"15th Five-Year Plan" kickoff, the agricultural sector welcomes a "policy + cycle" dual-driven boost

This is the starting year of the “Fifteenth Five-Year Plan” period. The “Fifteen Five-Year Plan” planning outline clearly calls for accelerating the modernization of agriculture and rural areas, and steadily promoting the overall revitalization of rural areas. Based on comprehensive professional analysis, with policy support boosting sentiment on top of the hog cycle, the long-term value of the agriculture sector may be worth paying close attention to. (Reference: National Radio and Television Administration / China National Radio Network, “TAO explains the effectiveness of the ‘22 measures for agriculture and forestry’ issued by the State Council Office—five-year results,” 2026.3.25)

Precise policy efforts make the pathway for high-quality agricultural development clear

In terms of the “three rural issues” (agriculture, rural areas, and farmers) deployments in the “Fifteen Five-Year Plan” planning outline, it focuses on three key words—“efficiency, benefits, and performance.” It fully reflects the requirements of high-quality development and runs through all aspects of agricultural and rural modernization.

 Key word 1: Efficiency

The “Fifteen Five-Year Plan” planning outline explicitly calls for improving agricultural labor productivity and the contribution rate of technological progress, and placing strengthening agricultural science and technology and equipment support in a more prominent position. Analysts say that its purpose is to drive China’s agriculture to transform from a traditional extensive development model to a development model mainly driven by technological innovation, achieving changes in the drivers, quality, and efficiency of agriculture.

 Key word 2: Benefits

The “Fifteen Five-Year Plan” planning outline emphasizes overall coordination in developing science and technology-driven agriculture, green agriculture, quality agriculture, and brand agriculture. Analysts say its purpose is to change the development model of the past that simply pursued output, and shift to a model that gives equal weight to both output and benefits, and integrates production with ecology, so as to effectively enhance the benefits of agricultural development.

(Reference: Beijing Youth Daily, “New goals for the ‘Fifteen Five-Year Plan’ and ‘three rural issues’: proactively adapt and make steady progress,” 2026.3.15)

 Key word 3: Performance

The “Fifteen Five-Year Plan” planning outline emphasizes that the work on the “three rural issues” should be treated as a top priority. It calls for deep learning and application of the experience from the “Million-Project Program,” improving the policy effectiveness of benefiting farmers and promoting prosperity. It further strengthens the foundation of agriculture and rural areas and enhances the quality and effectiveness of development. Analysts say that in the future, efforts should focus on speeding up the process of addressing shortfalls and weak links in agricultural and rural modernization, and on planning a set of major policy measures and major engineering projects that broadly benefit people and have strong targeted impact.

(Reference: Guangming Daily, “Start by working on the ‘three rural issues’—a new picture of the overall revitalization of rural areas,” 2026.3.9; People’s Daily, “How can the policy effectiveness of benefiting agriculture, benefiting rural areas, and benefiting farmers be further improved,” 2026.1.19)

Overall, from “comprehensively promoting rural revitalization” in the “Fourteenth Five-Year Plan” to the “Fifteen Five-Year Plan” planning outline draft’s systematic requirements for improving long-term mechanisms, narrowing the urban-rural gap, and building an agricultural powerhouse, the shift in the “three rural issues” work toward a new stage of improving quality and efficiency is reflected. Against this backdrop, the agriculture sector’s long-term investment value may be worth watching. (Reference: The Paper, “The Fifteen Five-Year Plan, Fifteen Questions丨How can agricultural and rural modernization run at ‘full speed’,” 2026.3.10)

Tighter regulation of hog production capacity—hog cycle uptrend may be approaching

The hog sector is an important component of the agriculture sector. Recently, some institutional research reports stated that due to ample supply and a decline in demand after the holiday, hog prices have fallen rapidly in recent days. Looking ahead, the institution expects that under the dual drivers of market-based measures plus policy-driven capacity reduction, hog market conditions will remain promising in the future. (Reference: China Citic Securities, “Hog industry conditions will be promising from the fourth quarter of 2026 to 2027,” 2026.3.16)

1) Hog production capacity regulation is tightening, and capacity reduction may accelerate

On March 19, relevant departments held a special meeting with hog production enterprises. They guided major hog-raising companies to report their annual production targets and proactively reduce their promised production targets, relieving market supply overcapacity pressures from the source. It is expected that the regulatory target for the reasonable ongoing stock of breeding sows will be further lowered to 36.5 million head. (Reference: Hualong Securities, “Hog prices keep falling—when will a weak trend hit bottom?,” 2026.3.23)

The data show that at the end of 2025, China’s inventory of breeding sows was 39.61 million head, down 2.9% year over year. This was 101.6% of the normal ongoing stock of 39 million head. Compared with the previous peak of 43.9 million head (end of December 2022), the reduction was about 4.29 million head. Analysts say that the sequential decline in breeding sow inventory is a necessary condition for hog prices to bottom out. Based on factors such as breeding profits, they estimate that in March 2026, the reduction in breeding sows may accelerate. (Reference: Galaxy Securities, “Hog prices continue to fall & losses worsen—capacity reduction is underway,” 2026.3.24)

2) National hog prices continue to hit new lows; improvement may be possible in the second half of the year

China Swine Farming Network monitoring data show that as of March 25, the national ex-farm average price for “outer three-yuan” hogs had already fallen to 10.16 yuan per kilogram, and it was about to drop below the psychological support price of 10 yuan per kilogram. This set a new seven-year low since 2019. It is less than 0.3 yuan away from the historical lowest value of 9.92 yuan per kilogram on May 9, 2018. Industry monitoring indicates that current hog prices have already fallen below the industry’s breakeven line. Professional analysis shows that after the holiday, pork consumption quickly entered the lightest season of the year, with demand weakening, which has kept hog prices probing downward. In the short term, hog prices will still operate under pressure; but as the supply-demand situation improves, hog prices are expected to improve in the second half of the year. (Reference: Sina Finance, “New low for nearly seven years—hog prices fall to just over 5 yuan per jin; experts: hog prices will still face pressure in the short term, but may improve in the second half of the year,” 2026.3.26)

In addition, from a valuation perspective, Wind data show that as of March 26, 2026, the PE-TTM valuation of the CSI Agriculture Theme Index (000949.CSI) was 21.60 times, at the 20.76% percentile over the past decade, and at a relatively low historical percentile. It may be within a relatively reasonable allocation range. (Data source: Wind; statistical range: 2016.3.27 to 2026.3.26)

Driven by the dual forces of the “Fifteen Five-Year Plan” policy dividend and a reversal of the hog cycle, the agriculture sector may have a relatively high investment value for cost-effectiveness at present. The Yinhe Agricultural ETF (159827), which closely tracks the CSI Agriculture Theme Index, may help investors efficiently capture the allocation opportunity brought by this round of “policy + cycle”!

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