High-tech Hog Companies Enjoy Dip in Feed Prices

Corporate behemoths are gaining a commanding position in China's hog farming sector. In 2024 twenty companies listed on Chinese stock exchanges produced a combined 168 million hogs, 24 percent of China's national hog output reported by the National Bureau of Statistics. The publicly listed hog farming companies had a combined market cap of 615 billion yuan (about $85 billion) in February. These companies claim to have transformed hog farming with their high-tech operations, but they haven't eliminated the volatility that stems from movements in feed prices and profit margins.

Just 3 of those companies account for most of the growth in China's corporate hog sales. Muyuan Foods stands out with hog output growing from 3.1 million to 71.6 million between 2016 and 2024. Wens Foodstuff lost its place as top hog producer despite nearly doubling its hog sales from 17 million to over 30 million head between 2016 and 2024. New Hope's output grew from 1.7 million head to 16.5 million head during 2016-2025. A second tier of companies producing 2-to-6 million head have also grown, but they are far behind the top three. 

Compiled from company reports.

The growth of these companies is surprising in view of the historical dominance of "backyard" hog farms in China. China's disastrous African swine fever (ASF) epidemic in 2018-19 was a catalyst for growth in corporate hog farming, as the epidemic forced out many small and medium-sized farms while policies to restore pork production favored large-scale farms. Agriculture Ministry data show the number of mega-farms producing 50,000 head or more grew from 443 to 849 between 2018 and 2021.

Chinese officials love big companies because they believe the companies are easier to control and have the financial resources to pursue the magical high-tech future envisioned by communist leaders. A string of articles last week lauded high-tech applications made by pig farming companies. 

In a celebration of its anniversary last week, Muyuan Foods proclaimed great success in sterilizing barns to keep them free of disease, controlling odor, and pursuing the agriculture ministry's goal of eliminating soybean meal from animal diets. An executive said Southeast Asian counterparts have been impressed with China's ability to control African swine fever, Muyuan built a high-tech farm for a Vietnamese company, and Muyuan exported deodorization and sterilization equipment to Southeast Asia. 

New Hope Group's executives told China Securities Journal their company is using manure ditch cleaning robots that have autonomous navigation that no longer need to be operated by remote control. Handheld gadgets can weigh pigs, avoiding the need to drive pigs to be weighed on a scale. Another sensor can count the number and weight of live pigs or piglets based on their size and shape without manual counting. One scientist identified as both a New Hope employee and director of a Ministry of Agriculture lab described the use of artificial intelligence in breeding selection, automatic adjustment of ventilation and cooling, as well as choosing the optimal time and weight for releasing pigs to the market. 

Wens Foods says it has collaborated with Huawei since 2021 on application of robots, AI, cloud computing, internet of things, etc. in livestock farming. 

Chongqing Daily described a tech company in Chongqing's Rongchang district as the "brain" of the industry that provides systems for "pig farms of the future." A manager explained that digital solutions using sensors and constant monitoring of the environment, temperature, and feed are superior to traditional manual control based on the "feeling" and "visual observation" of farmers or employees. The article explained that eliminating employees with digital gadgetry allows one worker to raise 3000 hogs, whereas traditional methods required 3 to 5 workers to raise 1000 hogs.

The large hog companies regularly announce reductions in production costs, giving the impression they are making great strides in efficiency. Several years ago, the breakeven price for hogs was widely believed to be about 15 yuan per kg. Muyuan claims to have reduced its production cost to 12.5 yuan per kg this year, and New Hope Group claims to have reduced its cost to under 13 yuan. However, the reductions in cost may actually be due to falling grain and soybean meal prices that have cut feed costs.

A Shandong Province cost of production survey of common farms reported a breakeven price of 13.07 yuan per kg for a 120-kg farrow-to-finish hog in the first quarter of 2025. The Shandong data show that feed comprised over 60 percent of hog production costs (965 yuan of the cost of 1523 yuan per head). 

Agriculture ministry data show that the average cost of hog feed in China has fallen about 15 percent since its last peak in October 20223. All hog producers enjoyed fat profits during 2024 as hog prices rose about 50 percent to their peak of 20.35 yuan in August while feed prices were plummeting. Muyuan and Wens declared two dividends last year. 

Ministry of Agriculture and Rural Affairs market prices.

Profit margins stimulated expansion during the second half of 2024 that drove hog prices down to just 14.6 yuan in June 2025. Muyuan Foods--the largest producer--had the biggest spike in sales.

Hog sales from company reports.

Comparing monthly sales by the top 3 companies with measures of aggregate industry output indicates that expansion in hog production during the second half of 2024 was broad-based. Sales by the top 3 companies was still only about one-third of "above-scale" slaughter (reported by the ag ministry) and about 16 percent of monthly slaughter reported by the National Bureau of Statistics. All three series indicate an expansion of hog output during the second half of 2024, but the increase by the top 3 was only a small fraction of the run-up in industry-wide hog slaughter reported during the second half of 2024. 

Company performance reports; Ministry of Agriculture and Rural Affairs slaughter by "above-scale" facilities; quarterly National Bureau of Statistics quarterly slaughter averaged over 3 months.

Still, not all of the leading companies expanded last year. New Hope--mainly a feed manufacturer--suffered financial losses in 2024, and its hog production fell. New Hope claims to have regained profitability in 2025. Several others reported big declines in hog sales last year, including COFCO Joycome--the one state-owned hog company--and Tianbang and Aonong--two other high-flyers in recent years.

It's worth noting that not all hog farming companies are unstoppable juggernauts. Yangxiang, a company that wowed foreign visitors with its pioneering multi-story hog complex about 8 years ago, faded into the background after its IPO was undermined by unusual dividend payouts and a shady customer base. Chuying, one of the rising stars in 2018 imploded that year and tried to pay back investors with hams. Zhengbang was the number 2 producer in 2021, but its production has plummeted since declaring bankruptcy a couple years ago. Wens foodstuff was hit hard by the ASF epidemic (and by an avian influenza outbreak about 12 years ago) before recovering robustly post-ASF.