Looking Far Ahead: Pig Prices Fall to Nearly 7-Year Low, "Breaking Before Building" May Turn Crisis Into Opportunity

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Senior Analyst Wang Yanan of Zhuochuang Information on the Pig Industry

【Introduction】Recently, pig prices have continued to decline, reaching the lowest point since 2019 in March. The main reason for this drop is the ample supply caused by earlier expansion, coupled with the current off-season for consumption, leading to a clear market oversupply and thus low pig prices. Due to a sufficient number of breeding sows since 2025 and rising PSY and MSY indices, the theoretical supply of pigs over the next 10 months may be relatively abundant. The pig market has entered a phase of “breaking to rebuild,” with the key being the adjustment of breeding sow and pig inventories.

2. Pig prices in March 2026 hit the lowest point in nearly seven years

In 2026, pig supply continues to increase, leading to a downward trend in prices. Although supply increased in March, demand remains low due to the off-season, making the supply-demand imbalance more pronounced than in the first half of January and February, pushing pig prices to a low level. According to Zhuochuang Information monitoring, on March 12, 2026, the nationwide average price for lean pigs was 10.08 yuan/kg, the lowest since 2019; the previous low of 9.92 yuan/kg in May 2018 was the lowest in nearly 15 years. Currently, pig prices are only 0.16 yuan/kg above that level.

3. Ample capacity and the continued bearish impact of pig supply on the market

The most direct and fundamental reason for falling pig prices is the number of pigs being sold, which is directly affected by the number of breeding sows and total pig inventory. Data from 196 large and medium-sized sample enterprises monitored by Zhuochuang show that the breeding sow inventory in 2025 first increased, then decreased, and stabilized. The theoretical pig slaughter volume from March to December 2026 corresponds to the breeding sow inventory from May 2025 to February 2026. Breeding sow inventory increased in May-June 2025, then declined from July to September, with the decline temporarily stopping afterward. Correspondingly, the theoretical pig slaughter volume increased in March-April 2026, decreased in May-July, and then stabilized. The breeding sow inventory in February 2026 was only 3.95% lower than the peak in June 2025, still not reaching the goal of capacity reduction.

From the perspective of pig inventory data, the total pig stock shows a general increasing trend, which does not fully align with the breeding sow inventory trend, as there has been no sustained decline. This is related to improved utilization of breeding sows and rising PSY and MSY indices. Based on current inventory data, pig supply is likely to be relatively abundant over the next six months.

Overall, the ample capacity and slow pace of capacity reduction mean that pig supply may still be oversupplied, exerting significant bearish pressure on future market prices.

4. Other factors have short-term rather than long-term impacts on pig prices

Terminal demand is highly seasonal, with peak seasons in autumn, winter, and before the Spring Festival, and off-seasons at other times. From March to August, demand is generally weak with limited fluctuations, and pig price changes are mainly driven by supply. As demand improves from September, the influence of terminal demand on prices will increase.

Additionally, recent frequent short-term secondary fattening operations are another market uncertainty. Data from Zhuochuang show that in early March, only 13.69% of pigs flowed into secondary fattening channels, providing limited support for prices. Historically, short-cycle secondary fattening can support prices during the rearing phase but exert downward pressure at slaughter. With ongoing policies restricting secondary fattening and farmers becoming more rational, the impact of secondary fattening on prices is expected to weaken further.

Winter pig diarrhea and other diseases caused a slight decrease in pig inventories around January, temporarily tightening supply around July, providing some short-term support for prices.

5. There is still significant room for capacity reduction in the pig market

In a context of ample capacity and no major pig diseases, a true market turning point is unlikely. Currently, with no substantial capacity gap and no demand growth, the first half of the year is likely to see a cycle of losses, capacity reduction, rebounds, holding, price drops, and losses again. Short-term supply pressure remains high, and the market faces ongoing challenges. To break this cycle, the market needs to enter a real capacity reduction phase; the speed and extent of breeding sow inventory decline will be key variables determining the next pig cycle’s height and duration.

As pig prices continue to decline and losses deepen, farmers may be forced to reduce production and lower breeding sow inventories, which could support a longer-term upward trend. Although the impact of secondary fattening is weakening, market expectations of a reversal remain, and low prices may trigger early secondary fattening, disrupting short-term supply rhythms. The collision of these sentiments will likely increase market volatility at the bottom. The situation may improve in the second half of the year but still remain in a phase of ample supply. After this phase, a genuine trend reversal may occur, revitalizing the pig market.