It’s back to normal for China’s pig industry
For the first time since the devastating outbreaks of African Swine Fever, the Chinese market has been stable again. Supply and demand are in relative balance, with producers all making money.
Bit by bit, China’s pig industry is facing a new reality. Productivity is expected to gradually increase in the coming years. Just like in most countries across the globe, it is expected that there will be good and bad years. In economically bad years, farms with the highest cost price will then collapse, after which the market will reach a new equilibrium.
In 2023, there was overproduction already, resulting in relatively low pig prices. In September of that year, the average pig price in China was €2.20/kg liveweight. In September 2024, however, the sales price for pigs averaged €2.60/kg, according to analysts.
The overproduction and price pressure in 2023 were the result of the strong production growth that has been going on since 2020. After all, huge investments were made to recover from massive production losses due to ASF. Due to the enormous demand for meat in 2020 and the subsequent years, by definition producing pigs was profitable business, says Kyle Wang, country manager of breeding organisation Topigs Norsvin in China.
Chinese pig sector in balance
How profitable swine production was in 2024 becomes apparent from a recent analysis of the global pig market by Rabobank. In late 2024, Chinese swine farms were earning €65/pig, on the assumption that a farm is growing its own piglets. Should producers be dependent on purchasing piglets, then they make an average of €45 per finisher delivered to the slaughterhouse.
All in all, the state of recovery in China has as a consequence that the country imports less pork and fewer pig by-products. To illustrate that development, just look at the import volumes. European Commission figures show that in 2023, China imported 1.2 million tons of pig products from the EU, calculated in volume. In 2020, however, that volume amounted to 3.3 million tons, the largest amount ever. But even with the 2023 volumes, China remains an important sales market for the EU member states.
Danger of overproduction
Estimates show that there are about 35 to 40 million sows in China. With that number, 650 million slaughter pigs are produced annually, Wang says. An analysis by the US Department of Agriculture (USDA) shows that China produced 56.7 million tons of pork in 2024.
Based on Wang’s figures, China produced an average of 16.25 finisher pigs/sow/year. It should be noted, however, that on-farm differences are large, as well-organised producers achieve 25 finisher pigs/sow/year. Wang expects that production levels will grow steadily. Without specifically mentioning a year, he predicts that in 10 years time, the average production could be at 25 finisher pigs/sow/year. In that case, a total number of 25 to 26 million sows should already be sufficient to produce enough pork. Hence, a danger of overproduction is lurking in China in the coming years.
There is also an overcapacity of barn space. At a time of good pig prices, China can therefore produce more pigs relatively quickly.
Going the extra mile
Maurice Goossens of Dutch-based animal nutrition company World Premix, has been working and living in China for 6.5 years. He notes that after the enormous increase in scale since 2020, Chinese pig producers were forced to focus on increasing production and reducing costs in 2023. Chinese pig producers are willing to go the extra mile to acquire more knowledge to make that happen. The problem is that this knowledge often does not reach staff working in the pig house, Goossens says. In his view, the biggest challenge for Chinese pig production in the coming years is bringing knowledge to the right place. Nevertheless, management is improving and knowledge is growing. Goossens says, “There are plenty of Formula 1 racing cars but there are not enough drivers.”
In terms of improving production and reducing costs, China still has a lot of work to do. The average cost price is now €2/kg live weight, says Wang. Cost price for the top farms are around €1.60/kg live weight.
Improving biosecurity
The impact of ASF on Chinese pig production has slowly evaporated. Lessons have been learned from the past, Goossens notices, and on-farm biosecurity has improved. In addition, in case of an infection, only infected animals are culled. The empty spaces are then filled using gilts. Almost every large company has its own laboratory to test pigs for the ASF virus. Producers opt for that solution as the Chinese authorities do not financially compensate for culling.
Another development is that piglet production has shifted to warmer regions in China, says Wang, where the risk of ASF is not as high. The north of the country, an area where a lot of feed is grown, is therefore mainly home to pig finishing. That strategy has the desired effect, says Wang.
Still, disease pressure as well as the lack of knowledgeable staff, are the biggest obstacles to increasing production. Porcine Reproductive and Respiratory Syndrome (PRRS) or Porcine Epidemic Diarrhoea (PED) are examples of pathogens that occur in China big time and have led to production losses, insiders say. Therefore, biosecurity improvements to keep ASF out may not always have led to a substantially better veterinary situation on pig farms.
Further development of the pig sector
China accounts for half of the global pig production: 56.7 million tons annually, according to the USDA. How exactly that is divided between farms remains an estimate, but it assumed that the top-20 of Chinese integrators produce about a quarter of the total amount of pigs. A larger group of more modest sized produces another 25% of the pigs. The rest comes from even smaller farms with 100 to 1,000 sows and backyard companies with a maximum of ten sows. The latter group often sells its pig meat at local markets.
No matter what set-up is chosen, each production strategy comes with its pros and cons. The cost price must be reduced, especially for capital-intensive farms. At the moment, everyone is making money in China, says Goossens. Yet markets and regulations can change at any time. He says, “In China, there is also pressure on the pig sector to reduce antibiotic use.” Such a measure does not make keeping pigs easier in advance on large companies with high disease pressure.
Future looks bright
Nevertheless, there is an expectation that production per sow will grow in China. It is therefore unlikely that the country would again revert to import levels of pork and by-products as was the case in 2020, says Wang. The pig farming sector in China is also given every opportunity by the government to develop. Goossens is convinced that that trend is going to continue.
Add to that, that China still has a number of strong assets. In principle, everything is in place to achieve good results, including genetics. For example, Topigs Norsvin is building two nucleus companies of 1,200 sows each with local partners. The farm that Topigs Norsvin is building together with Muyuan Foods will be stocked in mid-2025. And this is not the only project – there are countless others like this.
Last but not least – the Chinese appetite for pork has not wavered. China still loves its pork and the demand makes the industry go.
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