Washington estimates for one of the most important numbers
in world farming – the size of the Chinese hog herd – may be way too low, US officials
in Beijing said, citing improvements in farming practices.
The US Department of Agriculture's Beijing bureau said that the
Chinese hog herd entered 2013 more than 8m head larger than suggested by the
department's official numbers, which are viewed by agricultural commodity investors
as world industry benchmarks.
And the herd will end the year 10m animals larger, at 476.0m
head, the bureau said, highlighting the development of the Chinese pig-rearing sector
from one dependent largely on backyard output to an industry based around
large-scale, and vastly more efficient, commercial enterprises.
Disease risks wane
One impact of this commercialisation was in reducing the spread
of diseases which have been a recurrent problem for the sector.
"Swine producers are adopting better practices to prevent
and manage disease which limited losses during the peak winter season," the
Furthermore, farms, encouraged by a sow subsidy of RMB100
($15.90) per animal through June 2013, have been increasing numbers of sows,
from historical rates of 8-9% of the herd.
"Sources note that the ratio of sows to total swine
inventory soared [to] over 10% in 2012 and is expected to reach 11% in 2013."
'Dampen import demand'
The dynamic reflects a further setback to US pork exporters,
the major shippers to China, following the hurdle Beijing placed on American
supplies by requiring them to be certified free of ractopamine, a growth
"Higher domestic production and beginning stocks will likely
dampen import demand," the bureau said, slashing by 10% to 730,000 tonnes its
forecast for Chinese pork imports this year.
However, the idea of an even larger Chinese pig herd - which
already represents more than half the world total - bodes well for foreign
grain producers, with the country seen losing its self-sufficiency in corn, and
already the biggest importer of soybeans to keep its livestock fed.
Glencore earlier this week highlighted that China would need
a pig herd big enough to require an additional 160m tonnes of corn in feed, if per
capita pork consumption rates on the mainland came to match those in Hong Kong.
Better for beef
The USDA bureau had better news for beef exporters, in
lifting its forecast for Chinese imports of the meat this year from 34,000 tonnes
to 90,000 tonnes.
"Imports will likely reach record levels as foreign products
are becoming price-competitive to domestic products."
Last year, the average price of imported beef of some $4,150
a tonne was more than 40% lower than the average domestic price, the bureau