Shennong Group has maintained average PSY at around 31 since Q2 2026, with some farms reaching 35, but the company is now deliberately limiting further gains to protect piglet health, uniformity, and finishing efficiency. Its full hog production cost stood at CNY 12.00/kg (USD 1.67/kg) in the first half, while July FCR reached 2.46. Despite its top-tier full production cost, low hog prices in Yunnan led to a first-half net loss of CNY 810 million (USD 112.81 million).
China-listed pig producer Shennong Group, a “top performer,” has become one of the first among its peers to push average PSY (pigs per sow per year) beyond the 30 mark. Now, however, the company says it is deliberately putting the brakes on further growth.
AgriPost learned from Shennong Group that, after average PSY reached 30 in the first quarter of 2026, the figure has remained at around 31 in each month since the second quarter. At some of its farms, PSY has even reached 35.
Yet the company said it is now actively restricting further increases.
“If PSY gets too high, it will inevitably affect the health or uniformity of the weaned piglets, which can then lead to lower production efficiency during finishing,” the company said.
Shennong Group still has considerable room to increase PSY if it chooses not to impose controls, said Board Secretary Jiang Hong during a conference call on the company’s 2026 interim report.
Under the current environment of low hog prices, however, keeping some weaker piglets has little practical value.
“Simply pursuing PSY growth is not what our group wants,” Jiang said.
He added that, once other aspects of production are well managed, Shennong Group will still have the conditions to raise PSY again in the future. That could come from both tapping further genetic potential and improving management, with the ultimate aim of continuously lowering production costs.
For the first half of 2026, Shennong Group reported a full hog production cost of CNY 12.00/kg (USD 1.67/kg). That places the company in the industry’s top tier, although its cost advantage is less pronounced than its lead in PSY.
A major reason is geography. Feed raw material costs are relatively high in Yunnan, where the company operates.
Shennong Group’s full hog production cost was CNY 12.30/kg (USD 1.71/kg) in 2025. Jiang said that, excluding a CNY 0.20/kg (USD 0.03/kg) increase in feed costs, the company has actually reduced costs by CNY 0.50/kg (USD 0.07/kg) so far this year.
The company remains confident of reaching its full-year cost target of CNY 11.50/kg (USD 1.60/kg), assuming raw material prices remain at last year’s level.
Shennong Group’s latest production figures for July show PSY remaining at 31 and full hog production cost at CNY 12.00/kg (USD 1.67/kg).
Among its other 2 core indicators, weaning cost stood at CNY 248 per piglet (USD 34.54), while feed conversion ratio (FCR) reached 2.46.
Jiang stressed that there is still room for costs to decline over the next 2–3 years, although the reductions are likely to come in steps rather than in a straight line.
Measures such as breeding stock improvement require time to take effect. After one round of optimisation is completed, costs will remain on a plateau before declining again. Should raw material prices fall, the company would have additional room to reduce costs.
The rollout of an information management system is also expected to improve labour efficiency and expense control, Jiang said. At the same time, the company’s futures team is gradually maturing, with the accuracy of its assessment and analysis of market fluctuations having improved substantially.
Shennong Group sold 1.724 million commercial hogs in the first half of 2026.
Hog prices in Yunnan were also relatively low. The company’s average selling price was about CNY 9.90/kg (USD 1.38/kg), down roughly 32% year-on-year.
That contributed to a net loss of CNY 810 million (USD 112.81 million) for the first half of the year. The second-quarter loss was about CNY 160 million (USD 22.28 million), a sharp reduction from the previous quarter.
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