recovery of pork in china 2021 after african swine fever

The price of pork plummeted in China in the first semester of 2021. The size of the pig herd is China just recovered to pre African Swine Fever levels of 2017-2018, much earlier than anticipated.

Ranking of Pig Herd size per country 2021, beginning stockPre African Swine Fever, beginning of 2018201920202021 USDA Report July
Europe (27 countries)150,257148,167147,887150,987
South Korea11,27311,33311,28011,078
China swine herd recovery after ASF in 2021

According to the last USDA Cattle, Pork & Chicken report, China started 2021 with a pig heard only about 10% below pre ASF levels. According to the information provided by the Chinase Ag agencies, last May 2021 the pig herd recovered a 25% year over year. Different sources assume now the pig herd is about 5% below 2018 initial levels.

African Swine Fever caused pork prices to triple in 2019 in China, and prices remained about 100% higher in 2020. Now, pork price in China has lost two thirds of its value in first part of the year as shown in the following graph showing live hog prices per kilo:

pork price in china 2021
Pork Price decline in China 2021

Such a decline in the price of pork in China happened because of different reasons:

  1. Seasonality: the production growth was known just after the celebration of Chinese New Year, the following months are the ones with an historic low demand
  2. The offer growth was accelerated by some panic sales of independent pig farmers that cannot operate with such a low margin. These farmers liquidated their herd, including hogs with below market weight
  3. The new outbreaks of African Swine Fever of the new strains caused by fake vaccines, made many farmers sell all the stock to prevent their farms from getting contaminated, what would cause the culling of the pigs by the state authorities
  4. High feed cost since the hike of soybean and corn prices since last October have put additional pressure on non professional pig farms. Many closed and sold their sows and hogs

The Chinese Government, who fought against the price increase of the most consumed meat in China, now is working on a plan to support pig meat production, and avoid new shortages in the future. Though the National Development and Reform Commission (NDRC), the Chinese government would start to buy pork to sustain prices and replenish strategic stocks used back in 2019 and 2020 to control price increase.

The recovery of China after ASF affected the lean hogs future, the way pork trades at the Chicago Exchange

The US is a large exporter of pork to China, and the trade skyrocketed because of the consequences of the ASF. The recent news about the China pig herd recovery hit the prices in the US.

However, the last USDA livestock report assumes China will still need US and Brazilian pork, despite the domestic herd recovery.

The recent liquidation that produced the over-supply of pork in the market by small and medium sized farms might cause production disruptions as soon as H2 2021. Most of the farms are not currently restocking piglets, and many have culled sows, so pig meat production will be challenged.

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