In 2025, profitability for self-breeding and self-raising operations remained relatively stable in the first half of the year, followed by a decline in the second half before rebounding. After a rapid rebound in late December 2025, the self-breeding model saw a slight return to profitability in mid-January. Based on the latest production capacity data, the 2026 hog market may still follow a pattern of falling first and then rising, but the turning point may be delayed again, and the upward momentum in the second half may be limited. Influenced by hog prices, profits from self-breeding and self-raising may hover near the break-even point, potentially returning to profitability by year-end.

1. The 2025 self-breeding and self-raising model maintained profitability for an extended period

The 2025 hog market will experience fluctuating declines with a late-year rebound. Projected annual average hog prices are 13.75 RMB/kg, while the self-breeding and raising cost line stands at 13.15 RMB/kg. Profitability in self-breeding and raising is closely tied to hog prices. In 2025, profits will gradually shrink until losses emerge, with losses narrowing by year-end. The average profit per head for self-breeding and self-raising in 2025 was CNY74.96, a year-on-year decrease of CNY 272.45 per head, representing a 78.42% decline. The peak profit occurred in early January at CNY 385.42 per head, while the lowest point was in mid-October at CNY -311.81 per head.

2. Will both breeding income and costs remain low in 2026?

In 2026, profits from self-breeding and self-raising pigs will likely continue to be primarily influenced by hog prices. Additionally, factors such as average transaction weight and feed costs will also impact profitability.

Breeding income is projected to decline by 11.57% year-on-year in 2026. Farming income is primarily influenced by hog prices and average transaction weight. Market trends suggest ample hog supply in 2026, potentially leading to year-on-year price declines. Since breeding sow inventory impacts hog output ten months later, the breeding sow inventory from March 2025 to February 2026 will determine 2026's hog supply. According to Information's monitoring of sample enterprises' breeding sow inventories, the breeding sow inventory began to decline in July 2025, with consecutive monthly decreases exceeding 1.00% for three months. However, the subsequent decline was relatively limited. Therefore, hog prices in the first half of 2026 may show a fluctuating downward trend, with room for growth in the second half. Nevertheless, due to the slow pace of capacity reduction, the recovery of hog prices may be relatively gradual. Considering average hog transaction weights, Information projects hog farming revenues in 2026 will peak before the Spring Festival, rapidly decline to low levels afterward, and then fluctuate upward in the second half.

Hog farming costs in 2026 are expected to show minimal annual fluctuations, declining by 4.00% year-on-year. Based on projected prices for key hog feed ingredients like corn, soybean meal, and bran, feed costs may fluctuate downward in 2025. Combined with average transaction weights and feed-to-meat ratios, per-head feed costs are expected to decline year-on-year. Factoring in labor, utilities, disease prevention expenses, and piglet rearing costs, overall hog farming costs may show a year-on-year decrease.

3. Will 2026 see marginal profits for self-breeding and self-raising hog operations?

Both breeding income and costs have room to decline, but the drop in income will exceed the reduction in costs, resulting in a negative impact on breeding profits. Profits from self-breeding and self-raising hogs may decline in 2026, with an annual average expected to range between -50 to CNY -70 per head, representing a year-on-year decrease of CNY120 to 140 per head.

Looking at the specific trend, hog prices may be relatively high in January-February 2026, with profits from self-breeding and self-raising hogs potentially reaching annual highs. February could see prices peak for the year, with per-head profits around CNY50. However, as the off-season demand period arrives and hog supply increases, prices are expected to decline. Prices may fall to their annual low in May-June, with losses per head reaching CNY130-140. In the second half of the year, as supply gradually decreases and demand improves, hog market conditions may see a slight recovery. Losses from self-breeding and self-raising operations may lessen, and by year-end, profitability may return.

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