China Meat Supply Revised Up 7% in USDA Report
By Jennifer Shike, Drovers
January 13, 2022
Total China meat supply in 2022 is expected at 79 million tons, revised up 7% from the prior forecast and again surpassing total meat supplies before the emergence of African swine fever (ASF), according to USDA’s Foreign Agricultural Service report on Jan. 12.
Driving the higher estimate is a large upward revision to pork production, which is now expected to grow for a second consecutive year.
Although hog prices in China remain below record levels seen over the last few years, they have improved since bottoming out in the fall. Analysts expect smaller producers will struggle in the current price environment; however, large operations will try to cover the high fixed costs associated with rapid expansion and modernization as long they can cover their variable costs, at least in the short term.
2022 beginning sow inventories in China are expected to be above year-ago levels. Productivity is also rising as less efficient sows are culled, which should support market hog availability, particularly in the first half of the year.
Trends towards continued consolidation will provide incentives for large Chinese operations to keep raising and marketing pigs – assuming the sector can effectively manage endemic ASF.
Plentiful supplies of domestic pork will weigh on import demand, causing 2022 pork imports to be lowered 12% from the prior forecast, USDA said in the report. 2022 imports remain elevated by historical standards, despite being 5% lower year-over-year. Overall, pork supplies are expected to reach 53.7 million tons in 2022 as higher production more than offsets weaker imports.
Here are a few highlights from the report: