Live Hog Futures Main Contract Hits a New Low as Industry Capacity Control Continues

Securities Times Reporter Zhao Liyun

On March 19, the main futures contract for live pigs in the domestic market declined again. At the close of trading, the live pig contract 2605 was quoted at 10,335 yuan/ton, with a intraday low of 10,250 yuan/ton, hitting a new low since listing.

Live pig spot prices down 30.6% year-on-year

In the spot market, according to SouPig.com data, on March 18, the average price for lean pigs nationwide was 10.07 yuan/kg, up 0.03 yuan/kg from the previous day’s 10.04 yuan/kg, a 0.3% increase; but compared to 14.51 yuan/kg a year ago, it has fallen by 4.44 yuan/kg, a 30.6% decrease year-on-year.

Shanghai Ganglian Data shows that since 2026, live pig prices have generally experienced an initial rise followed by a decline, continuing to hit new lows. In mid to early January, prices briefly surged to 13.15 yuan/kg. After the Spring Festival, due to oversupply and weak demand, prices plummeted sharply. By mid to late March, the average price of external three-way crossbred pigs nationwide had fallen below 10 yuan/kg, reaching the lowest point since 2019, with a cumulative decline of over 24% this year, leading to deep industry losses.

Against this backdrop, there are reports that on the 19th, relevant departments held a meeting requiring several pig enterprises to report their annual production targets. Based on the completion of reducing the breeding sow inventory for the year, they will also cut the annual slaughter volume.

“According to the Ministry of Agriculture and Rural Affairs and Zhuochuang Information’s data on breeding sows, pig prices are expected to start rising in the second half of 2026. However, from a policy perspective, capacity is still expected to be further regulated, and breeders may adjust the breeding sow ratio to control pig output, thereby reducing corporate losses,” said Zou Yingji, a pig analyst at Zhuochuang Information.

Herd size at historic high

Zou Yingji stated that over the past five years, the trend of pig market prices has experienced two small cycles. The impact of pig diseases on the market has gradually weakened, and profit-driven capacity changes have caused price fluctuations, with the amplitude gradually narrowing. Prices are currently in a state of oscillating decline. Due to capacity release, the industry’s breeding scale is at a historic high. The low pig prices are mainly due to the previous high level of breeding sows, which correlates with high slaughter volumes. Additionally, February and March are typically off-peak seasons after the Spring Festival, leading to further price declines.

Yuan Chunlan, an analyst at Shanghai Ganglian, said that the current domestic live pig market shows a significant oversupply pattern, with the industry overall in a phase of concentrated supply pressure release. From a capacity standpoint, the breeding sow inventory remains above regulatory targets, and with continuous improvements in breeding efficiency, the industry’s overall supply capacity remains high, supporting current and future slaughter volumes.

Mysteel data monitoring shows that in key provinces, large-scale breeding enterprises’ pig slaughter plans in March increased by 17.63% month-on-month, with a clear acceleration in slaughter pace. Coupled with the large stock of heavy pigs held by farms earlier, the ongoing clearance of large pigs further enlarges the effective market supply, and short-term pig prices still face strong supply pressure.

Ongoing losses in breeding enterprises

Since late January this year, the pig breeding sector has been in continuous loss. Data from Zhuochuang Information shows that in mid-March, the average loss per pig was about 225 yuan.

“Losses in the breeding sector do not necessarily mean pig prices have bottomed out, but current prices are already relatively low, and further price drops are unlikely to support increased demand. Even with moderate market sales, the willingness of breeders to lower prices is limited. On March 17, the nationwide average price for lean pigs monitored by Zhuochuang was 10.08 yuan/kg, leaving little room for further decline,” said Zou Yingji.

Regarding the overall price trend for pigs this year, Qu Guona, an analyst at Shanghai Ganglian (300226), predicts that pig prices in 2026 are expected to show a pattern of initial decline followed by a rise, with oscillations. Since the first half of the year will still be a capacity release period combined with weak demand, prices will remain low and industry losses will deepen. After the third quarter, if capacity reduction becomes evident and consumption gradually recovers, prices are likely to stabilize and rebound. In the fourth quarter, seasonal factors will support a stronger trend, helping to repair previous losses and further increase prices.

Cinda Futures’ latest analysis suggests that pig prices still need a longer time to find a bottom. Data shows that at the end of January 2026, the national breeding sow inventory was 39.58 million, a slight month-on-month decrease. The pace of sow capacity reduction is significantly slower than in 2021 and 2023. Additionally, the number of piglets born in sample enterprises at the end of January was 5.7804 million, still increasing month-on-month, indicating ongoing supply-side uncertainties in the second half of 2026.