The pork industry chain can be divided into three major business segments, namely upstream pig breeding, midstream slaughter and downstream meat product consumption.

Upstream of the pork industry chain-pig breeding

Pig breeding companies purchase breeding pigs, feed, vaccines and other products, and produce fattening pigs through the steps of sow littering and piglet fattening.

Regional characteristics

On the other hand, the distribution of pig production capacity in China is extremely uneven. The main production areas are mainly concentrated in the Sichuan Basin, the Huanghuai Valley (maize and wheat main production areas) and the middle and lower reaches of the Yangtze River (main rice production areas). In recent years, the amount of breeding in the Northeast has gradually expanded.

China’s pork consumption also has certain regional characteristics. People in the northern regions tend to eat beef and mutton instead of pork. The per capita consumption of pork is very obviously low in the north and high in the south, especially higher in the economically developed southeast coastal regions.

Industry pattern

China has a number of enterprises with considerable production capacity in the breeding industry, but due to the large base of the national pork market, the concentration of breeding is still very low at this stage. Under the fragmented market structure, some large-scale breeding enterprises can only affect the price of live pigs in a few areas, and the national leader has not yet emerged.

Midstream of the pork industry chain-pig slaughter

One end of slaughter is connected to upstream breeding, and the other end is connected to downstream meat product consumption, which is a key link in the pork industry chain. The profit of a slaughter company is closely related to the profit per slaughter head and the slaughter volume, and is directly affected by multiple factors such as upstream live pig prices, downstream meat prices, slaughter unit costs, and live pig supply.

Industry pattern

The overall market concentration of the slaughter market is low, and the production capacity of large slaughter companies has not been fully released.

Downstream of the pork industry chain-meat processing and sales

Pig slaughter companies purchase fattening pigs for slaughter and process them into fresh frozen meat, part of which is sold directly to end consumers, and the other part is used to supply downstream meat processing companies. Meat processing companies purchase pork to carry out product deep processing, and finally form low-temperature meat products and high-temperature meat products, which enter the hands of consumers through supermarkets, stores and other channels.

Related report: https://www.cri-report.com/product/research-report-of-import-of-pork-in-china-2020-2024/

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Large-scale farms are sensitive and active in epidemic prevention due to high stocking density and fast epidemic spreading. They become the major demand sides in the PRRS market since they concern the effect and are not quite sensitive to the prices. Large-scale pig farms with annual stock volume over 5,000 heads cost almost 3 times that of small pig farms on vaccines per head, reaching CNY 53 per head. As farms enlarge their scale, overall expenditure on epidemic prevention is expected to rise correspondingly.

In 2007, farms with annual stock volume under 500 heads accounted for 78% of the total and the proportion decreased year by year. By 2015, the number was approximately 55% and it was expected that these farms would account for less than 50% in 2016. China is accelerating the expansion of pig breeding scale. Large-scale farms with annual stock volume over 10,000 heads accounted for less than 5% in 2007 while the number rose to about 12% in 2015. Large-scale farms are the major consumers of PRRS vaccines, nearly all of which use these vaccines, therefore the rapidly expanding breeding scale will directly broaden the PRRS vaccine market.

Reference:

Research Report on China Porcine Reproductive and Respiratory Syndrome (PRRS) Vaccine Industry, 2017-2021

According to CRI, China’s PRRS Vaccine market is fiercely competitive in terms of the competition pattern. By June, 2017, there are about 30 PRRS vaccine producers, among which there are about 10 public companies.

The post Analysis on China Porcine Reproductive and Respiratory Syndrome (PRRS) Vaccine Market first appeared on CRI Report.