May 20, 2011

High hog prices are underpinning rising US pork exports to China and a swift expansion of domestic hog herds this year, with Chinese piglet prices rising 50% so far to three-year highs, the USDA said Thursday (May 19).

Hog imports and production are an important indicator of the state of China's feed industry, with impact particularly on corn and soy supply.

China's retail pork prices are at their highest levels since summer 2008, the USDA's Beijing-based Foreign Agriculture Service (FAS) said.

Export sales from the US, which is now China's top hog supplier, reached 10,000 tonnes a month in July last year and have maintained or exceeded that level this year, it said.

"Traders expect sales to continue at or above this pace at least through the summer and possibly into next year due to a continued expected shortage in local supplies," it said.

Weak domestic prices in the first half of 2010 and diseases reduced Chinese herds sharply, prompting a pork shortage in the country that is likely more severe than officially acknowledged, the FAS said.