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China Meat Supply Continues to Grow

14.01.2022 11:43 "Agro Perspectiva" (Kyiv) According to the report of the USDA Livestock and Poultry: World Markets and Trade (January 2022), total China meat supply in 2022 is expected at 79 million tons, revised up 7 percent from the prior forecast and again surpassing total meat supplies before the emergence of African swine fever (ASF). Driving the higher estimate is a large upward revision to pork production, which is now expected to grow for a second consecutive year. While hog prices are well below the record levels seen over the last few years, they have firmed since bottoming out in the fall. Smaller producers are likely to continue to struggle in the current price environment; however, large operations will look to cover the high fixed costs associated with rapid expansion and modernization as long they can cover their variable costs, at least in the short term. This, coupled with government support, is expected to accelerate trends towards continued consolidation, providing incentives for large operations to keep raising and marketing pigs — assuming the sector can effectively manage endemic ASF. Plentiful supplies of domestic pork will weigh on import demand, causing 2022 pork imports to be lowered 12 percent from the prior forecast. Although 5 percent lower year-over-year, 2022 imports remain elevated by historical standards. Overall, pork supplies are expected to reach 53.7 million tons in 2022 as higher production more than offsets weaker imports.

Meanwhile, the total supply of chicken meat in 2022 is expected to reach 15.1 million tons, 1 percent lower than projected in October. This is largely the result of slowing imports at the end of 2021, with this trend being carried into the new year. Greater pork availability coupled with chicken meat production that is well above pre-ASF levels is expected to put pressure on chicken meat imports, causing the import forecast to to be lowered 11 percent.

Beef supply is also expected to be down nearly 1 percent this year at 10.2 million tons on steady import expectations and a slightly lower production estimate. Imports continue to make up an increasing share of consumption as the Chinese diet evolves and as domestic product struggles to compete on both price and quality.

Agro Perspectiva

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