Growing Domestic Supplies Highlight China’s Global Pig Forum
Growing Domestic Supplies Highlight China’s Global Pig Forum
USMEF is among the foreign organizers of the 2009 Global Pig Forum and China Swine Industry Conference in Chengdu, China, this week. Within China, the conference is led by China’s National Swine Industry Association under the China Animal Agriculture Association (CAAA), a nonprofit livestock association representing China’s swine and livestock producers.
In a business climate that includes restrictions on U.S. pork imports and a rapid softening of China’s domestic pork market, international interest in the conference is extremely high. Joining USMEF as foreign co-organizers of the event from the United States are Tyson Foods, Elanco Animal Health, the USDA and the Iowa Department of Economic Development.
“The meeting is certainly timely, to say the least,” said Joel Haggard, USMEF senior vice president for the Asia-Pacific Region, who is representing USMEF at the conference. “Chinese hog producers are entering a cyclical downturn, which has been exacerbated in recent weeks by the H1N1 scare.”
Thursday morning’s sessions focused on the inexorable shift toward larger scale hog production as China’s pork industry transforms itself from one characterized by tens of millions of backyard producers. Speakers also addressed the current domestic market downturn, which has seen many commercial producers incur losses after enjoying profitable years in 2007 and 2008.
China’s official press reported yesterday that the national government is considering purchases of pork for its reserves under its new hog price alert system, which mandates government action when the price ratio of live hogs to feed grains moves outside of its normal range. Data presented by representatives of Henan Neixiang Muyuan Animal Husbandry Company Ltd., one of China’s largest private breeding and most efficient commercial hog producers, showed that its market hog production costs were approximately $64/cwt in April, while domestic industry analysts estimate the current average cost of production is near $68/cwt. Current live hog market prices are well below that level, averaging approximately $60/cwt.
Meanwhile, imports of U.S. pork have ground to a halt following the implementation of bans on U.S. pork from 44 states.
“The import bans are a most unwelcome development,” Haggard said. “Despite low domestic prices, there is still demand for U.S. pork in China when we have access to the market.”
In the first three months of 2009, the United States exported 65,600 metric tons (144.6 million pounds) of pork and pork variety meat to the China/Hong Region. This was down 36 percent from the record volume of last year, but 143 percent above the first quarter pace of 2007. Although muscle cut exports have declined compared to last year, variety meat exports have actually increased by 25 percent over 2008 and 217 percent over 2007.
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The U.S. Meat Export Federation (www.USMEF.org) is the trade association responsible for developing international markets for the U.S. red meat industry and is funded by USDA, exporting companies, and the beef, pork, corn and soybean checkoff programs.
Growing Domestic Supplies Highlight China’s Global Pig Forum
USMEF is among the foreign organizers of the 2009 Global Pig Forum and China Swine Industry Conference in Chengdu, China, this week. Within China, the conference is led by China’s National Swine Industry Association under the China Animal Agriculture Association (CAAA), a nonprofit livestock association representing China’s swine and livestock producers.
In a business climate that includes restrictions on U.S. pork imports and a rapid softening of China’s domestic pork market, international interest in the conference is extremely high. Joining USMEF as foreign co-organizers of the event from the United States are Tyson Foods, Elanco Animal Health, the USDA and the Iowa Department of Economic Development.
“The meeting is certainly timely, to say the least,” said Joel Haggard, USMEF senior vice president for the Asia-Pacific Region, who is representing USMEF at the conference. “Chinese hog producers are entering a cyclical downturn, which has been exacerbated in recent weeks by the H1N1 scare.”
Thursday morning’s sessions focused on the inexorable shift toward larger scale hog production as China’s pork industry transforms itself from one characterized by tens of millions of backyard producers. Speakers also addressed the current domestic market downturn, which has seen many commercial producers incur losses after enjoying profitable years in 2007 and 2008.
China’s official press reported yesterday that the national government is considering purchases of pork for its reserves under its new hog price alert system, which mandates government action when the price ratio of live hogs to feed grains moves outside of its normal range. Data presented by representatives of Henan Neixiang Muyuan Animal Husbandry Company Ltd., one of China’s largest private breeding and most efficient commercial hog producers, showed that its market hog production costs were approximately $64/cwt in April, while domestic industry analysts estimate the current average cost of production is near $68/cwt. Current live hog market prices are well below that level, averaging approximately $60/cwt.
Meanwhile, imports of U.S. pork have ground to a halt following the implementation of bans on U.S. pork from 44 states.
“The import bans are a most unwelcome development,” Haggard said. “Despite low domestic prices, there is still demand for U.S. pork in China when we have access to the market.”
In the first three months of 2009, the United States exported 65,600 metric tons (144.6 million pounds) of pork and pork variety meat to the China/Hong Region. This was down 36 percent from the record volume of last year, but 143 percent above the first quarter pace of 2007. Although muscle cut exports have declined compared to last year, variety meat exports have actually increased by 25 percent over 2008 and 217 percent over 2007.
# # #
The U.S. Meat Export Federation (www.USMEF.org) is the trade association responsible for developing international markets for the U.S. red meat industry and is funded by USDA, exporting companies, and the beef, pork, corn and soybean checkoff programs.