China’s Pork Sector Continues To Impact U.S.

Corn and soybean prices have risen sharply since mid-August 2020. Smaller than expected 2020 U.S. harvests of both corn and soybeans are a key reason for the price rally. But just as important is the rise in exports of both crops to overseas destinations, primarily China. The rise in China’s demand for feedstuffs is tied to the resurgence in the Chinese pork sector as China attempts to rebuild its hog herd and boost the supply of pork to Chinese consumers.

The magnitude of the Chinese hog sector is hard to grasp initially. As consumer incomes have grown in recent decades Chinese hog production has grown rapidly. Back in the mid-to-late 1970s pork production in China ranged from 18 to 19 percent of total pork production around the world. In comparison, the United States pork production in the mid-to-late 1970s ranged from 14 to 15 percent of the world’s total. Although pork production has increased in both the U.S. and China over the ensuing decades, production in China has grown much more rapidly. By 2010 pork production in China accounted for 50 percent of pork production around the world while the U.S. pork sector accounted for just 10 percent of the world’s pork production. But that changed quickly when African Swine Fever (ASF) hit the Chinese hog production sector.