Relocating, Consolidating, and Upgrading China’s Hog Industry
After several years of rapid development, the Chinese hog industry has entered a transition period. The industry is facing resource and environmental constraints, and productivity is lower than in other key countries, but industry players are poised to find a new way forward and reshape China’s hog industry for the better.
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The recent introduction of a series of government policies and five-year plans aimed at regulating and optimising the industry layout has massive consequences. Chinese hog production will be increasingly concentrated in feed-grain plantation regions. Stricter environmental standards will drive the relocation of production capacity, and push larger scale, more advanced farming operations to further improve productivity and food safety.
Rabobank has explored the implications of potential changes in the coming years, with specific attention to the potential impacts on key stakeholders along the supply chain. “We expect major changes for the Chinese hog sector to occur in three areas: geographical distribution, industry structure, and the consumer market,” according to Chenjun Pan, Senior Analyst – Animal Protein. These developments demand a more coordinated business model, will force pork processing to move closer to the consumer market, and will strengthen demand for opportunities in cold chain and continuous trading.
“Companies quickest to identify, respond, and adapt to these changes will be the winners, leaving players who are slower to respond struggling to compete in the new industry,” says Ms Pan.
