4 March 2024

2 minute read

By: Global Ag Media

Asia

China on Monday issued new regulations to control the nation's pig production capacity after an aggressive expansion of farms over the past two years led to an oversupply, in a move that could reduce the size of the world's largest pig herd, reported Reuters.

Hog farming, like other Chinese sectors from homebuilding to electric vehicles, has in recent years prioritised growth and market share over profits, creating a surplus that has driven pig prices lower and is now crowding out imports.

With demand in a downturn, the industry have been under pressure to slim down their breeding herds and sell off farms.

China's Agriculture Ministry said large fluctuations in the country's pig production capacity should be prevented.

"The normal retention and fluctuation range of fertile sows and production capacity reduction and other measures set in the (previous) regulatory plan are no longer well adapted to ensure stable pig production under the new situation," it said in a notice.

The retention of breeding sows will be dynamically adjusted according to changes in pork consumption and pig production efficiency, it said.

China last week lowered the national target for normal retention of breeding sows to 39 million from 41 million.

According to the notice, regulatory measures will be triggered when the number of breeding sows rise or fall excessively to ensure a stable supply of pigs.

"This new regulation is a clear signal that the agriculture ministry believes there is significant overcapacity in the current pig population," said Even Pay, agriculture analyst at Trivium China.

"If the number of breeding sows falls by two million in line with the lower national target, that would reduce China's pig herd size by at least 22 million, which will reshape the demand of feed grains like soybeans, corn and wheat," Pay added.

China, which raises half of the world’s pigs, also detailed measures to stabilise the number of large pig farms at more than 130,000.