China, the world’s biggest pork consumer, is currently struggling with too much meat production. Every year, statistics prove the country’s notorious for devouring millions of tons of pork every year and expects to own some 700 million hog by the end of
China, the world’s biggest pork consumer, is currently struggling with too much meat production. Every year, statistics prove the country’s notorious for devouring millions of tons of pork every year and expects to own some 700 million hog by the end of 2017. But it seems that producers are cranking out more pork than consumers can handle.
A pig farmer in action
A pig farmer in actionChina still consumes a lot more meat than any other country. People here will eat about 74 million tonnes of pork , beef and poultry this year, around twice as much as the United States, according to U.S. agriculture department estimates. More than half of that is pork and for foreign producers it has been a big growth market, especially for Western-style packaged meats.
Global Size of Hog Herds (2016)
Global Size of Hog Herds (2016)The “lean-type pork price index,” which reflects the nation’s pork spot price, was earlier this month down around 25% compared to January. The index data comes from the agriculture ministry and Sublime China, a Shandong-based research firm that tracks China’s commodity markets. “The demand (For pork consumption) has shown no obvious positive signs,” reads a June report from Sublime.
Photo:Customer Choosing Meat in a Beijing Market
Photo:Customer Choosing Meat in a Beijing MarketPork prices in China have long been volatile, in part because the market is dominated by small-scale farmers highly sensitive to swings. Ominously for the industry, though, the recent slide comes after consumption fell in both 2015 and 2016—the first two-year decline since the 1970s.
The recent decline has got Chinese hog farmers on a building spree, where the numbers from the decline are starting to come up. Constructing huge modern farms to capture a bigger share of the world’s biggest pork market, while leading producers overseas have been changing the way they raise their pigs to meet Chinese standards for imports. Some have, for example, stopped using growth hormones banned in China.
China’s Meat Quality Control Taking Serious Measures
China’s Meat Quality Control Taking Serious MeasuresFurther statistics from Bloomberg confirm statistics of China being the greatest producer of Meat imports between 2001 and 2016.
China’s Meat import in comparison to the US
China’s Meat import in comparison to the USChina’s top pork producer WH Group has been going up market, selling Western-style products in China, such as sausages and ham. A lot of this is imported from Smithfield, the largest U.S. pork producer, which was acquired by WH in 2013. Western-style good also mean western style prices, however these implicates do not deter the Chinese public from spending a penny extra.
For a growing portion of Chinese consumers, price tags on food items are less and less important. A spate of safety scandals in recent years, many related to meat, have made urban Chinese highly sensitive to food quality. More than 80% of people in China surveyed by Nielsen last year said they were willing to pay more for foods without undesirable ingredients, much higher than the global average of 68%.
However, little that have been emphasised on implications from battery pig farming. Firstly, health issues are the largest concerns to the Chinese public with the rise of obesity. Secondly, despite the aggressive assessment standards, a risk of contracting diseases from animals stands as an ongoing issue with China’s animal food production. And finally, farming more animals means farming more pollution. With China expanding its one child policy to two, it is only obvious that food demand will rise over time. However, whilst meeting demands of the public and overseas profits, china is yet to consider long-term implications of over farming which can potentially be detrimental to both the country and economy to cover damages.
Riding the “Piggy Bank”
Riding the “Piggy Bank”However, all is not lost. Eventually, as the industry makeup changes by becoming more consolidated among larger players, some of the volatility will decrease. Indeed, this current contraction might prompt all parties to stabilize production and better forecast demand.
What is your take on China’s future meat production and impact?
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