China’s New Hope Group is reshaping its pig farming strategy as 2026 approaches. The company announced plans to gradually reduce its breeding sow inventory before the end of January, aligning operations with national policy guidance.
Hog slaughter volumes will also be scaled back next year. The reduction will match regulatory targets, underscoring New Hope’s cautious approach to balancing production with policy requirements.
Losses narrow despite market pressures
The pig farming business incurred a cumulative loss of around USD 25.3 million in the first three quarters. This was driven largely by a USD 32.4 million Q3 setback as hog prices fell sharply.
However, compared to last year, losses decreased by around USD 38 million. This improvement highlights the impact of cost reductions and operational adjustments, even amid volatile market conditions.
Slaughter volumes hold steady
Despite financial pressures, slaughter volumes showed resilience. New Hope slaughtered 12.48 million hogs in the first three quarters, a modest year-on-year increase of 0.51%.
Quarterly volumes were approximately 4.19 million, 4.26 million, and 4.03 million respectively. The company expects Q4 slaughter volumes to rise slightly compared with Q3.
Breeding costs trend lower
Breeding costs continued to decline, easing pressure on margins. New Hope’s average cost had already decreased to USD 1.79/kg in September and further dropped to USD 1.76/kg in October.
Regional performance varied. Costs in the western region dropped to USD 1.69/kg, while the central-southern region decreased to USD 1.74/kg. In northwestern Shandong, Shaanxi, and Guizhou, costs fell further to USD 1.68/kg.
Lower breeding stock and feed costs drove the decline. In Q3, total costs decreased by around USD 0.23/kg compared to the same period last year. Breeding stock costs dropped by USD 0.085/kg, while feed costs also fell by the same margin.
Weaning costs contributed significantly, falling from USD 49.40 in 2023 to USD 33.88 in Q3 this year.
New Hope is adjusting its pig farming to meet policy goals and cut costs. These changes aim to reduce losses and prepare the business for a steadier 2026.