A bloody pig cycle, unprecedented

Deep, long, and painfully clear: this is no ordinary trough

China’s pork cycle has plunged into an unusually long and deep downturn, squeezing small farmers and testing policy tools. It has been reported that hog prices fell to an eight‑year low by late March, with some provinces such as Hainan seeing prices under 4 yuan per jin (1 jin = 0.5 kg). The pig‑to‑grain ratio — the industry’s classic profitability gauge — hit about 4.23:1 on April 4, well below the 5:1 early‑warning line. Short answer: many producers are losing money, and the slump shows few signs of a quick end.

Structural supply and demand shifts are widening the gap

Why is this cycle different? Several structural forces are at work at once. Big integrators have dramatically improved productivity: it has been reported that PSY (pigs weaned per sow per year) rose from about 17.4 in 2017 to 24.3 in 2025, and leading groups like Muyuan (牧原) have reported costs near 12 yuan/kg versus the industry average above 13 yuan/kg. At the same time, feed costs — corn and soybean meal — have been rising for months, and feedmakers including New Hope (新希望) recently raised prices, further squeezing margins. Demand is shifting too: Chinese diets are diversifying and beef, mutton and fish increasingly substitute pork, trimming pork’s consumption share from roughly 62% in 2018 to 57.9% in 2025.

Pain is concentrated among small producers; policy moves aim to blunt the fall

The result is brutal for small and medium farms: with average costs above market prices, many are “selling a pig at a loss or keeping one and losing more,” reportedly lament farmers on social media. The state has intervened — the National Development and Reform Commission (发改委) announced a second round of central frozen‑pork purchases — but such measures are designed to support a floor, not immediately reverse a structural imbalance. Pork is also a direct driver of China’s CPI and food‑security policy, so authorities face a tough tradeoff between stabilising prices and avoiding long‑term market distortions.

Outlook: slow adjustment, concentrated winners and many losers

Historically the pork cycle follows a “boom → expansion → glut → clearing” pattern, but this episode’s downleg has already outlasted prior averages by years. Supply contraction (measured by breeding sow numbers) has been slow even as output in 2025 reached a record 59.38 million tonnes, reflecting efficiency gains and stronger performance from large firms. The short‑term picture is more of protracted pain than a V‑shaped recovery: if capacity continues to be slow to clear and consumption substitution persists, consolidation will accelerate — rewarding large, capitalised integrators while forcing more smallholders out of the market.