CITIC Futures: Supply and demand are loose, pig prices are relatively weak

Supply: In the short term, pig sources are abundant, and the buying and selling of live pigs is smooth. In the medium term, slaughter pressure continues; in the first half of 2025, the nationwide stock of breeding sows remains at a high level. From January to February 2026, Steel Union’s sample points show an increase in the number of piglets born. Based on the breeding cycle, pig slaughter will be sufficient in the first half of 2026.

In the long term, according to the Ministry of Agriculture’s sow data, from July to December 2025, the breeding sow inventory decreased month-on-month, and the industry began to reduce capacity; however, after breeding profits recovered in January 2026, the capacity reduction process was hindered. Steel Union and Yongyi monitoring both show a month-on-month increase in breeding sow inventory in January 2026. In February 2026, breeding profits turned back to losses; Steel Union monitoring shows a month-on-month decrease in breeding sow inventory, while Yongyi monitoring shows a month-on-month increase in breeding sow inventory.

In March, relevant departments held a meeting. The meeting required each pig enterprise to reduce its annual slaughter volume on the basis of reducing the number of breeding sows with a reduced capacity. Currently, the relative price of culled breeding sows is relatively high, and the production-reduction process is not smooth; it is necessary to continue to pay attention to the pace of destocking.

On the demand side, consumption is weak, and the price spread between fat and lean hogs continues to narrow. On the inventory side, the average weight of live pigs has increased, and frozen product inventories have increased.

In the short term, upstream live pig slaughter volume and body-weight inventories are both relatively high; downstream consumption has entered the off-season, so live pig demand decreases, supply increases while demand decreases, and hog prices run on the weak side. In the medium term, the breeding sow inventory in the first half of 2025 remains high, and the increase in MSY leads to a larger number of piglets born in January and February 2026. Based on a six-month fattening cycle, it is expected that the pressure on commercial hog slaughter before August 2026 will remain high, and the downward cycle will continue.

In the long term, according to Ministry of Agriculture monitoring, the nationwide breeding sow inventory continued to decline in the second half of 2025, but sow productivity is still increasing. Taking everything into account, we expect that by the end of the third quarter of 2026, the hog slaughter volume may begin to gradually decrease, and hog prices may resume a moderately upward trend. (China CITIC Futures)