Falling hog prices in China suggest the country’s closure of pig farms to comply with stricter environmental regulations has not restricted supplies. While authorities report removing hundreds of thousands of hog farms during a multi-year environmental remediation campaign, at least a dozen companies launched aggressive expansion plans featuring construction of large farms with updated manure collection and treatment facilities.
The figures below, tracking weekly Chinese prices of live hogs, feeder pigs and pork carcasses from 2017 through February 2018, show a continuing trend of lower prices that began mid-2016, when hog and pork numbers bottomed out and sector recovery began. Increased domestic pork supplies last year reduced Chinese demand for imported pork products.
World Trade Atlas data indicate that Chinese pork imports last year, at 1.2 million MT, were almost 9 percent lower than imports in 2016. While import data for January 2018 shows a moderate year-over-year increase, China’s 2018 imports are expected to be about 3 percent below 2017 levels. USDA’s Foreign Agricultural Service will update 2018 foreign production and trade forecasts in Livestock and Poultry: World Markets and Trade, on April 12, 2018.
The table below summarizes countries of origin for China’s 2017 pork imports. The European Union accounted for the largest share of Chinese imports last year—65.2 percent—with Canada and the United States each accounting for about 14 percent. More than 71 percent of China’s January 2018 pork imports were attributable to the EU. Phytosanitary issues, trade-servicing, and aggressive marketing are among the factors most often cited to explain Europe’s dominant share of Chinese pork imports.
Editor's Note: Mildred Haley is a researcher with the U.S. Department of Agriculture's Agricultural Research Service. She coordinates the Livestock, Dairy and Poultry Outlook report.