June 16, 2025
China urges pig farmers to curb supply following decline in prices
China is aiming to regulate hog numbers and reduce pork production in an effort to stabilise prices of the nation's most consumed meat and alleviate deflationary pressures on the economy.
Authorities have asked farmers to be prudent when it comes to expanding their sow herds, and to halt secondary fattening of livestock, according to people familiar with the matter, who declined to be named as they aren't authorized to speak publicly. The latter practice involves buying standard pigs and fattening them beyond normal slaughter-weights to boost meat output.
By guiding farmers to limit production now, the government is likely hoping to avoid more forceful measures later that could exacerbate price swings and destabilise the market. The National Development and Reform Commission, the state planning agency that contacted producers, didn't respond to a request for comment.
China's commodity markets and the wider economy are feeling the strain of slowing growth, compounded by Beijing's trade disputes with the US. Wholesale pork prices are near their lowest in almost a year, having dropped 10% from a January peak. The protein is an important component of consumer prices, which have been in deflation for four straight months.
The focus on smoothing China's pork cycle — where prices are driven by mismatches in supply and demand — has become more acute in the wake of the market's historic boom and bust around the turn of the decade, which occurred after African swine fever wiped out much of the herd.
Policymakers are also concerned about rural incomes. Pig farmers have struggled to make ends meet this year, and are now losing about 70 yuan (US$10) on each animal raised. Sow numbers, meanwhile, have climbed to 40.38 million, above the 39 million considered normal and close to levels that might trigger formal intervention.
Controlling livestock numbers has ramifications beyond the domestic economy. The country's hog herd is the world's largest and consumes vast quantities of feed, including items like soybeans that are mostly imported. Capping slaughter weights and limiting production would reduce demand, a move that serves China's food security priorities while undermining export prospects for suppliers in Brazil and the US.
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- Financial Post / Bloomberg News
