The downturn in China’s hog market follows a period of huge profits for many farmers. After African Swine Fever swept through the country three years ago and sent prices soaring, U.S. Meat Export Federation Economist Erin Borror says China historically has been a volatile market. “Producers have been liquidating to some degree and they were last year. Cost of production is still high because of high feed prices. Losses are estimated to be around $40-$90 per head.” Now faced with lower meat demand because of repeated COVID outbreaks, which put the brakes on the restaurant industry, along with surging feed costs, China’s hog producers are switching to lower quality grain from soymeal in a bid to break even. Borror says they’re still watching what effects this might have on the market. “China imports about 70% of corn from the United States and about 29% from Ukraine. We had never seen China import corn until 2021, so it was already interesting before the war started.” Experts in China expect the liquidation of herds to take longer than they initially predicted. Borror says profit margins for Chinese hog producers may not return until 2023.
News Categories
Latest RRFN Podcasts
Subscribe to RRFN
Get a weekly digest from RRFN to stay up-to-date on all the latest news in agriculture.