USDA’s Latest China Pork Import Revision Aligns With Gro’s Prediction

 

Gro Intelligence

8 September 2022

 

The USDA’s recent adjustment to China’s pork import volumes, which put this year’s imports at 2.15 million tonnes, aligns with Gro’s 2022 China pork imports prediction, made almost a year ago in November 2021. At that time, we predicted that China’s pork imports for this year would drop to 1-2 million tonnes, far lower than the USDA’s initial forecast for 4.75 million tonnes.

 

To arrive at our November 2021 China’s pork import forecast, we used Gro’s monthly inventory of hogs and sows data and Gro’s China Pork Demand Forecast Model. China’s pork import volume is not only important to the global supply and demand of pork but also significant to the global trade flows of grain and oilseed

 

China’s reduced need for pork imports comes as domestic pork supplies expand, which in turn requires greater quantities of animal feed — typically consisting of corn and soybean meal. For hogs, 3 kilograms of feed are normally needed to add 1 kilogram of body weight. In the 2021 marketing year, China imported a record 23 million tonnes of corn and 100 million tonnes of soybeans, and the brisk import pace has continued into 2022, as shown in this Gro Portal display.

 

Understanding China’s demand and its domestic supply is essential to predict China’s import volume. While China’s hogs and sows inventory is a useful indicator for China’s pork import volume because most hogs are slaughtered at 6-7 months old, hog prices offer an objective view of the complicated balance of market supply and domestic demand.

 

Gro’s Pork Demand Forecast Model allows us to foresee China’s pork demand objectively. The machine-learning model, which projects pork demand in China for the following year, relies on inputs such as Chinese feed and pork prices, slaughter quantities, feed ratios, climate data, and more.

 

Hog prices, which have risen 10% in the last month, have nearly doubled since the end of March because Chinese hog producers who were burned by sharp price declines at the beginning of this year have been reluctant to sell, despite a healthy consumer demand for pork.

 

COVID lockdowns, flooding, an extended period of extreme heat, and a government pork reserve release have also been jolting China’s domestic supply and demand balance all summer. But domestic supplies are expected to increase in the coming months because of the high producer margin and the increase in sow inventory in the last three months.

 

China is the world’s largest importer of pork and feed grain, and its appetite for pork has major ramifications for hog farmers in exporting countries, like the US and the EU, and for feed prices. A shift toward domestic pork production in China will likely mean a jump in China’s feed grain import needs...

 

more, including links   

https://gro-intelligence.com/insights/usda-s-latest-china-pork-import-revision-aligns-with-gro-s-prediction