Title: Structural Changes in China
1Structural Changes in Chinas Hog and Feed
Production
- Francis C. Tuan and John Dyck
- ERS/USDA
2Overview
- Chinas Livestock Production
- Chinas Hog and Pork Sector
- - Production and Consumption
- - Trade
- Chinas Feed Industry
- Sources of Data
- Related Policy Changes
-
3Chinas Livestock Production
- - 6000 years of household backyard production
- - Large but still growing rapidly
- - Experienced significant structural changes
since mid-1980s - - Total meat output increased 58 (red meat
56), poultry meat 44, eggs 39, cow milk
259, over the last 9 years - - Specialized household and commercial
operations grew rapidly since the mid-80s
4Chinas Hog and Pork Sector
- - Hog slaughter totaled 618 million head in 2004
- - Pork output is the core of the Chinas
livestock industry, reaching 47 million tons in
2004, largest in the world - Improved feeding efficiency due to policy
changes, production structural change, and use
of manufactured feed - - Majority of pork still comes from household
backyard feeding
5Chinas Hog and Pork Sector- continued
6Chinas Hog and Pork Sector- continued
Number of farms
Production
31-50 head
51-200 head
0.15
1.12
201-1000 head
11-30 head
201-1000 head
Over 1000 head
3
2.47
0.02
7
Over 1000 head
6-10 head
0.01
4.63
51-200 head
4
31-50 head
2
11-30 head
16
Under 6 head
59
Under 6 head
6-10 head
12
91.6
7Hog Production Distribution by Region
8Chinas Pork Consumption
- Inverse relationship between p.c. pork
consumption and p.c. grain consumption - Slow increase in rural and urban p.c. pork
consumption - Growing discrepancies between production and
consumption of pork - Chinas official hog numbers and pork output were
revised since 1996 based on the First Ag Census - Away from home pork consumption needs to be
closely studied
9Per Capita Availability and Consumption Pork
- Unit kg
- Year P.C. Availability P.C. Consumption
(Prod/pop) (Urban) - 1981 11.9 16.9
- 1985 15.6 16.7
- 1990 20.0 18.5
- 1995 30.1 17.2
- 2000 31.8 16.7
- 2004 36.2 19.2
- Sources Chinas Statistical Yearbooks, various
years
10Chinas Hog and Pork Trade
- Trade volume and value are low if compared with
the total output or export value - Chinas hogs are mainly exported to Hong Kong,
Live hog (and chicken) exports to other
destinations are restricted by disease problems - Frozen pork or cuts exported to Middle East and
Russia periodically confronted sanitary standard
issues - Expansion of pork exports is difficult because of
SPS concerns
11Chinas Hog and Pork Export
- Year Live Hogs Frozen, Fresh Pork
- (1,000 head) (1,000 tons)
- 1985 2,960 111
- 1990 3,000 124
- 1995 2,530 150
- 2000 2,030 50
- 2001 1,960 100
- 2002 1,880 160
- 2003 1,880 210
- 2004 1,970 290
- Sources Chinas Customs Statistics, various
years
12Traditional Feed and Terminology
- Fine feed--Raw or energy grain (corn, rice,
wheat, and tubers), bran, oilseed meals - By-products/residues--processing residues from
distilling, tofu, sugar - Additives
- Roughage--hay, husks, straw, water plants
- Wastes--food waste, table scraps
13Chinas Manufactured Feed
- Chinas feed industry, worlds second largest,
produced a total of 93 million tons in 2004 - Domestic and foreign investment in feed mills
began in the mid-1980s - Compound and mixed feed output grew rapidly in
earlier years, reaching 68 million tons in 2004 - Concentrate feed production and use, particularly
in rural areas, rose markedly over the last
decade - Feed quality improved, such as use of soybean
meal, and variety increased. China imported more
than 26 million of soybeans in 2005
14Manufactured Feed Output
15Feed Efficiency by Type of Livestock(kg feed/kg
output)
- Sources ERS calculations, based on China
National Development and Reform Commission Cost
of Production Surveys.
16Pork, Eggs, and Poultry Account for Most of Feed
Grain Use (2004)
- Note Grain requirements estimated by feed
efficiency multiplied by livestock output. - Sources Estimated by ERS using China National
Bureau of Statistics and China NDRC cost of
production surveys.
17Sources of Livestock Data
- Production data -- Ministry of Agriculture (MOA),
Chinas First Agricultural Census (1996) - Consumption data -- National Bureau of
Statistics, RCRE/MOA (Surveys) - Cost of Production -- National Development and
Reform Commission (NDRC Surveys) - Price Data -- National Bureau of Statistics,
Price Bureau/NDRC - Trade Data -- Chinas Customs Statistics
- Feed Data -- Ministry of Agriculture
18Policy Changes
- Liberalization of livestock production and
marketing policies beginning in the mid-1980s
have been critical to the growth of Chinas
livestock sector - Policy changes in hog production include
- --Eliminating government procurements of live
hogs - --Government encourages setting up more
efficient hog production bases - Policy changes in hog marketing include
- --Eliminating procurement prices
- --Opening up rural and free trade markets
- Government paid attention to the establishment of
feed industry since the mid-1980s and regulations
on slaughtering houses and sanitary conditions
since the 1990s
19Summary and Conclusions
- Chinas hog/livestock sector was one of the
sectors liberalized the earliest along with
oilseed sector) - Policies encouraging hog production bases and
development of feed industry were key factors to
the growth of Chinas hog/livestock industry - Major challenges ahead include SPS related issues
- The pace of structural changes in coming years
will determine Chinas overall feed demand
20ERS China hog/Pork Related Studies
- ERS studies on Chinas livestock sector (Tuan,
1987) - Main features of Chinas animal protein economy
(China Report, 1998) - ERS hog/pork balance sheet team to China in 1998
(China project) - ERS pork industry sector study team to China in
1999 (China project) - Chinas emerging feed industry (China report,
2000) - Structural changes in Chinas livestock and feed
production Trade implications (Tuan and Peng,
2001) - Chinas Hog Production Structure and Efficiency
(Zhang, Somwaru, and Tuan, 2003)
21Chinas First Balance Sheet Exercise Demand and
Supply of pork in 1998 (contents)
- Executive Summary
- Overview Balance Sheet of Hog-Inventory in 1998
- The Hog-Breeding Industry
- --The importance of hog raising to Chinas
livestock sector - --Historical trade of Chinas hog production
- --Geographical distribution of pork production
- --Estimation of hog production in 1998
- Demand for Live Hogs
- --Slaughter
- --Inventory
- --Trade
- Pork Consumption
- --Changes in pork consumption
- --Factors hindering the increase of pork
consumption - --Estimation of the demand for pork in 1998
- Export of Live Hogs and Pork
- Prices of Live Hogs
22Chinas swine industryCommodity Yearbook (1999)
under the China Project
- Importance of Hog Production to Chinas Livestock
Industry - Hog Breeds and Commercialized Production System
- Structure of Hog Production
- Feed and Feeding
- Cost of Production and Prices
- Pork Output
- Pork Consumption
- Disease and Protection
- Markets and Marketing System
- Pork Processing System
- Pork Trade