However, the supply decline will bottom out in 2020 and, by the start of 2021, hog and sow inventories will be up by 9% and 15%, respectively.
“Robust slaughter in 2021 will drive pork production up to 41.5m tons, from the record low level of 38m tons in 2020.
“The 2021 ending pig inventory is forecast up at 370 million head, equivalent to over 80% of pre-ASF levels. Total pork imports will peak in 2020 at 4.3m tons and decline to 3.7m tons in 2021 as domestic supply recovers.”
ASF has accelerated structural shifts within the Chinese swine industry, finds the USDA GAIN report.
The analysis finds that large companies are investing more heavily to vertically integrate their operations.
“For example, a large swine producer in Henan Province reported that part of their ASF mitigation strategy was to achieve control of their feed supply chain. In addition to purchasing a feed mill, the company also acquired their own transportation and slaughtering facilities.
“Also in Henan Province, one of China’s largest swine producers increased its sow inventory to about 1.7 million head by April 2020, up significantly from 1.28 million head in 2019. The company also announced a project to build 100 swine farms in Nanyang, Henan Province. Construction started in June with a total investment of 12 billion RMB (US$1.7bn), adding an additional yearly capacity of 10 million head.”
In order to rebuild their genetic stock and meet restocking demand, China’s imports of breeding pigs are expected to increase in 2021, to 30,000 head, reports the USDA.
Swine feed production growth
Citing data from China’s Ministry of Agriculture and Rural Affairs (MARA), the US agency said there are indications of growing swine feed consumption since last December. And the USDA expects that feed demand in China will continue to increase through 2020 as more swine operations come online.
China’s National Grain and Oils Information Center (CNGOIC) estimated total compound feed production will reach 217 MMT in 2020, a net growth of 6.9 MMT from the previous year.
Industry data also shows total sow feed sales in the first five months of 2020 increased 16.7% from the previous year, said the USDA.
“Shandong Province, one of the largest feed-producing provinces (accounting for 16.5% of China’s total feed production in 2019), reported that total feed production reached 13.1 MMT in the first four months of 2020, 19% higher from the previous year.
“In particular, swine feed is up 37% while feed for gilts doubled and piglet feed up 56%.
“A Liaoning-based feed company (with yearly production of roughly 3 MMT) reported feed sales up 47% in the first months of 2020 as compared to the previous year.”
