China’s hog sector crisis weighs on future corn and soybean meal demand

China’s hog sector has remained loss-making for seven consecutive months, weakening the outlook for feed demand, particularly for corn and soybean meal. According to SunSirs, small and medium-sized farms are under the greatest pressure, while large integrated producers are better positioned to withstand a prolonged period of weak profitability.

In April, losses at self-breeding and self-fattening operations approached 420 yuan per head. Meanwhile, prices for 7 kg piglets fell to multi-year lows of 130–160 yuan per head, with some regions reporting prices below 130 yuan, compared with production costs of around 230–280 yuan at large-scale farms.

Oversupply remains the main problem. High sow inventories in previous periods continue to support large numbers of market-ready pigs, while rising PSY productivity has partly offset the reduction in breeding sow numbers. At the same time, pork consumption remains weak, partly due to competition from poultry meat.

Low piglet prices and poor profitability prospects are prompting fattening farms to delay restocking and leave part of their capacity idle. This creates risks of weaker medium-term demand for compound feed and, consequently, for corn and soybean meal. In the short term, feed demand is still supported by the large existing hog population and high slaughter volumes.

Prolonged losses are also accelerating the culling of low-productivity and aging sows, although the impact of herd reduction will not be immediate. Market estimates suggest a lag of around 10 months between lower breeding sow inventories and reduced hog supplies, meaning a more noticeable recovery in prices and profitability is unlikely before 2027.

Tags: China, corn, soybean meal, pig