What do we know about the Chinese market, and what can we expect in 2008?

"We know their domestic herd has fallen due to disease, and we know they can’t increase significantly as they have here in the US, and we know the industry in China is in quite a significant structural adjustment. What we don’t know is the real size of that decline in the herd," said Fiona Boal, Executive Director of Rabobank's Food and Agribusiness Research in North America.

China is dealing with historically high pork prices, because the Chinese pork inventory is barely keeping up with demand, said Boal. Pork prices have risen 60 percent from one year ago.

Boal said the government of China has begun policies to stimulate the domestic supply of pork. The US will likely export over 150,000 tons carcass weight pork to China and Hong Kong in 2008.

The weaker dollar will help the US sell pork to China and other export markets, but competition is strong.