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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Annual pork consumption is above 50 million tons in China. Demand for hogs varies as season changes. Generally speaking, meat consumption surges in cold autumns and winters while becomes weak in hot summers. What’s more, important festivals and holidays such as the Mid-autumn festival and the National Day stimulate pork consumption greatly. In addition, the traditions of making preserved meat in Southern China and slaughtering pigs  to celebrate the Spring Festival greatly drive pork consumption.

Annual Output Volume of Pork in China (10 Thousand Tons)

Profit of hog slaughter business is low. In 2015, average sales profit margin of national designated slaughter enterprises was only 4.72%. Purchasing prices of hog accounted for 60% of production cost of slaughter enterprises.

Annual Slaughter Volume of Major Hog Slaughter and Processing Enterprises in China

Source: Public Data

Reference Reports:

Report on China’s Hog Production and Pork Market 2017-2021

As the output volume of pork fails to meet the domestic demand in China, the import volume continues to rise.

The post Analysis on Pork Output and Import Volume and Pig Slaughter Volume first appeared on CRI Report.