China records highest third-quarter pork output in three years as herd recovers
China’s third-quarter pork production rose to its highest level in three years according to official data seen on 18 October.
Reuters reports that the surging pork output comes after producers built thousands of large breeding farms in 2020 to rebuild the national hog herd that was decimated by recurring outbreaks of African swine fever since 2018.
Pork output for July to September was 12.02 million tons, up 43% compared with a year earlier, according to Reuters' calculations based on official data, and the highest since the third quarter of 2018, before China began feeling the fallout of the swine fever epidemic.
China's pork output jumped 38% in the first three quarters of 2021 versus a year earlier to 39.17 million tons, the statistics bureau said.
The third quarter was, however, lower than the 13.46 million tons in the second quarter, defying expectations by some analysts.
"I thought it would be larger than the Q2 because there were a lot of liquidations in Q3," said Pan Chenjun, senior analyst at Rabobank.
The surge in pork production was led by the largest producers who invested billions of yuan in new farms during 2020 in a bid to grab market share in the aftermath of the swine fever epidemic.
But prices have plunged 65% so far this year, prompting some farmers to sell their herds and exit, while others took the opportunity to get rid of less productive sows.
China's sow herd contracted by 0.5% in July compared with June, and by another 0.9% in August versus the month prior, according to data previously published by the Ministry of Agriculture and Rural Affairs.
"In the second quarter many small producers still had hope (that prices would recover). But by the third quarter the losses had gone on long enough for them to stop, they had no cashflow," added Pan.
Some were losing as much as 1,000 yuan ($155.32) per head last month, she added, when live hog prices fell to under 11 yuan per kilo. Prices are currently at 13.08 yuan.
The statistics bureau said China's pig herd contracted to 437.64 million heads at end-September from 439.11 million heads at the end of June.
China slaughtered 491.93 million hogs in the first nine months of the year, up 35.9% from a year earlier, it added.