The national average price of piglets in China fell to its lowest levels since at least February 2019 as the government’s efforts to control capacity become stricter and farmers are cautious about restocking amid continually low hog prices.
Piglet prices last week were 22.29 yuan per KG, down 2.7% compared to the week before, and down 39.6% year on year. Live hog prices were at 10.06 yuan per KG, down 31.1% year on year.
Losses are estimated at 431 yuan per hog, compared to profits of 23 yuan per hog at this time last year.
Last week, the central government held capacity reduction meetings with officials from 9 major pork-producing provinces as well as leading hog breeders.
Large hog breeders are expected to take the lead in reducing capacity, culling weak piglets, reducing the slaughter weight of hogs, and preventing the practice of ‘secondary-fattening’ of feeding hogs to heavier weights, according to the announcement from the Ministry of Agriculture.
Provincial governments are required to strengthen their oversight and supervision of the industry and are required to announce provincial-level plans to reduce capacity in the sector.
Unofficial reports also mention that the central government will start sending inspection teams, which will issue warning letters to provinces that haven’t sufficiently reduced production.
China’s central government has been focused on reducing capacity for one year now, but the reduction in capacity has been relatively slow. The recent meetings indicate a harder line by the central government to rein in overcapacity.
The main focus continues to be on the breeding sow population. The current target from the central government is 37.5 million, but following this meeting, provinces are required to have their own versions of the national policy. This includes targets for provincial capacity and articulated policy responses if the levels are either too high or too low.
Other ways to control capacity are now receiving more attention. This includes reducing slaughter weight to 120kg and stopping ‘secondary-fattening’. Some local governments have already started on this and will only issue paperwork for hogs over 100kg if they are being sold to a slaughterhouse. This prevents farmers from selling hogs to a ‘secondary-fattening’ farm to further increase their weight.
Culling weak piglets is also a new policy focus that hasn’t been mentioned in previous government announcements related to capacity control.
The firmer tone from the central government has weighed on the stock prices of large producers, with some seeing their share prices fall to multi-year lows.
Hog sales of 15 large publicly traded firms totaled 80.0 million hogs in the first five months of 2026, up 6.7% year on year. But these firms continue to see large losses, with efficient producers like Muyuan reporting a cost of production of 11.7 yuan per KG in April, compared to an average sales price of just 9.45 yuan per KG in April, and 9.8 in May.
The central government continues to focus on reducing capacity in the hog industry and is now ratcheting up the pressure on companies and provinces.
Feed production has been strong in 2026 due to this overcapacity, but a faster reduction in the herd could weigh on soybean demand.