China still seen as growth market for US pork 

Although China has had a ban on US pork in place since April 2009, it still represents tremendous growth potential as a customer down the road.

China, including Hong Kong, purchased nearly 400,000 tonnes of US pork products in 2008, and combined, these markets ranked third in volume behind Japan and Mexico. The growth in China and Hong Kong pushed the total for international sales that year up by a whopping 57% from the previous year, to a record high. Disease problems in the Chinese swine herd, along with death losses from severe winter weather and increased demand for pork there for the summer Olympics, caused the Chinese to turn to the US for more pork.

Sales of US pork and pork variety meats to China in 2009 fell sharply, though, declining by 35% from 2008. Muscle meat sales there last year declined by 56%. China imposed a ban on imports of US pork following the emergence of the H1N1 influenza, commonly referred to as swine flu, last April.

But China has recently resumed allowing in imports of pork from Canada and the EU, raising the hopes among members of the US pork industry that the ban on US products may soon be lifted as well.

Hayes, who spoke at the National Pork Forum in Kansas City on Saturday (Mar 6), said the rapid growth in the economy had caused a large movement of people from rural areas in China to the cities. More than half of China's hog production comes from small farms and families with one to a few sows, mainly to provide pork for that family and maybe a few pigs to sell to an open-air market in a nearby village or town. With more of its population moving to the urban centres, consumers are also acquiring a taste for chilled pork cuts.

China has a high cost for producing hogs commercially, Hayes said. The cost to feed a hog to slaughter weight there is estimated at US$132 per head, compared with US$81 in the US. China needs to double its commercial pork production as it loses backyard and small farm producers, he said. With the improving economy, people are turning to the off-farm jobs, resulting in less back-yard and small farm hog production.

That puts the US in an excellent position, as the low-cost producer in the world, to eventually expand sales to China. China's pork production is four times that of the US, so any drop in China's production could create an opportunity for US exports.

While there are political issues to be overcome and the Chinese government may not be comfortable about giving up a sizable amount of domestic production to imports, Hayes said economics will eventually cause the Chinese to be more willing to boost pork imports.