Pork prices have risen for 11 consecutive sessions—Is it time to enter the "pork sector"? Institutions are highly divided.

The continuous rise in pig prices has brought the previously quiet livestock sector back into focus for investors. However, institutions are divided over whether this round is a cyclical reversal or just a phase-driven rebound caused by supply mismatch.

According to data from "Pig Hao Duo" website, on July 9th, the national live pig price reached 11.36 yuan/kg, marking the 11th consecutive day of increases, with the cumulative rise exceeding 20% from the April low. The strong rebound in pig prices is particularly eye-catching against the backdrop of sharp tech stock corrections, and a new market meme has emerged on social media: “Time will prove the pig module. Stand inside the pig, don’t just stand here like a pig.”

However, the strength in spot prices has not translated into continued gains for livestock stocks. On July 9th, stocks such as New Hope, Zhengbang Technology, and Shengdeng Development fell by over 1%. Muyuan Co., Wens Co. saw small declines, while the Livestock Breeding ETF (China Merchants Fund) dropped 0.35%. Prices went up, stocks corrected first, indicating that the market is reassessing the sustainability of the rebound.

The institutional divide centers on one issue: Has the reduction in supply been enough to support a new pig cycle? If yes, the sector's current low valuation may present a left-side entry window; if no, secondary fattening, weak consumption season, and large-scale farm supply may push pig prices back to the bottom.

Behind 11 consecutive rises: Supply contraction is the main line, weather disruption is a catalyst

The core logic of this round of pig price rebound remains on the supply side.

Industry insiders note that structurally tight supply of large fat pigs is an important driver for short-term price increases. Large pigs over 130 kg are increasingly priced above standard pigs; southern trucks concentrated on shipping pigs north, big pigs in the Northeast are nearly cleared, showing tight marketable pig supply. Enthusiasm for secondary fattening has increased, combined with breeder reluctance to sell, jointly compressing short-term supply.

Regional factors have amplified price elasticity. Continuous heavy rain in South China disrupts inter-provincial transportation; local tight pig supply in Guangdong supports high prices, serving as a short-term catalyst for this rise.

Production capacity continues to contract. According to Shanghai Ganglian statistical data, in June, the inventory of breeding sows declined 0.98% month-on-month, marking 11 consecutive months of reduction since August 2025. Price for 7kg weaned piglets dropped to 157 yuan per head, an annual low, reflecting continued weak restocking willingness. On the policy side, provinces like Shandong and Guangdong are advancing goals to reduce breeding sow numbers and strictly controlling new capacity, sending clear policy support signals.

Losses rapidly narrowed, but consumption remains constrained

The most direct impact of the rising pig price is a significant narrowing of breeding losses.

Industry estimates show self-breeding/self-raising losses have fallen to 90–130 yuan per head from 305 yuan per head on July 3rd, a substantial improvement. The piglet market has also seen partial recovery, with the average price for 15kg piglets rebounding to 302 yuan per head, and small households' enthusiasm for secondary fattening increasing.

However, the demand side has not strengthened in tandem. Continuous hot weather suppresses pork consumption, terminal sales are flat, and slaughter enterprises have growing price-suppression attitudes. The futures market also shows subtle change, as main live pig contracts recently have slightly corrected, indicating rising short-term profit-taking pressure.

There are also deferred pressures on the supply side. Pigs entering for secondary fattening earlier may be released together later; large-scale pig enterprises plan to increase July deliveries month-on-month. With prices rising, breeders may be more willing to sell at high prices, possibly marginally easing the tight short-term supply situation.

"Rebound not reversal" camp: Secondary fattening only pushes supply forward

Tianfeng Securities’ latest viewpoint characterizes this round as “rebound, not reversal.” Its report points out, secondary fattening only tightens supply temporarily; the standard pigs retained now will be released together later, increasing pressure on future supply. Growth in feed for teaching/preserving pigs year-over-year also suggests pig deliveries will remain high six months later.

Tianfeng Securities expects pig prices may correct by 0.3–0.5 yuan/kg, then stabilize in mid-to-late July, with a possible second rebound wave. But from a cycle perspective, the institution expects the real inflection point for the pig cycle in 2027, and the current stage still represents a left-side entry window rather than a right-side confirmation stage.

Hua’an Securities is similarly cautious. Its report judges that the lowest pig prices may have appeared in April 2026, the industry has entered the ninth pig cycle, but the short-term sharp rebound is mainly due to insufficient supply of fat pigs, expanded price spread between standard and fat pigs, active secondary fattening, and breeder reluctance to sell. The number of newborn piglets suggests adequate pig supply from July to October; as secondary fattening inventory increases, pig prices are expected to decline, bottoming again later. The industry is expected to see losses throughout 2026, continuing to contract.

Kaiyuan Securities also thinks rebound sustainability still needs observation. Its report points out, demand support is clearly inadequate; as of July 3rd, slaughter numbers have fallen to 148,700 head. The expanding price gap between standard and fat pigs strengthens reluctance to sell and secondary fattening expectations, but this is more a “time-for-space” game, not a true supply-demand gap. If weak consumption persists, combined with increased large-scale farm supply, the height of pig price rebound may be limited.

"Inflection point approaching" camp: Deep losses and policy are reshaping supply

More optimistic institutions believe that cycle bottom signals have become clearer in this round.

Guangfa Securities, in its industry commentary, judges that the pig price bottom is past, and the cycle's turning point is near. The core logic is that deep losses in June, combined with continuing capacity control policies, are pushing ongoing reduction of breeding sow inventory, improving supply-demand. The institution believes that Q2 of 2026 may be the bottom of pig prices for this cycle; a cyclical turning point is expected in the second half of the year.

Huayuan Securities also thinks the cycle reversal may be near. Its report says industry breeding sow numbers have dropped to the baseline of 37.5 million; strict enforcement of policies may accelerate the cycle turning point. The report notes the pig price bottom is likely set; supply pressure remains but is marginally easing, and the annual supply pace may show fluctuations from weak recovery to strong contraction.

Changjiang Securities gives a more optimistic view from a cash flow perspective. Its report says current per-head loss is 218 yuan, far above 2023's bottom of 138 yuan; piglet prices have hit new lows, and deeply discounted eliminated sows are signs of a bottom reversal. Continued losses will squeeze capital and drive further capacity reduction.

Investors aren't buying the 11-day price rise, but the reduction expectation

In the secondary market, the core trading variable for the livestock sector is not the daily pig price, but whether capacity reduction will continue.

Tianfeng Securities reports current industry difficulties are more severe than in 2023. Peak per-head loss in this cycle is 461 yuan, above 2023's bottom of 307 yuan; average per-head loss is around 218 yuan, also above the previous cycle's 138 yuan. Listed pig companies’ asset-liability ratios are up overall, making funding tighter than in the previous cycle.

Valuation is also a core argument for bulls. Several brokerages note that livestock sector valuations have fallen close to pre-2018 upward levels, and pig companies’ per-head market values are at historic lows. Hua’an Securities points out that leading pig companies have repurchased and increased holdings, showing confidence in long-term value.

Capital is also moving in early. Statistics show the Livestock Breeding ETF (China Merchants Fund) has seen a net inflow of 175 million yuan over six consecutive days. Info shows the ETF’s management fee is 0.2%/year, with over 60% pig stock, making it a highly pure “pig farming ETF.”

Whether or not you enter “pig module” depends on your tolerance for left-side volatility

The current 11-day pig price rise has indeed improved breeder cash flow expectations and heightened market focus on the pig cycle bottom. But institutional opinion remains divided: optimists value deep losses, policy, and capacity reduction; cautious analysts focus on deferred supply, weak demand, and large-farm delivery pressure.

For investors, “standing in the pig module” is more like a left-side trade, not an established trend trade. If capacity contraction continues deepening and policy control keeps landing, sector valuation still has room for repair; if the pig price rebound mainly comes from secondary fattening and short-term transportation disruptions, subsequent supply replenishment may bring volatility in price and stock price.

In other words, the 11-day pig price rise has brought renewed attention to the pig cycle, but whether it’s truly reversed needs more confirmation from capacity, delivery, and consumption data. The key now isn’t chasing market memes, but judging whether this round of supply clearing can persist beyond short-term rebounds.

Risk Warning and DisclaimerThe market has risks; investment demands caution. This article does not constitute individual investment advice, nor has it considered individual users' unique investment objectives, financial situation, or needs. Users should consider whether any opinions, viewpoints, or conclusions in this article are suitable for their particular situation. Investing accordingly is at your own risk.