China’s hog raising industry is mostly backyard raising at small scale. Since 2005, the opportunity cost of emigrating to urban areas for work has increased and environmental regulations have intensified. As a result, the number of backyard raising households declined substantially and hog raising is now of larger scale. As of 2015, more than 50% of hogs were slaughtered at farms with more than 500 hogs going to market per year.
Large-scale production has huge room to improve. In the U.S., the process of scaling up hog raising has almost finished and the share of CR10 hog companies has reached 41%. By contrast, China’s largest hog raising company, Wens, only takes up 2.4% of the market.
The industry enjoyed a good year in 2016. In early June, the hog price hit a record high of 21CNY/kg. Meanwhile, corn prices were in the decline, enriching the profits of hog raising. However, environmental concerns and the removal or moving of hog farms in southern regions dampened replenishment of hog stock, continuing the decline of sow population. In January, 2017, the inventory of sow decreased to 36.51 million, a new low since 2009. Delayed restock of sow will result in decreased pig supply a year later. Therefore, it is expected that China’s hog supply will not be easily increased in 2017, extending the prosperity of the industry.
Imports surge from the difference between international and domestic hog prices. The impact of “foreign pork” should be noted. In 2016, China imported 1.62 million tons of pork, up by 108% YOY. The average import price was only 13 CNY/kg, far lower than domestic prices. The price difference has not yet narrowed, thereby might result in continued increase in pork import in 2017. This will bring impacts on domestic hog supply and hog prices will find it hard to hit another high.
CRI considers in 2017, hog prices will slowly decline with fluctuations. Overall profitability is still promising and the annual average price is expected to reach 15-16 CNY/kg.
As the output volume of pork fails to meet the domestic demand in China, the import volume continues to rise.
China is widely recognized as a big hog producer. In 2012, hog stock reached 462.94 million, including 50.68 million sows.
The fast growth of the dairy industry and the meat processing industry will sustain given China’s economic development and population increase.
The market competition will be modest in the next 3-5 years due to high technical barriers of direct selling FMD vaccines and the small number of participated enterprises while the profit margin will remain at high level.
According to CRI, the aggregate market concentration rate of top 5 enterprises in the growing feed industry was about 10% in 2015.
According to official statistics, China’s corn yield in 2014 was 215.65 million tons, decreasing about 1.3% compared with last year.
According to official statistics, China’s corn yield in 2015 was 224.58 million tons, increasing about 4.14% YOY. Corn has become China’s most important variety of food crop.
Before reform and opening up, cattle were always treated as servant instead of meat. Chinese government actively encouraged peasants to feed cattle on straws not until the early 1990s in order to decrease straw waste
As one of the most important grain varieties in the world, wheat reported a yield of 126.21 million tons in 2014 in China, increasing 3.5% year on year.
Before 1978, egg commercialization was rare with egg always in a short supply. Ever since reform and opening-up, egg industry has flourished in China
According to CRI, the legal import volume of beef in China reached 473,800 tons in 2015, 59% increase than 2014. The value of import surpassed USD 2 billion.
Before China’s reform and opening-up, cattle had been mainly kept for draft purpose. In the early 1990s, economic reform aroused farmers’ enthusiasm,