--- title: "The target for the new round of hog production capacity regulation has been determined, and the capacity reduction in the second quarter is expected to accelerate! The \"pig farming ETF\" is gaining attention" type: "News" locale: "en" url: "https://longbridge.com/en/news/286993747.md" description: "Recently, the domestic live pig market price has entered a phase of sideways fluctuation, with an average price of 9.5 to 9.6 yuan/kg. The government has reduced the breeding sow inventory to promote capacity de-stocking, attracting attention to the breeding ETF. Despite policy support, pig farming still faces challenges such as high feed costs, supply pressure, and insufficient consumer demand, making it difficult for pig prices to rebound significantly in the short term. It is expected that capacity de-stocking will accelerate in the second quarter. Overall market expectations are relatively pessimistic, and the bottom for pig prices may have already appeared" datetime: "2026-05-20T02:36:33.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/286993747.md) - [en](https://longbridge.com/en/news/286993747.md) - [zh-HK](https://longbridge.com/zh-HK/news/286993747.md) --- # The target for the new round of hog production capacity regulation has been determined, and the capacity reduction in the second quarter is expected to accelerate! The "pig farming ETF" is gaining attention In late May, the domestic live pig market recently entered a phase of horizontal fluctuation due to multiple factors, with the average price of live pigs (external three yuan) fluctuating in the range of 9.5 to 9.6 yuan/kg. It is noteworthy that during the narrow bottoming period of pig prices, the secondary market for breeding-themed ETFs has gained significant attention from investors. As of May 19, the livestock breeding ETF from China Merchants (516670) has seen a net subscription of 137 million yuan for six consecutive days. On the news front, officials have recently held a series of industry meetings focusing on "stabilizing the market and exiting inefficient capacity," and have adjusted the normal breeding stock of sows from 39 million to 37.5 million, promoting capacity reduction. At the same time, due to pig prices being in the excessive decline early warning zone, 20,000 tons of pork reserves were restarted last week, providing support for market sentiment. Tianfeng Securities analysis believes that compared to previous capacity adjustments, this policy release is in the early to mid-stage of the capacity reduction cycle, laying the foundation for subsequent reductions. However, the live pig breeding market still faces multiple pressures. First, feed costs remain high, with corn at about 1.18 yuan/jin, and soybean meal prices also at high levels, leading to breeding losses of 250 to 300 yuan per head; high temperatures suppress demand for fattened pigs, and the same price for standard fattened pigs exacerbates the risk of holding back. Second, although supply pressure has eased somewhat, capacity is still in a concentrated release period. Group pig enterprises exceeded their planned output in April, with a planned output of 14.69 million heads this month, a decrease of 3.53% month-on-month, but the output progress is slow, and the phase-specific supply pressure remains. Third, consumer demand support is insufficient, with clear characteristics of the off-season; downstream focuses on reducing volume to stabilize prices, household consumption is generally weak, and alternative consumption is widespread. Shanghai Steel Union points out that short-term pig prices are unlikely to see a significant rebound, with the core constraining factors still being oversupply and weak demand; policy reserves can only play a "bottoming" role and cannot change the short-term supply-demand pattern. From a cyclical perspective, Huayuan Securities believes that the breeding stock has substantially reduced in the first quarter of this year, and pig prices are expected to remain below the cost line in the second quarter, with current industry expectations still being pessimistic, making it highly probable that capacity reduction will accelerate in the second quarter. 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