According to the Zhitong Finance APP, Dongxing Securities released a research report stating that in July 2025, the average prices for piglets, live pigs, and pork will be 35.73 yuan/kg, 14.91 yuan/kg, and 25.37 yuan/kg respectively, with month-on-month changes of -4.09%, 1.72%, and 0.31%. The pig prices in July continued the upward trend from June, then peaked and fell back. After a slight rebound in early August, prices continued to decline, and as of August 11, the national average price for live pigs dropped to 13.82 yuan/kg. Looking ahead, capacity regulation guided by policy will remain the core theme for some time, with expectations for the elimination of backward capacity increasing, leading to significant catalysts in the sector. High-quality capacity in 2025 is expected to maintain profitability due to cost advantages.

The main viewpoints of Dongxing Securities are as follows:

Industry Supply and Demand Performance: July Pig Prices Peak and Fall Back

In July 2025, the average prices for piglets, live pigs, and pork will be 35.73 yuan/kg, 14.91 yuan/kg, and 25.37 yuan/kg respectively, with month-on-month changes of -4.09%, 1.72%, and 0.31%. The pig prices in July continued the upward trend from June, then peaked and fell back. After a slight rebound in early August, prices continued to decline, and as of August 11, the national average price for live pigs dropped to 13.82 yuan/kg.

Supply Side: In July, pig prices were mainly influenced by the supply rhythm. In early July, group farms reduced volume to support prices, leading to a short-term price peak that was difficult to maintain. By mid-month, individual farmers concentrated on selling, highlighting supply pressure, and at the end of the month, large-scale farms controlled volume, stabilizing and slightly increasing prices. Demand Side: In July, due to high summer temperatures, terminal consumption of meat products was weak, and slaughterhouses faced difficulties in sales, making substantial short-term improvements unlikely; secondary fattening only tested prices slightly, providing little support for pig prices.

Trends in Capacity Changes: According to data from the Ministry of Agriculture and Rural Affairs, the number of breeding sows in June was 40.43 million, a slight month-on-month increase of 0.02%, with the growth rate narrowing. From third-party data, the sample data for breeding sows from Yongyi in July increased by 0.52%, while the sample data from Ganglian remained flat month-on-month, marking the first halt in growth since February this year. It is expected that with the continued implementation of policy regulation and the bottoming out of pig prices, the trend of capacity elimination in the industry will gradually become clearer.

Policy Guidance: "Reduce Capacity + Reduce Secondary Fattening + Control Weight"

Since the end of May, intensive policy regulations have been introduced, mainly focusing on "controlling capacity + reducing weight + controlling secondary fattening," releasing policy signals for stabilizing pig prices, which have begun to show initial effectiveness. Since July, environmental protection policies have tightened again, particularly in the southern water network areas, focusing on implementing comprehensive pollution control in livestock and poultry farming. The recent tightening of industry regulation is expected to have a short-term negative and long-term positive impact on the live pig market, potentially leading to a short-term oversupply and price bottoming; in the medium to long term, it is beneficial for the elimination of backward capacity and the stable operation of the live pig market, with expectations for capacity elimination increasing. Once pressure is released, pig prices are expected to see better upward elasticity in the peak season of the second half of the year and next year.

Future Market Cycle Prediction

Capacity regulation guided by policy will remain the core theme for some time, with expectations for the elimination of backward capacity increasing, leading to significant catalysts in the sector. High-quality capacity in 2025 is expected to maintain profitability due to cost advantages. The sector's valuation possesses safety and upward elasticity, and it is recommended to pay attention to leading companies in the industry with high performance realization rates, such as MUYUAN (002714.SZ), along with other related stocks including WENS (300498.SZ) and Tiankang Biological (002100.SZ) Shennong Group (605296.SH) and others.

Sales Data of Listed Companies in July

Average selling price increased month-on-month. In July, MUYUAN, WENS, ZHENGBANG TECHNOLOGY, and New Hope achieved average selling prices for live pigs of 14.30, 14.58, 14.31, and 14.44 yuan/kg, with month-on-month changes of 1.56%, 1.32%, 1.85%, and 1.83%, respectively.

Slaughter volume decreased month-on-month. In July, MUYUAN, WENS, New Hope, and ZHENGBANG TECHNOLOGY achieved sales volumes of live pigs of 750, 316, 130, and 70 million heads, with month-on-month changes of -10.40%, 5.24%, 2.07%, and -2.16%, respectively. The slaughter volume in July saw more declines than increases, and the month-on-month decrease in slaughter volume is related to the good piglet market and high sales at the beginning of the year, leading to a reduction in the slaughter of self-raised fattening pigs.

Average slaughter weight decreased. In July, the average slaughter weights for MUYUAN, WENS, and New Hope were 108.57, 105.69, and 95.81 kg, respectively. Except for Shennong Group and Dongrui Co., Ltd., all companies experienced a month-on-month decrease in average slaughter weight, and the industry trend of reducing slaughter weight continues.

Risk Warning

Risks of price fluctuations in livestock and poultry, expansion of slaughter volume by listed companies falling short of expectations, risks of animal diseases, and companies' cost control not meeting expectations, etc