Industry officials in China anticipate that the country’s pig herds will continue to be in surplus this year, despite government efforts to address oversupply through revised sow targets. The world’s largest pig breeder has been grappling with challenges such as low hog prices, mounting debt, and reduced demand, prompting pig enterprises to sell farms and stakes to alleviate financial pressures. In response to the industry’s struggles, Beijing has adjusted the national target for breeding sow retention to 39 million from 41 million to manage production capacity expansion. However, the inherent productivity of sows and industry reluctance to reduce herd sizes significantly are expected to maintain herd levels at high capacity, consequently keeping prices subdued.
Despite ongoing efforts to reduce sow numbers and optimize farm operations, industry officials acknowledge that surplus remains a concern, necessitating further adjustments to align supply with demand dynamics. Companies are expected to continue streamlining operations through farm sales and cost-cutting measures, particularly focusing on mitigating risks such as African swine fever outbreaks. The industry’s gradual capacity reduction and cautious approach reflect the impact of previous investments and the need for sustainable recovery amid market uncertainties. While the hog market shows signs of transitioning from a bear to a bull market, with consumption and prices gradually improving, the full extent of the market shift is anticipated to become clearer by the end of June, indicating a period of transition and adjustment in China’s swine industry.