Giant Chinese pork producers are expanding aggressively to achieve scale economies and exert control over every link in the supply chain. Wringing every penny (or fen) out of unit cost is viewed as the key in this winner-takes-all competition for a market that is not growing. Government authorities ordered companies to scale back capacity last year, but no one dares to let up on their expansion plans.
China's 39 largest hog enterprises (slaughtering 1 million or more hogs) produced 295 million hogs in 2025, accounting for 41% of the national total, according to data from a "high level hog farming forum" released by China Feed Information Net. All but 2 of the 39 largest hog producers increased their output during 2025, many of them by double-digit percentages.
- The million-plus-head companies together increased their hog output by 51 million head (up 21%) in 2025,
- National hog slaughter reported by the National Bureau of Statistics increased by 17 million head (up 2.4%).
- If these numbers are consistent, that means farms selling less than 1 million head reduced their production by 34 million head (down 7.4%).
An increase in the average weight of hogs magnified the increase in pork supply. Despite orders from officials to stop the practice of "second fattening" -- in which companies sell mature hogs to independent farmers who fatten them to even larger weights -- the average carcass weight calculated from official data increased from 81.2 kg to 82.5 kg between 2024 and 2025.
Prices have fallen because "consumer demand is weak and unable to support the current level of supply" according to an article by "Zebra Consumption". Food service businesses are seeing low customer traffic, revenue is sluggish, and the food service sales index was at its lowest level in 16 months during November. The article said pork consumption is undermined by ample supplies of competing proteins such as poultry, beef, and lamb.
National Bureau of Statistics data show that the hog price fell after peaking in August 2024, stabilized during the first half of 2025. The price fell again during September 2025--normally a peak consumption period with reopening of schools and the October 1 National Day holiday. The average hog price at the end of December was down 25% from a year earlier. Prices rebounded slightly in January 2026--leading up to the Lunar New Year holiday--but prices are still lower than during the last 2 years.
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| National Bureau of Statistics raw material prices paid by enterprises. |
The index for hog prices received by Chinese farmers in Q4 2025 was down 23.7% from a year earlier, the largest decline of any farm product category. China's December 2025 CPI report showed that consumer pork prices were down 14.6% from a year earlier, the largest decline of any category.
Three companies competing to be the top producers accounted for the lion's share of China's hog production expansion: Muyuan Foodstuff, Wens Food stuff, and Twins Group. Muyuan is the clear leader, producing 78 million hogs in 2025, up 6.4 million from the previous year. Wens is number-2, producing 40 million head, but it expanded output by 10.3 million in 2025. Twins produced 26.4 million head and increased output by 8.7 million head in 2025. Twins is merging with Zhengbang Technology, another top hog producer that is emerging from bankruptcy.
Many large pig companies had announced plans to curb production capacity as far back as October 2024. Government officials held several rounds of meetings with hog companies in 2025, urging them to cut back on capacity, canceling subsidies, and issuing maximum sow quotas. The number of sows did fall moderately in Q4 2025 and year-end inventory was down 2.9% from a year earlier, but China is still glutted with pork.
Many companies saw flat or declining revenue from hog sales during 2025 due to plunging prices offsetting expanded volume of hog output. Muyuan, for example, reported an 8.9% increase in volume of hogs sold, a 17.3% decrease in average sale price, and a 2.5% decrease in sales revenue year-over-year. Wens had stronger growth in slaughter volume, but its sales revenue was flat. Muyuan and Wens both reported declines in profit during 2025.
A December analysis by Boyar examines the jockeying among top Chinese hog producers by highlighting the strategic maneuvers of Twins Group to challenge the top producers while accelerating the consolidation of China's hog and feed industries.
Central to Twins Group's strategy is its agreement to take over the assets of Zhengbang, a high-flying hog producer that went bankrupt after taking on debt to finance a breakneck expansion that unraveled when hog prices plummeted. After integrating Zhengbang's assets and taking the company public by 2027, Boyar expects Twins to surpass Wens as the number-2 hog producer and possibly challenge number-1 producer Muyuan.
Boyar points to Twins' strategy of low margins and high volume setting off a scramble among companies to gain cost advantages by making investments in raw material procurement and logistics. Boyar notes that Twins has established trading companies and procurement teams and is expected to acquire more assets in grain storage, procurement, trucking, and shipping by utilizing funds from an anticipated IPO. The quest for cost savings motivates companies to expand operations so they can spread fixed costs over ever-larger volumes of raw materials and output, thus keeping unit costs low.
Most of the hog-farming behemoths are feed manufacturers. Muyuan, Wens, Twins, New Hope, Haid, Zhengda (a subsidiary of Thailand's Chia Tai) and Liyuan were all in the top 10 of a ranking of global feed manufacturers. Boyar anticipates that this will also shake up the feed industry as Twins-Zhengbang consolidates control over feed sources and moves to the top of the feed industry rankings.
While New Hope and Haid (海大) are larger feed companies, they are deeply involved in poultry and aquaculture, respectively. Twins is focused on pigs and is the world's largest pig feed producer. Boyar speculates that competitors like Haid will be under pressure to make capital investments in supply chain to match Twins' cost advantage. A focus on pigs is a gamble, though, since consumption of poultry, fish and shellfish is growing much faster than pork.
Boyar sees more consolidation in the livestock industry as Twins leverages capital to pull more small and medium-sized feed mills and hog producers into its orbit through acquisitions, mergers, and collaborative relationships. Mid-size companies like Aonong Biological, the 9th-ranked hog producer in 2023, have been falling behind in part because they can't match the low unit costs of their huge competitors. New Hope has been falling behind in pig production and Boyar thinks they will also lose swine feed customers if Twins is able to use its cost control to cut prices.
Twins' ability to wring cost savings out of its raw material procurement can help it challenge Muyuan's hog production cost advantage -- often attributed to Muyuan's integrated breeding-farrow-to-finish production model and its scale economies. Its digital production techniques, biosecurity system and "company + farmer" model will be promoted nationwide. Farms and feed mills that don't conform will be forced out of the market, Boyar predicts.
Boyar thinks Twins can expand rapidly to challenge Muyuan by using its "company + farmer" model to recruit farmers to fatten pigs. Twins' feed cost reductions can challenge Wens as the "company + farmer" leader and make inroads on Wens' home turf in southern China that has large numbers of independent hog producers.
A December 2025 "White Paper on the High-Quality Development of China's Pig Industry" made a similar point by citing eagerness of companies to achieve scale economies to explain the industry's overcapacity problem. While Boyar expects small and medium-size companies to be forced out, few seem to ever fail. Feed industry reports have complained since the 1990s about the vast number of small companies that won't go away as big companies expand, and chronic excess capacity is the result. The one big casualty of overexpansion -- Zhengbang -- never went away and is now a key player as part of Twins Group.
The amount of investment capital continually poured into this hamster wheel of an industry is surprising. It reflects the large amount of money sloshing around due to capital controls, financial repression in the State-dominated banking sector, and the collapse of the property sector that used to be the main destination for capital investment.
The ability to absorb losses is also surprising. While the "Zebra Consumption" article remarked that "...the traditional hog cycle has been completely disrupted," the long-established pattern in China's hog industry of making lots of money on hogs in 1 year and losing money for 3 years has not really changed yet. This keeps companies in the game waiting for the next big payoff.
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