The domestic hog market showed signs of a short-term recovery in late August, with hog prices moving higher amid improving seasonal demand. In contrast, the piglet market continued to weaken, with prices falling sharply in some regions. This created a notable divergence between rising hog prices and declining piglet prices, a pattern commonly seen near the bottom of the current hog cycle.
According to monitoring data from China’s Ministry of Agriculture and Rural Affairs, the national average hog price reached RMB 11.52/kg in the third week of August, up 2.6% from the previous week. Hog prices increased across all 30 monitored provinces. Meanwhile, the national average piglet price stood at RMB 21.75/kg, edging lower month-on-month and falling 34.6% year-on-year, highlighting a growing gap between short-term market conditions and expectations for the months ahead.
The recent rebound in hog prices has been primarily driven by a gradual recovery in seasonal demand.
As of August 25, the national average price of three-way crossbred hogs stood at approximately RMB 11.13/kg, representing a cumulative increase of more than 7.54% from the beginning of the month.
With the easing of high summer temperatures, fresh pork consumption began to recover. At the same time, demand related to back-to-school gatherings, weddings and banquets, and catering services for returning workers provided additional support. These factors contributed to higher slaughterhouse operating rates, with average daily slaughter volumes at sampled enterprises increasing both month-on-month and year-on-year.
The improvement in downstream demand has provided direct support for standard hog prices, and the short-term upward trend has gradually taken shape.
While hog prices have recovered, the piglet market has continued to weaken, with price declines reaching as much as 57% in some regions.
Market data show that the price of 7-kg weaned piglets climbed to around RMB 258.57 per head in late July. Prices then declined for three consecutive weeks, with the market average falling to approximately RMB 163.33 per head by late August. In some areas, actual transaction prices dropped to just RMB 140–160 per head.
Market activity has remained subdued, while farmers have shown limited willingness to purchase piglets. Some producers who restocked at relatively high prices earlier in the cycle are already facing losses. The piglet trading sector as a whole has entered a loss-making phase, with the maximum loss reportedly reaching around RMB 130 per head, further discouraging restocking.
The fundamental reason for the divergence between hog and piglet prices lies in the difference between short-term spot market conditions and expectations for future supply and demand.
The current rise in hog prices is largely a seasonal demand-driven recovery. Piglets, however, represent production decisions for hogs that will typically enter the market four to five months later. As a result, farmers are increasingly concerned about potential oversupply in the future and are therefore reluctant to expand their herds aggressively.
At the same time, the price of cull sows has fallen 23.7% year-on-year, while the discount applied to breeding sows continues to widen. These developments suggest that the industry is accelerating the elimination of inefficient production capacity.
From a medium- to long-term perspective, persistently low piglet prices may discourage new restocking and accelerate the reduction of the breeding herd. A gradual contraction in future hog supply could eventually create a foundation for a recovery in hog prices.
However, risks remain. The low-priced piglets purchased during the current period are expected to enter the market mainly from the fourth quarter through early next year. The resulting increase in slaughter supply could put downward pressure on hog prices during that period.
Overall, industry capacity reduction is gradually taking place, but a fundamental reversal in the supply-demand balance will likely require more time. Producers are advised to manage their marketing schedules carefully, closely assess forward-looking market risks, and avoid aggressive restocking based solely on short-term price movements.
