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Profits incentivize some Chinese pork producers to expand

An economist for the US Meat Export Federation says pork producers in China are seeing record profits.

Erin Borror says that has been a huge incentive for pork producers in China to expand. “There’s a profit of anywhere from $70 to $150 per head depending on if you’re farrow to finish or just finishing,” she says.

She tells Brownfield piglet prices are double year ago levels and that indicates tight supplies but also shows strong demand for rebuilding.

Borror says this looks like another typical price cycle for China.  “But, it remains to be seen how long the market remains hot,” she says.  “And to what extent they rebuild, if prices return to more historic levels or whether they remain somewhat above recent history.”

She says the government is encouraging producers not to over expand the herd because it would cause large price swings in the market.

But, Borror says with the large number of backyard producers the volatility in China’s pork market will likely continue until there are more commercial farms that are less reactive to the price spikes.