ShapeShapeauthorShapechevroncrossShapeShapeShapeGrouphamburgerhomeGroupmagnifyShapeShapeShaperssShape

China’s Pork Industry: Looking Forward

by 5m Editor
4 April 2012, at 12:00am

China’s status as a major pork importer will likely continue to grow, forecast Fred Gale, Daniel Marti and Dinghuan Hu in the final part of their report entitled ‘China’s Volatile Pork Industry’ from the USDA Economic Research Service.

China’s tradition of self-sufficiency in pork will be hard to maintain as feed costs rise and as land for expanding farms and processing facilities becomes scarce and expensive. The environmental and food safety impacts of producing large numbers of hogs in China will become more apparent. Interregional shipments of pork within China are limited by lack of reliable transportation and temperature-controlled storage.

Stricter regulatory enforcement in the United States, greater investments in animal housing and manure handling, wider dissemination of technical expertise, and closer coordination between producers and processing companies help US farmers produce pork with less of an impact on the environment, fewer food safety incidents, and fewer disease outbreaks than in China. Demand from China raises the value of variety meats and offal that are not widely used as food in the US market.

Chinese restaurant chains, hotels, and other buyers who demand pork with high and consistent quality are important potential customers for imported pork (Fabiosa et al., 2005). With diversifying consumer tastes and growing segmentation in the market, imported pork can coexist in the Chinese market with domestic grain-fed pork and meat from local pig breeds.21

Strong resistance to pork imports in China can disrupt trade and affect exporters. China lowered tariffs on pork after its accession to the World Trade Organization, but pork imports still face resistance similar to that described by Hayes and Clemens (1997). Evidence of this can be seen among the policy responses listed in the Chinese ‘hog price alert’ programme, which include unspecified ‘limits’ on imported pork to reduce the market supply and ‘encouragement’ of pork exports. When Chinese pork prices were soaring in 2007, officials made announcements to assure the public that China would not import large amounts of pork (Xinhua, 2007).22

In June 2010 (after China lifted its H1N1-related ban on US pork), an article entitled Be on Guard! American Pork’s ’Soybean Appetite’ warned that imports could eat up China’s pork industry if the industry was not protected (Li, 2009). An analyst quoted in the article cautioned readers to ‘Be careful of the trap set by the Americans’” warning that if US pork imports are not limited, the pork industry ‘is likely to repeat the mistakes of the soybean industry with disastrous consequences’.23

Similarly, Liu (2010) reported that Chinese officials were wary of foreign investment in the pork industry because officials feared losing “guidance power” over the industry.

Footnotes

21Many supermarkets and specialty retail shops in China offer pork from local pig breeds. The appeal of this pork, generally sold at premium prices, is its stronger flavour and purported health benefits.

22Articles from official media included assurances that imported pork was purchased mainly by hotels, that imports would not affect the market, and that China has free trade in pork but also a strict inspection and quarantine system.

23This refers to China’s high reliance on soybean imports.

References for Full Report

China Animal Husbandry Information Center. 2010. Jiedu Di Wu Ci Shouchu ‘Zai Du Chu Shou’ Ken Hou Yuanyi (Interpreting Reasons Behind the Fifth Purchase of Reserves). Livestock Feed Trade July 2, 2010.

China Ministry of Agriculture. Livestock Industry Yearbook. Beijing: China Agriculture Press, various years.

China Ministry of Environmental Protection, National Bureau of Statistics, and Ministry of Agriculture. 2010. Di Yi Ci Quan Guo Wuran Yuan Pucha Gongbao. (Communique of the First National Census of Pollution Sources). Posted by Xinhua News Service, February 9, 2010.

China Ministry of Finance. 2007. Ministry of Finance Notice on Rising Pork Prices and Promotion of Healthy Development of the Hog Industry. (in Chinese). No. 221, June 18, 2007.

China National Development and Reform Commission (NDRC)/Ministry of Agriculture. 2008. Declaration of Hog Standardization, Large Scale Farms (Zones), Hog and Poultry Breeding Construction Project Plan. (in Chinese). NDRC Rural Economy No.(2008)524, March 3, 2008.

China National Development and Reform Commission (NDRC), Office of Price. 2007. 2007 Nian Shang Ban Nian Shengzhu Chengben, Shouyi, Jiage Jun Chuang Lishi Xin Gao (Hog Production Cost, Profit and Price for the First Half of 2007—Price Reaches a New Historical High). September 5, 2007.

Coase, R.H. and R.F. Fowler. 1935. Bacon Production and the Pig-cycle in Great Britain. Economica, May 1935, 142-167.

Cui, C. and T. Waters. 2009. Hog Prices Hit 3-Month High as China Vows to End Pork Ban. Wall Street Journal, October 30, 2009.

Dyson, T. 2008. How We’ll Make a Fortune Exporting Pork to China. Daily Wealth, July 30, 2008.

Ezekiel, M. 1938. The Cobweb Theorem. Quarterly Journal of Economics, 53:255-80.

FAO (Food and Agriculture Organization of the United Nations). 2006. Livestock’s Long Shadow: Environmental Issues and Actions. Rome: FAO.

Fabiosa, J., Dinghuan Hu and Cheng Fang. 2005. A Case Study of China’s Commercial Pork Value Chain. MATRIC Research Paper 05-MRP 11, Iowa State University, August 2005.

Feng, Yuhui. 2004. The Hog Market Welcomes Its Longest Profit Cycle in 10 Years. (in Chinese). China Feed Industry Association, unpublished market analysis.

Feng, Yuhui. 2006. An investigation of hog and sow inventory changes in several regions. (in Chinese). China Journal of Animal Science, June 2006.

Feng, Yuhui. 2010. Soozhu China Pork Market Analysis and Warning Report. (in Chinese). Zhong Ke Yi Heng Modern Agriculture Information Institute (Beijing) weekly newsletter, June 2010.

Gao, Ding, Tongbin Chen, Bin Liu, Yuanming Chen, Guodi Zheng and Yanxia Li. 2006. Releases of Pollutants From Poultry Manure in China and Recommended Strategies for the Pollution Prevention. (in Chinese). Geographical Research, 25(2):311-319.

Haas, G.C., and M. Ezekiel. 1926. Factors Affecting the Price of Hogs. US Department of Agriculture Bulletin 1440, 1926.

Han, Jie. 2007. Finance Ministry Allocated 6.5 Billion Yuan in Funds for Sow Insurance and Subsidy (in Chinese). Xinhua News Agency, June 26, 2007.

Han, Jun, and Zhongchun Qin. 2007. Analysis of Our Country’s New Round of Hog Cycle Fluctuations (in Chinese). Special manuscript, State Council Development Research Center, August 2007, and Today’s Animal Husbandry and Veterinary Review, September 2007.

Hayes, D.J. 2010. The Potential Market for US Pork Exports in China. Iowa State University Working Paper, January 13, 2010.

Hayes, D.J. and R. Clemens. 1997. The Chinese Market for US Pork Exports. Iowa State University CARD Briefing Paper 97-BP 14, March 1997.

Holt, M.T. and L.A. Craig. 2006. Nonlinear Dynamics and Structural Change in the US Hog-Corn Cycle: A Time-Varying STAR Approach, American Journal of Agricultural Economics, 88 (1) (February 2006):215-233.

Jiao, Jian and Bo Kou. 2010. Wen Luan ‘Zhu Zhouqi’ (Disorderly ‘Hog Cycle’) (in Chinese). Caijing Magazine No. 13.

Li, Jinling. 2009. Jingti! Meiguo Zhuroude ‘Dadou Weikou’ (Be on Guard! American Pork’s ‘Soybean Appetite.’) Zhongguo Chanjing Xinwen (China Industry and Economic News), May 26, 2009.

Liu, Fang. 2010. Zhengce Zhu PK Shichang Zhu: Wenluan Zhouqi (Policy Hogs Replace Market Hogs: Disorderly Cycle). Dahe Henan Provincial News Network, July 26, 2010.

Liu, Chunfang and Jimin Wang. 2009. Analysis of Recent Fluctuation in Our Country’s Hog Prices and Future Trends. (in Chinese) Institute of Agricultural Economics, Chinese Academy of Agricultural Sciences, Research Briefing No. 218, May 20, 2009, and Agricultural Outlook, May 2009.

Liu, Chunfang and Jimin Wang. 2010. Status Quo and Prospect of Pig Industry Development in China. (in Chinese). Agricultural Outlook, 6(3) March 2010, 28-31.

Liu, Heguang, and Dongsheng Sun. 2010. Development of China’s Pig Meat Consumption and Its Prospect. (in Chinese) Agricultural Outlook, 6(1) January 2010:35-38.

Liu, Yuman, Xiaoqing Yi, Yintong Du and Lei Wang. 2007. Issues of Food Quality and Safety in the Supply of Pork Chain,” Chinese Journal of Animal Science 43(2).

Liu, Zhaozheng. 2009. Study on Current Rural Environmental Problems. Issues in Agricultural Economics, 30(3):70-73.

Nie, Fengying, Ling Dong, and Jieying Bi. 2009. Fluctuation and Cycle of Pork Price in China. Paper presented at International Agricultural Economics Association meeting, Beijing, China, August 2009.

Petry, M. and Lei Zhang. 2009. China’s Corporate Income Tax Exemption for Agricultural Enterprises. GAIN 9003. US Department of Agriculture, Foreign Agricultural Service. January 13, 2009.

Ren, Xiaoming. 2010. 16 Questions on Treatment of Swine Fever (Zhu Gao Re Bing Shiliu Wenti) (in Chinese). Today’s Animal Husbandry and Veterinary Medicine (Jinri Xumu Shouyi), June 12, 2010.

Sun, De, Haiyan Jia, and Guochen Duan. 2011. 2011 Nian Zhu Jia Tui Shou Da Diao Cha (2011 Hog Price Survey). Breeding Hog Information Net, June 2011.

Sun, Luwei. 2010. Sheng Zhude Ying Kui Ping Hengdian Shi Zenyang Huifude (How the Breakeven Point for Hogs Was Reached). Farmers Daily, August 3, 2010.

Van Arsdall, R.N. and K.E. Nelson. 1984. US Hog Industry. Agriculture Economics Report No. 511. US Department of Agriculture, Economic Research Service, June 1984.

Wang, Yan’an. 2009. Yi Tou Zhude Jianyi zhi Lu. (A Pig’s Quarantine Trip). Economic Observer News, May 8, 2009.

Wang, Fanghao, Wenqi Ma, Zhengxia Dou, Lin Ma, Liu Xiaoli, Junxiang Xu, and Fusuo Zhang. 2006. The Estimate of the Production Amount of Animal Manure and its Environmental Effect in China (in Chinese). China Environmental Science, 26(5):614-617.

Woolsey, M., J. Zhang, and K. Rasmussen. 2010. China Livestock and Products Annual Report. GAIN CH10055, US Department of Agriculture, September 24, 2010.

Woolsey, M. and J. Zhang. 2011. US Pork Exports to China on the Rise. GAIN CH11020, US Department of Agriculture, May 9, 2011.

Xiao, Hongbo, and Jimin Wang. 2009. China’s Hog Production Situation in 2008 and Its Prospects” (in Chinese). Agricultural Outlook, June 2009, 16-18.

Xinhua News Agency. 2007. Fa Gai Wei: Zhongguo Bu Keneng Daliang Cong Waiguo Jinkou Zhu Rou (Development and Reform Commission: China Cannot Import Large Amounts of Pork from Foreign Countries), online news report, September 4, 2007.

Yang, Wan. 2010. Zhu Sheng Bing le, Bu Ru Zhijie Deng Si Na Baoxian? (Sick Pigs, Better to Wait For Them To Die to Collect Insurance?). Yangzhou Daily News, July 1, 2010.

Zhang, Xuebiao and Nie Fengying. 2010. Retrospect and Prospect of the Chinese Pork Market (in Chinese). Agricultural Outlook, March 2010, 19-22.

Zhang, Yi. 2010. Hog Farming: If Not the ‘Roller Coaster’ Which Car to Ride? (in Chinese). Peoples Daily, June 27, 2010.

Zhang, Yue. 2010. Xu Qin Yangzhi Ye Chengwe Nongye Wuran Yuan zhi Shou. (Livestock and Poultry Industry Have Become the Leading Source of Agricultural Pollution). Xinhua News Service, December 5, 2010.

Zhou, Wangjun. 2010. Positive Research on Stabilizing the Hog Market (in Chinese). National Development and Reform Commission, May 2010.

Zhu, Zhigang. 2007. Zhu Zhigang Answers Questions on Response to Rising Pork Prices and Promotion of Healthy Hog Industry Development (in Chinese). Ministry of Finance Net, June 22, 2007.

Further Reading

- You can view the full report by clicking here.


April 2012