Recently released financial reports for the first half of 2026 by listed pig companies on the A-share market have revealed that the industry is collectively facing a dilemma of “increased output but decreased revenue.” Despite a slight rebound in pig prices due to recent policy adjustments to reduce production capacity and short-term weather factors, experts are concerned that the changes and pains in China’s pig farming industry will persist under the shadow of stagnant end demand, with no immediate signs of a complete turnaround.
According to a report by “Daily Economic News,” several A-share pig farming enterprises have recently disclosed their production and sales briefings for June and the first half of 2026, showing that major enterprises are exhibiting three main characteristics: “price decline, volume contraction, and revenue decrease.”
The weakness on the consumer side is directly reflected in the bleak financial and sales data of the farming enterprises. In June, the average selling price of commercial pigs fell below the breakeven point of 10 yuan per kilogram. Among them, the average selling prices of commercial pigs for industry leaders, Muyuan Stock, were 9.69 yuan per kilogram, Wens Foodstuff Group was 9.62 yuan per kilogram, New Hope Group was 9.35 yuan per kilogram, and the price of subsidiary of COFCO Group, Xinjiang Muchen, even dropped to as low as 8.88 yuan per kilogram.
Veteran media personality Mike Li pointed out in an interview with Da Ji Yuan that in the pig farming industry, there is a saying that “the breakeven point for pork prices is 10 yuan per kilogram.” He highlighted the grim situation by stating, “Data released by listed pig companies Wens Foodstuff Group and New Hope Group all show figures lower than this breakeven point.”
The Chinese pig industry experienced comprehensive losses as early as 2025. From a cost perspective, industry data shows that “the average breeding cost was around 12-13 yuan per kilogram, and at times, the pig prices fell below this cost, leading to farming entering a loss state.”
With the sharp drop in prices, many enterprises have either voluntarily or involuntarily slowed down the pace of pig sales, resulting in considerable revenue losses. Despite some smaller companies showing a counter-trend growth in production capacity in the first half of the year (such as Lihua Co., Ltd. and COFCO Group), and Muyuan Stock achieving a slight year-on-year increase by selling a total of 38.62 million pigs, the overall industry exhibits a clear feature of “increased output but decreased revenue.”
Under the dual pressure of quantity and price, the revenue for Muyuan Stock, Wens Foodstuff Group, and Tang Ren Shen in June saw year-on-year decreases of 41%, 37%, and 57% respectively. Looking at the overall picture in the first half of the year, companies experienced a collective decline in revenue: Muyuan Stock’s accumulated revenue from selling commercial pigs fell by 29.24% year-on-year, New Hope saw a decrease of 28.78%, Wens Foodstuff Group had a drop of 24.32%, and Tang Ren Shen dropped by 36.52%.
In the past, the Chinese pig market followed the cycle of “supply exceeds demand – prices rise – capacity expansion – oversupply – price decline – capacity elimination” – known as the “pig cycle.” However, the current market is showing an ultra-long period of bottoming out, where the traditional market self-adjustment mechanisms seem to be ineffective.
Li expressed concerns about the malfunction of the market’s self-adjustment mechanism. “This round of the ‘pig cycle’ has been lasting for an extended period, starting from the peak pork prices from 2019 to 2021 till now, still in the bottoming phase! It has exceeded the cyclical regularity of the past 3 to 4 years.”
With the overall macroeconomic weakness and a significant decline in consumer spending, combined with excessive intervention by local governments and long-term overcapacity issues, pig prices have been lingering below the cost line for an extended period.
Li believes that the failure of the “pig cycle” is not merely due to internal industry supply-demand imbalances but is deeply constrained by the harsh external macroeconomic environment.
Li noted in an interview that the fundamental reason for the prolonged bottoming of this “pig cycle” lies in the overall macroeconomic downturn and the sustained decline in consumer spending.
“The ‘pig cycle’ was a rule for pig farming enterprises, but this time, this rule has been broken, the ‘pig cycle’ has failed, and the future prospects of the industry are unpredictable.”
Investigating the root cause of the fundamental shrinkage in demand, he pointed out that due to the continuous fermentation of the real estate crisis in China, with property prices entering an adjustment period, residents are more inclined to save.
“The trend of downgrading consumption has caused people to tighten their purse strings, reducing not only the consumption of dining out but also significantly decreasing high-end business banquets, directly leading to stagnant demand for pork consumption,” Li stated, emphasizing that under the immense pressure of a weak macroeconomic environment, relying solely on supply-side natural adjustments is no longer sufficient to salvage the sluggish market.
Faced with the collective losses and overcapacity in the industry, the Chinese Communist Party has frequently intervened through administrative means to regulate the situation. On June 22, the Ministry of Agriculture and Rural Affairs of the CPC and the National Development and Reform Commission convened a meeting with major pig-producing provinces and large-scale pig farming enterprises, focusing on “strengthening comprehensive regulation of pig production capacity.”
Furthermore, according to a report from “21st Century Business Herald,” provinces like Shandong and Guangdong have successively mandated the reduction of sow numbers by September and strictly controlled the expansion of production capacity, attempting to send signals of policy support.
In addition, due to the recent continuous heavy rainfall in southern China disrupting cross-provincial transportation in the short term, pig prices saw a consecutive increase in early July. On July 9, the national pig price reached 11.36 yuan per kilogram, marking the 11th consecutive day of increase with a cumulative increase of over 20% from the low point in April.
However, these means of forced elimination of production capacity through administrative measures have not fundamentally solved the industry’s dilemma; instead, they highlight the limitations of excessive policy intervention.
The latest report from Tianfeng Securities characterizes the current market situation as a “rebound but not a reversal.” The report warns that secondary fattening (rearing pigs that have reached the desired weight for a further 20-40 days) only represents a temporary tightening of supply. Coupled with the continued growth in feed for piglets during the pre-and post-weaning as well as the breeding phases, the report indicates that there is still significant pressure on future sales and the persistent sluggish consumer end continues to suppress pork demand, considerably affecting regulatory effects.
Li, however, believes that “although pork prices in mainland China have rebounded recently, there is still no turning point.”
While prices may slightly warm up in the coming months, the confidence at the lower levels of the industry chain has been severely damaged. According to Shanghai Steel Union statistics, as of June, the inventory of sows has been decreasing continuously for 11 months since August 2025, with a clear trend; the more indicative price of 7 kg weaned piglets has dropped to 157 yuan per head, reaching a new low for the year.
In conclusion, the challenges faced by the Chinese pig farming industry are no longer just simple supply-demand cyclical fluctuations, but a structural dilemma created by the weak macroeconomy, downgrading consumer spending, and inconsistent official interventions.
Li stated that when traditional rules are broken, the future development of the industry becomes unpredictable. Before the economic fundamentals witness substantial improvements and consumer momentum genuinely recovers, the harsh winter of the Chinese pig farming industry may continue for an extended period.