January 25, 2007

Profitable hog rearing seen in China's Heilongjiang province

Hog prices in China's Heilongjiang province has been rising since Jun 2006. To date, transacted prices of Heilongjiang live hogs have reached RMB 7.5/kg. 

Profits hit RMB 150 for every live hog sold, setting the stage for a period of profitable live hog rearing. In fact, profits have reached as high as RMB 200 per hog, a trend seen since late September last year, according to Tian Yanpo, vice director of Bayan County's Livestock Husbandry Bureau.

Bayan county is a major livestock producing county of the province. The number of hogs delivered out of the county can reach as high as 3000 head per day during peak periods, Tian said. At present, it seems that live hog prices would be stablilised at RMB7.5/kg. However, with the arrival of the new harvest corn and most farmers having planted their own corn to feed their hogs, feed costs are expected to be lowered, bringing in even higher profits, Tian said.

According to Chenhong from the province's Department of Livestock Husbandry Bureau, the swift recovery of Heilongjiang's live hog market, besides owing to the change in market demand, was also due to a new policy from the provincial government towards the end of May last year. 

At that time, the provincial government injected funds into the industry to protect the number of breeding sows. The stablilised market is now expected to last until year-end.  It is expected that live hog production and pork production would increase in the province for this year.

Although hog rearing has become profitable again, Chen said that farmers should learn from their previous mistakes, especially those who were hardly able to weather market changes. He said such hog operations should adopt corporatised farming methods and be more in tune with market changes and not blindly rushing into the market in buoyant market situation.