not commonly seen in industry development. From March 27, when Xinhua published 《How to promote supply-demand balance by reducing pork prices》, to late March, when CCTV Finance, CCTV Tianxia Finance, and China National Radio all repeatedly focused on the status quo, reasons, and industry dilemmas behind the decline in pork prices, and then to March 30, when Xinhua published the commentary 《To stabilize hog prices, there must be backbone and aggregated strength》—this dense stream of authoritative voices, at its core, all points to the hog-price situation that has already fallen into the level-one early-warning range. The purpose is to guide market expectations through authoritative voices and inject confidence in stable development into the entire industry.

II. Divergent market responses,

boosting sentiment can’t change the underlying supply-demand fundamentals

The dual positives of the official storage operations taking effect and the media speaking intensively have also brought a direct reaction in the capital market. On April 2, stocks related to pork rallied across the board. Several stocks saw sharp gains during the trading session; among them, Jixing Agriculture and Animal Husbandry hit the daily limit. Shennong Group and Huatong Co., Ltd. rose more than 7% during the session. Industry leaders such as Muyuan Co. and Wen’s Co. also rose to varying degrees. The capital market’s favorable tone, in essence, reflects clear statements at the policy level, bringing the market favorable expectations that pig prices will gradually stabilize.

But unlike the capital market’s heat, the response in the live hog spot and futures markets has been relatively muted—this is also the most direct feeling for many frontline breeding practitioners. For those of us at the breeding end, it’s clear that this 10,000-ton storage scale, given the current large market supply pressure, can bring only limited practical uplift. More than anything, it serves as support for sentiment. After entering April, monthly culling plans at large-scale farms have increased somewhat. Combined with pre-holiday stocking demand ahead of the Qingming Festival, the culling volume at the breeding end has also seen a small incremental increase. The broad supply-and-demand fundamentals have not changed. This is the core reason why, after the storage news took effect, spot pig prices did not show a clear rise. Based on the current market situation, sentiment in the industry is mixed—some are watching for stability, others for downside. In the short term, pig prices will most likely continue the trend of choppy consolidation and bottoming out. For subsequent changes in the market, the key still lies in watching the culling schedule of large-scale farms.

III. The core of a market reversal,

ultimately depends on real changes in capacity

Many colleagues are asking: the storage operations have been implemented—does that mean pig prices will rise right away? The answer is quite clear. This 10,000-ton storage operation is a sign of the country’s firm stance to protect the stable development of the hog industry and backstop the market, injecting confidence into a depressed industry. But it is not a signal flare that the market trend is reversed from here.

As pig producers, we all understand that whether hog prices rise or fall is ultimately determined by the supply-demand relationship. In the short term, policy control can stabilize market sentiment and prevent prices from falling too much, but it cannot fundamentally change the current market pattern of ample supply. What can truly stabilize pig prices and bring them back up, pulling them out of a prolonged low valley, has never been short-term sentiment support, but rather a real decline in hog production capacity. Only when the supply of hogs in the market truly decreases and the supply-demand relationship achieves a genuine rebalancing will pig prices see a fundamental improvement.

The pig-breeding industry already has a distinct cyclical pattern: there are peaks and there are troughs. Right now, we are in the most difficult stage of the cycle. The government’s storage-and-market-stabilization actions and authoritative voices help us hold the bottom line for industrial development, and also make us realize that the industry’s steady development always has policy backstops, so there’s no need to fall into excessive panic. But facing a market that keeps bottoming out, we must maintain a clear understanding of the market’s underlying fundamentals, not let short-term market fluctuations throw off our rhythm, and not lose confidence in the future. Cycles always come around again; supply and demand will eventually return to balance. Doing solid pig-breeding work today and waiting calmly for the fundamentals to improve brought by the industry’s capacity adjustments is the steadiest way for us to respond to the cycle.

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