Slow growth in Asia, which hosts approximately 65 percent of the global pig population, is constraining global pig meat production to 110 million tonnes, only 1 percent higher than in 2010. Disease outbreaks in late 2010, decimated pig herds in both China and the Republic of Korea, with the resulting shortages pushing up national pig prices in both countries by 60 percent over the past 12 months. In China, production is estimated around 52 million tonnes, 2 percent more than in 2010, but the smallest expansion since 2007.
The production slowdown prompted the Government to resume sow subsidies for large producers and to release pork stocks to bring down food inflation. The impact of diseases is anticipated to be even stronger in the Republic of Korea, where increased farrowings are only partially replacing the loss of one-third of the national herd and production is forecast to contract by about 25 percent. In Japan, lower piglet births in the provinces affected by nuclear fallout have combined with a 13-percent reduction in pig farms over the past three years depressing output by an estimated 7 percent.
In South America, a 20 percent decline of hog prices in Brazil and the liquidation of some producer operations following the imposition of export restrictions are limiting regional output gains to 1 percent. However, in a region characterized by high beef consumption, the high domestic beef prices prevailing in most of the region are offering an opportunity for an expansion of consumer demand for pork, especially in countries such as Argentina, Chile, Colombia and Uruguay.
In the developed countries, pig meat production is currently forecast to stagnate around 41.3 million tonnes overall, constrained by high feed prices. In Canada and the United States, a surge of sow productivity, e.g. over ten piglets per litter, is behind an expected 1 percent increase in output in both countries, with further gains likely next year, especially if feed prices continue to ease. In the EU, the sector is expected to stagnate in 2011, reflecting shrinking profitability. Rising production costs following the implementation of new animal welfare requirements and high feed prices are prompting less efficient commercial farms to liquidate their hog inventories. In the Russian Federation, new support packages are fostering expanding investment in the sector and output.
Double-digit growth in Asian imports strengthens pigmeat trade prospects. Strong world import demand is anticipated to boost pigmeat trade by 8 percent in 2011, to 6.6 million tonnes. In the wake of herd decimation following last year’s FMD outbreak, deliveries to the Republic of Korea are forecast to rise by 57 percent. In an effort to reduce food price inflation, pork imports by China are also anticipated to surge to record levels this year. Strong demand by Hong Kong SAR, Japan, Singapore and Viet Nam is supporting further expansion of trade. Much of the increase is expected to be met by larger exports from the EU and the United States. In the United States, shipmentsare running at a record pace, which may translate into a record 17 percent gain. Exporters in the country are benefiting from the resolution of a trucking dispute with Mexico and reduced competition in the Russian Federation, following the veterinary restrictions imposed by the country on pigmeat from Brazil. Those same restraints are also favouring an expansion of exports from the EU, which are also supported by the release of private stocks in the wake of last year’s dioxine crisis. By contrast, deliveries from Brazil are now expected to decline somewhat, a reflection of reduced access to the Russian market.