Historically, over 95% of the swine inventor of China was scattered in small family holdings, with over 130 million rural households raising pigs in the early 2000s, according to the Agricultural Census. However, the industry has changed rapidly in recent years, with an expansion of large farms that accelerated during a 2014-17 environmental regulatory push which closed down hundreds of thousands of small farms; and then the African swine fever (ASF) epidemic wiped out millions more.
Currently, 108 companies control 25% of China’s swine production capacity, all holding over 10,000 sows. Moreover, 13 of these farms are among the world’s largest 42 farms that hold above 100,000 sows.
China’s swine industry has faced severe losses throughout 2021 and the first half of 2022, as a result of low pig prices and high feed costs, with these large companies reporting billions in losses, affecting production and sow culling. The financial hardship reflects in sow numbers, with a combined decline in 2021 of 1,100 million sows year over year in Wens, Zhengbang and New Hope, three of the five largest companies in the world by number of sows.
According to Genesus Mega Producers report 2022, Wens Food Group Co., Ltd., with over 400 holding companies and 48,000 cooperative farms across China, declared 1.1 million sows by the end of 2021, versus 1.8 million in 2020; Zhengbang Group’s sow herd went from 1.2 million in 2020 to 1 million, the same as New Hope Liuhe. Most other companies in China among these mega producers reduced their number of sows in 2021, with only a few exceptions, such as Muyuan Foodstuff, which increased their sow herd slightly during the period.
The decline in sows during 2021 continued into 2022 and is already having an impact on the supply chain, with prices rising even though the summer is traditionally the low demand season and hog slaughter volumes in major wholesale centres shrinking in early July.