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17

2022

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09

USDA Annual Report on China Livestock

Source:

USDA; the poultry site

In 2023, China's imports of breeding swine and pork are expected to decline to 5,000 head and 1.85 million metric tons (MMT), respectively, due to lower domestic hog and pork prices.

 

Report Highlights: In 2023, China's imports of breeding swine and pork are expected to decline to 5,000 head and 1.85 million metric tons (MMT), respectively, due to lower domestic hog and pork prices. Consumer price sensitivity and competition among producers are expected to constrain pork and hog price increases, squeezing margins. Strong carryover stocks of beef cattle from 2022 into 2023 will support an increase in cattle and beef production to 52.575 million head and 7.4 MMT, respectively. Imports of cattle and beef are forecast to decline to 300 thousand head and 2.5 MMT, respectively, in 2023 on a less optimistic economic outlook, COVID-19 restrictions and uncertainty in the HRI sector, and tight global supplies.

 

China's swine production in 2023 is expected to reach 675 million head. The collapse of hog and pork prices in 2021 and the first half of 2022 caused severe losses, especially for large producers with significant investments. However, large producers remained steadfast even as losses mounted and are expected to meet production targets in 2023 to maintain market share. Midsized producers are expected to expand production in 2023 on steady hog and pork prices.

 

Swine Imports: Imports of live breeding swine in 2023 are estimated at 5,000 head. Imports will be pressured by lower hog and pork prices in 2023. Additionally, higher transportation costs for transporting breeding swine, stringent import quarantine and testing requirements, and ongoing COVID19 restrictions for airline crew entering China are expected to weigh on imports.

 

Pork Production: Pork production in 2023 is expected to grow and reach 52 million metric tons (MMT), below pre-African Swine Fever (ASF) levels but in line with consumer demand and a less optimistic economic outlook. High feed costs are expected to lower average live hog weights in 2023. The practice of "second fattening" (where standard weight hogs are retained for additional fattening by intermediary producers) is expected to have a minimal impact on overall pork production in 2023.

 

Pork Imports: Pork imports in 2023 are forecast at 1.85 MMT, an 8 percent decline compared to the revised estimate for 2022. The import estimate for 2022 has also been lowered, by more than half from the previous estimate published in the FAS China semi-annual report. Pork imports in 2023 are expected to decline from strong levels witnessed in the last few years as domestic production and prices stabilize. Additionally, imports are expected to be constrained as global pork prices are less competitive compared to domestic prices.

 

Cattle Production and Imports: In 2023, production of beef cattle is expected to rise to 52.575 million head. Stronger carryover stocks are expected to increase both beef cattle and beef production. Multiple provincial authorities have allocated resources to increasing the breeding and production of beef cattle. Imports are expected to decline to 300 thousand head due to a ban on New Zealand live cattle exports by sea that is scheduled to enter into force in April 2023. Additionally, South American exports are expected to decline due to tight supplies, exports of beef cattle for breeding over dairy cattle, and strong demand in local markets.

 

Beef Production and Imports: Beef production in 2023 is expected to rise to 7.4 MMT on high cattle inventories reaching maturation and market weight. In 2023, imports of beef are expected to decline to 2.5 MMT on high global beef prices, lower domestic prices, and a weaker economy impacting consumers purchasing decisions of high value products such as imported beef.

 

USDA's attaché in China expects the country's pork production to increase 1 MMT to 53 MMT, which would remain below pre-African swine fever levels but be in line with consumer demand. The attaché forecasts pork imports will decline 8% from this year to 1.85 MMT "as domestic production and prices stabilize. Additionally, imports are expected to be constrained as global pork prices are less competitive compared to domestic prices." The post expects China's beef production to rise 300,000 MT to 7.4 MMT. Beef imports are forecast to decline to 2.5 MMT amid "high global beef prices, lower domestic prices and a weaker economy impacting consumers purchasing decisions of high-value products such as imported beef."