China’s pork prices are falling, and the government is not about to let them become too unstable. The next step is to intervene as needed, according to a spokesperson for the Ministry of Commerce.

According to a Bloomberg report, China’s pork prices have dropped 9 percent since January. Farmers are losing money and culling some hogs, exacerbating the price issue. The government wants to make sure that a sustained price slide does not destabilize the hog farming industry. After all, the government has made stabilizing, and even expanding, its pork production sector a priority after past “blue ear” disease outbreaks that dramatically reduced supplies and pushed product prices higher. With pork being China’s No. 1 consumed meat, the public can become restless when prices get too high, and that’s not what the government wants to see. Obviously hog farmers don’t want to see their prices dwindle too far either.

The ministry’s spokesperson did not offer any specific details about options to stabilize pork price levels. China did establish a policy last year to implement emergency measures if the hog/feed grain price ratio fell below a series of predetermined marks. Those include the prospect of stockpiling frozen pork.

By late February, China’s live-hog inventory fell 2.6 percent from January to 443 million head, down 0.6 percent from February 2009. The breeding herd rose 0.4 percent from January to 49 million head in February, reports China’s Ag Ministry.

Source: Bloomberg, Meatingplace.com