May 23, 2007
 

Despite disease, China's meat output expected to be up 2.5 percent this year
 

Despite animal diseases and high feed prices, China is expected to have stable growth in livestock production, with meat production growth expected at 2.5 percent this year.

Live hog prices is expected to reach record-highs exceeding RMB10/kilogramme this year as average production costs have increased 20-30 percent, said Gu Jicheng, Secretary of China Feed Association and the National Livestock Association.

China's live hog inventory declined 1.8 percent in 2006 and 0.3 percent in the first quarter of 2007.

Hog and feed prices are expected to continue rising. According to Beijing's Baliqiao Wholesale market, wholesale pork prices has risen 109 percent to RMB 15.7/kilogram from RMB 7.5/kilogramme last year.

He added that there is a 3-year cycle for hog-prices in China, and last October was the start of one of these cycles. This cycle may see hog prices rising to unprecedented levels but at the same time production efficiency would not be higher than the last one. At current levels, production costs were 20-30 percent higher than the last cycle.

The China Meat Association said that the rise of pork prices was brought about by higher prices of corn and other feed products. Feed cost accounts for 60 to 70 percent of the total hog production costs while the rest of the costs include labour and vaccine expenses.

However, a range of pig diseases also played no small part in reducing pig production. For example, Hunan province this year expects a 10 percent reduction in pig production, meaning 8 million fewer pigs would be produced compared to previous years, in part due to pig diseases. Pig diseases have decimated pig populations at some farms, resulting in farmers reluctant to replenish animal inventories, fearing the disease would return again. Pork prices in the region has reached historical highs and pork supply was tight throughout the province.