China Big Pig Farms to Work With Small Ones in $7 Billion Plan to Boost Hog Output

December 26, 2019 Updated: December 26, 2019

SINGAPORE—China’s large pig farms are lining up with small, family-based farms in a state-initiated investment of nearly 50 billion yuan ($7.14 billion) to boost hog productions hit hard by a deadly swine disease, the agriculture ministry said.

Fifteen leading pig farms in Beijing on Dec. 26 signed 19 agreements with local governments in 16 Chinese cities such as Liangzhou of western Sichuan Province and Engshi in central Hubei, to raise pigs together, the Ministry of Agriculture and Rural Affairs said.

These projects are expected to produce more than 22 million hogs for slaughter annually and involve 33,000 poor rural families, the ministry said, without giving a timeline.

Big farmers are encouraged to take a stake in or lease medium and small farms, and should expedite executing these agreements by building a number of standardized household-based farms, slaughter houses and refrigerating centers, the agricultural minister Han Changfu was cited as saying.

China’s pig herd is about 40 percent smaller than a year ago, after deadly African swine fever swept through the country in the year following its discovery in mid-2018, the ministry has said.

China—the world’s biggest producer and consumer or pork—still relies heavily on small farms, with nearly 50 percent of its pork supply coming from farms that produce less than 500 pigs a year.

China’s Vice Premier Hu Chunhua has urged farmers to restock empty farms and called on provincial authorities to do all they can to guarantee pork supplies, particularly ahead of the important Lunar New Year holiday next month.

China’s pork imports will top out in 2022, before declining as domestic production recovers from the disease, according to a report that food consultancy Gira prepared for the U.S. pork industry. Import volumes will stay high through 2025, but prices will ease, Gira said.

“This will be a very different period to the 2019-21 distressed market opportunity,” the report said.

High pork prices as a result of the outbreak will change Chinese diets over the long term, with some consumers switching to cheaper chicken, the consultancy said.

($1 = 6.9992 Chinese yuan renminbi)