In early April, news that "Hainan live pig prices fell below 4 yuan/jin" exploded in the industry. Below 4 yuan is not a price trough—it's a price abyss. Vegetables more expensive than meat, pork cheaper than greens—this isn't irony, it's the reality of China's pig farming industry in 2026.
But this article doesn't want to stop at sighs. It wants to do something more valuable: figure out how this "unprecedented" hog cycle happened; and whether, against the backdrop of deflation, it hides a cyclical opportunity worth waiting for.
I. The Historical Textbook of Hog Cycles
The hog cycle is the most classic cyclical phenomenon in China's agricultural product market. The essential logic is simple: hog prices rise → pig farming becomes profitable → expansion → oversupply → prices fall → losses → capacity elimination → insufficient supply → prices rise again. A complete cycle typically lasts about 23 months.
Looking back over the past two decades, this pattern has repeated:
In 2019, Muyuan Shares' stock price rose more than 5x from its low point.
II. This Cycle: The Textbook Failed
After ASF, the industry formed two consensuses: scale farming would dominate the market, cycles would become more stable; the era of high hog prices was over, entering a "thin profit period." The consensus got the direction right but the magnitude wrong.
Large-scale farming companies generally expanded, breeding sow inventory recovered rapidly, and by the end of 2025 still stood at 39.61 million head—far above the control ceiling. More critically, production efficiency underwent a qualitative change: the industry average PSY increased from about 18 in 2018 to 24.34 in 2025, with leading companies reaching above 29. This means: even if the number of breeding sows doesn't grow, capacity continues to increase.
This is the core structural change of this cycle—"sows don't increase, but supply does." Technological progress offset inventory reduction, and traditional signals of cycle bottoms repeatedly failed. Muyuan, Wens, and others, even when losing money, can survive for several quarters through financing channels and supply chain integration. The willingness to actively reduce capacity is extremely low—whoever exits first loses market share.
Thus, the average 23-month down cycle in history has lasted over 40 months in this cycle, with no clear bottom signal yet.
III. This Isn't an Ordinary Cycle Extension, It's Structural Imbalance
The essence of this hog cycle is a super destocking cycle of structural oversupply叠加 with long-term demand contraction.
The long-term change on the demand side is even more alarming: pork's share of meat consumption fell from 62.1% in 2018 to 57.9% in 2025. The substitution effect of beef, lamb, poultry, and aquatic products continues to strengthen. This is a long-term trend independent of hog price fluctuations.
Its bottom won't be simple supply-side clearance, but requires waiting for more thorough capacity reshuffling—either a large-scale disease shock or a wave of bankruptcies from long-cycle losses.
IV. Deflation Mega-Cycle: The Macro Mirror of the Hog Cycle
Over the past three years, China's CPI has remained low, and PPI has been negative for a long time. Real estate stepping down, manufacturing overcapacity, consumption willingness contracting—three threads intertwine to form a deflationary spiral: insufficient demand → falling prices → deteriorating corporate revenue → investment contraction → employment pressure → further demand contraction.
Monetary policy is loose, but credit transmission is blocked; fiscal policy is exerting force, but effects take time. Falling hog prices aren't an isolated case: steel, cement, photovoltaics, lithium carbonate—almost all industrial and agricultural products are experiencing similar destocking pains. The extreme case of the hog cycle is just a mirror of the deflation mega-cycle.
V. Cyclical Opportunities: How to Judge, When to Act
Having said all this, the purpose isn't to spread pessimism. On the contrary, it's to find where the real opportunities are.
First, the opportunity is real.
Every deep destocking brings high concentration on the supply side. After small and medium farmers exit, leading companies' market share increases, and pricing power strengthens. History repeatedly proves: laying out leading hog stocks at the industry's most pessimistic times often yields several-fold returns. Currently, leading companies like Muyuan and Wens are at historically low valuation levels.
Second, how to find bottom signals.
Judging hog cycle bottoms has several key indicators:
Currently, the pig-grain ratio has fallen to 4.23:1, below the first-level warning line, and policy stockpiling is already expected. But the more critical capacity clearance signal hasn't appeared yet—breeding sow inventory is still above 39 million head, declining slowly.
Third, timing under the deflation mega-cycle.
The bottom of this hog cycle is most likely in the Q4 2026 to Q1 2027 window. For investors, now isn't the time for heavy positioning, but for building observation positions and continuously tracking key data. The real buying point often appears when "everyone knows the industry is terrible but still sees no hope"—that's the final despair period at the cycle bottom, and the best window for contrarian investors.
Conclusion: Finding Cycles in Deflation, Finding Rhythm in Cycles
The reason this hog cycle is "unprecedented" isn't because it's worse, but because it's more complex. It's叠加ed with capacity rigidity after scaling, structural shocks from technological progress, long-term shifts in consumption trends, and the macroeconomic deflationary backdrop.
But the essence of cycles hasn't changed: capacity clearance → supply contraction → price rebound. This law is only delayed, not absent.
Under the deflation mega-cycle, cyclical opportunities won't disappear, they'll just be harder to judge and require more patience. Hog cycle, photovoltaic cycle, steel cycle... every deep clearance is the prologue to the next round of recovery. The only difference is: do you chase in when everyone is optimistic, or start laying out when everyone is in despair?
Data sources: Ministry of Agriculture and Rural Affairs, Wind, public market materials | April 7, 2026