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Following a 35 percent decline in hog production in China during 2019 as result of African swine fever, the Department of Animal Husbandry initiated a program to rebuild the herd over a 3-year period. According to a release by the Ministry of Agriculture and Rural Affairs, the growing-hog herd rose by 23 percent in May 2021 compared to the corresponding month in 2020. The sow herd increased by 20 percent by May 2021 attaining a level of 98 percent of the population as at the end of 2017.
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Hog Hiltons add to overproduction |
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The availability of live hogs can be inferred from the Dalian Commodity Exchange. On February 1st, live hogs closed at $3,773 per short ton of standard product. On June 1st, price had fallen by 24 percent to $2,880 per short ton.
 The National Development and Reform Commission (NDRC), a government agency issued a warning to hog farmers in May to restrain production as the hog-to-grain price ratio fell to below 6:1. The Commission attributed the sharp drop in price to farmers consigning heavy hogs to market. The Dalian standard is 240 lb. liveweight. According to Pan Chenjun, Senior Analyst at Rabobank low prices are due to high domestic production and exacerbated by the large volume of pork imports coupled with weak seasonal demand. Despite warnings from the Commission, live hogs are flooding the market as a result of panic selling. At a hog-to-grain price ratio of 5:1, the NDRC may purchase pork to bolster prices.
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