According to Zhitong Finance APP, entering October, signals of capacity reduction in the hog industry chain continue to increase: on one hand, leading pig enterprises are proactively cutting sow capacity, with piglet prices and breeding profits continuing to hit bottom; on the other hand, breeding sow inventory was still declining in September, but the pace of reduction narrowed compared with August.

Data shows that in September, breeding sow inventories tracked by Yongyi and Ganglian fell 0.52% and 0.86% month-on-month respectively. Combined with cumulative reduction of more than 6.5% in July-August, full-year capacity reduction is expected to reach 10%. As breeding sow inventory has fallen for consecutive months, commercial pig supply is expected to shrink substantially from the second quarter of next year, and an upward inflection point for pig prices is approaching.

Overall, hog prices in the third quarter did not form a trending upward market. Under a pattern of repeated fluctuations, profit pressure on the breeding side remained significant. Data shows that in the second quarter of 2026, the national average live hog ex-farm price was 9.47 yuan/kg, and the third-quarter average rebounded to 10.73 yuan/kg, up 13.31% quarter-on-quarter, but due to the high base in the previous year, it fell sharply by 22.08% year-on-year, and the industry as a whole remained in a weak cyclical range.

Industry estimates show that in the third quarter, the average monthly loss under the self-breeding and self-raising model reached 159.85 yuan per head, clearly indicating deep industry losses. MUYUAN (02714), Zhengbang Technology, Tianbang Food, and Lihua Shares all recorded higher sales volumes in the first three quarters of 2026 than in the same period last year, but all saw sales revenue decline year-on-year. "Higher volume without higher revenue" remains the main tone of the current market.

Among them, MUYUAN (02714) sold 58.73 million commercial pigs in the first three quarters, up 2.45% year-on-year; sales revenue was 76.817 billion yuan, down 25.72% year-on-year. Zhengbang Technology's hog sales volume rose 41.48% in the first three quarters, while sales revenue fell about 5.3% year-on-year.

The latest sales brief shows that in September, MUYUAN (02714) sold about 6.42 million commercial pigs, up 15.24% year-on-year; the average selling price of commercial pigs was about 10.36 yuan/kg, down 19.57% year-on-year; and sales revenue was about 8.520 billion yuan, down 6.01% year-on-year. Wens Foodstuff Group sold 2.9883 million fattening pigs in September, down 10.13% year-on-year; sales revenue was 4.056 billion yuan, down 18.47% year-on-year.

As of the end of September 2026, MUYUAN (02714)'s breeding sow inventory was 2.974 million head, a decrease of 139,000 head from 3.113 million head at the end of June, with a cumulative decline of about 4.5% in the third quarter, completing the phased target of reducing inventory below 3 million head.

Piglet prices are a core bellwether for the industry's future expectations and producers' enthusiasm for restocking. The average monthly piglet price in September was 142.30 yuan per head, down 19.84% month-on-month and plunging 49.32% year-on-year, a sharp decline on both a year-on-year and month-on-month basis.

Going forward, the room for incremental hog slaughter will continue to shrink. Fourth-quarter market conditions will mainly feature structural weak repair, without a trending bull market; over the medium to long term, as capacity reduction continues to materialize, the supply-demand structure of the hog market in 2027 will be further optimized, and a window for industry profit recovery is expected to gradually open.

Great Wall Securities pointed out that in the first half of the year the industry was still in a deep loss range, but signals of capacity reduction have appeared, breeding sow inventory continues to decline, and in the second half of the year Mid-Autumn Festival and National Day stocking, as well as the year-end curing peak season, are expected to drive demand recovery, and pig prices may see a moderate repair. Huachuang Securities said that, referring to multi-dimensional data such as breeding sows and piglets, in terms of timing, the significant effect of supply contraction, or the profitability inflection point for pig prices, is highly likely to appear in 2027Q2, but the sector's current valuation is at a low level, and investors are advised to pay attention to allocation opportunities in the hog sector.

Related concept stocks: MUYUAN (02714): In September, MUYUAN (02714) sold about 6.42 million commercial pigs, up 15.24% year-on-year; the average selling price of commercial pigs was about 10.36 yuan/kg, down 19.57% year-on-year; and sales revenue was about 8.520 billion yuan, down 6.01% year-on-year.

DEKON AGR (02419): In August 2026, the group sold 935,030 commercial hogs, with commercial hog sales revenue of 1.325 billion yuan; the group's average selling price of commercial hogs was 10.94 yuan/kg, up 4.79% from July 2026. For the eight months ended August 31, 2026, the group sold a total of 7,762,930 commercial hogs, with commercial hog sales revenue of 10.740 billion yuan.

COFCO JOYCOME (01610): In the first half of 2026, it achieved operating revenue of 8.736 billion yuan, down 2.5% year-on-year; net loss before fair value adjustment of biological assets was 1.095 billion yuan, compared with a net profit of 203 million yuan in the same period last year. The decline in performance was mainly affected by lower hog selling prices and the company's proactive reduction of volume in the meat import business to control risk.