New Hope Liuhe will curb breeding sows by end-January to match national capacity control, meaning fewer hog marketings in 2026; the 2-3-year policy is tightly enforced. The price slide stems from last November’s sow peak, better disease control boosting output, and early-year piglet buying/secondary finishing concentrating supply. Jan–Sep hog loss was CNY 180 million (Q3: CNY 230 million); shipments 12.48 million head; costs fell to CNY 12.9/kg in Q3, 12.7 in Sep, 12.5 in Oct, with FCR 2.58, 96% survival, and self-finishing at 35:65. Overseas expansion paused; Vietnam runs as is.
New Hope Liuhe Co., Ltd. told investors at a recent brokerage strategy meeting that, with 2026 approaching, it will “actively follow” national guidance to pare back breeding sow numbers. The company will progressively reduce its breeding sow herd through the end of January 2026, and expects hog marketings next year to decline accordingly. The scale of the reduction will be aligned with the overall targets set by national regulators.
Management said it attended the latest round of enterprise consultations in mid-September and submitted its own capacity-reduction targets in late September. In the months since, the company has been filing monitoring data to the competent ministries at the beginning and mid-point of each month. Beyond the national-level meetings, New Hope has also taken part in provincial sessions in Shandong, Hebei, Sichuan, and Guangxi.
“Overall, we sense strong resolve behind the current capacity-control push,” the company noted. “After leading producers submitted their cut-targets at the end of September, enforcement has been stringent.” It added that capacity control is a two-to-three-year, medium-term policy designed to guide the sector toward steady-state operations and allow diligent producers to earn reasonable margins. “The measures will continue to shape the industry, and we believe they will work.”
Why prices fell — and why the correction may help
New Hope attributed the recent sharp drop in hog prices to three factors. First, the breeding sow herd peaked in November last year, which has now translated into a marketing peak. Second, African Swine Fever (ASF) prevention held up well last year, limiting sow and piglet losses and lifting production efficiency — meaning that peak has fully materialised. Third, a relatively firm post-Chinese New Year market fed optimism for year-end prices, prompting aggressive piglet buying in H1 and a surge of “secondary finishing” cohorts. The result: a heavy, concentrated supply that the market must now digest.
Even so, New Hope sees the down-move as necessary: in the longer run, total supply is relatively fixed and any surplus must be cleared on the sales side. Short-term dumping drives prices down quickly, but accelerates capacity exit. With spot prices near CNY 11.00 per kg (USD 1.53 per kg), the industry is in broad losses; operators unable to withstand the pressure will be forced to sell. “For scale producers with sound cash flow, a few months of turbulence can be healthy in the long run,” the company said.
Nine-month results: lower costs, Q3 hit by price slide
New Hope reported a cumulative nine-month loss of CNY 180.00 million (USD 25.07 million) in its hog business, with a CNY 230.00 million (USD 32.03 million) loss concentrated in Q3 as prices fell rapidly. Versus the same period last year, the company reduced losses by CNY 270.00 million (USD 37.60 million).
Hog marketings for the first three quarters reached 12.48 million head, up 0.51% year-on-year. Quarterly volumes were approximately 4.19 million, 4.26 million, and 4.03 million head, with Q4 expected to edge above Q3.
Despite the Q3 price shock, unit costs kept trending down. Full-cost of market hogs from company-operated sites averaged CNY 12.90 per kg (USD 1.80 per kg) in Q3, about CNY 0.10 per kg lower than in Q2. On a single-month basis, September fell to CNY 12.70 per kg (USD 1.77 per kg), and October improved further to CNY 12.50 per kg (USD 1.74 per kg).
What’s driving the cost curve lower?
- Piglet and feed costs: Weaned-pig costs improved from an average above CNY 350 per head (USD 48.74 per head) in 2023 to CNY 290 per head (USD 40.39 per head) in 2024, then to CNY 260 per head (USD 36.21 per head) in H1 this year, and CNY 240 per head (USD 33.43 per head) in Q3 — laying groundwork for lower finishing costs ahead..
- Efficiency gains: In Q3, feed conversion ratio (FCR) fell to 2.58, more than 0.10 better than in Q1. Finisher survival rose 1 percentage point to 96%.
- Utilising idle assets: Legacy idle capacity from the rapid-expansion years remains a “hard spot.” To dilute fixed costs, New Hope is raising its self-finishing share; the self-finishing vs. contract finishing mix moved from 30:70 to 35:65 in Q3. Costs between the two models are now closer, with limited efficiency gaps.
New Hope’s Binh Phuoc pig farm in Vietnam was completed in 2019
Overseas: Vietnam steady, no scale-up for now
New Hope said it will not expand its overseas pig operations for the time being. While the company has a base in Vietnam, any incremental resources will first go to restarting and expanding domestic idle capacity — subject to policy allowances — rather than to adding overseas hog assets.
According to AgriPost, New Hope operates one large pig project each in Binh Phuoc in southern Vietnam and Thanh Hoa in the north, with combined annual marketings exceeding 500,000 head. The Binh Phuoc project’s fixed-asset investment is close to CNY 800.00 million (USD 111.42 million). Since start-up in December 2019, it has run at full capacity and has been profitable.
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