China’s demand for U.S. pork will have a big impact on the success of the U.S. pork industry in 2008. What we know about the Chinese market, and what we can expect in 2008 are questions on pork producers’ minds.
“We know their domestic herd has fallen due to disease, and we know they can’t increase significantly, as here in the U.S.,” says Fiona Boal, executive director of Rabobank Food and Agribusiness Research in North America. "What we don’t know is the real size of that decline in their herd,".
China is dealing with historically high pork prices, because the Chinese pork inventory is barely keeping up with demand, said Boal. Pork prices have risen 60 percent from one year ago.
Boal said the government of China has begun policies to stimulate their domestic supply of pork. The U.S. will likely export over 150,000 tons carcass weight pork to China and Hong Kong in 2008. The weaker dollar will help the U.S. sell pork to China but competition is strong. U.S. poultry leg quarters are competitively priced, and exports to China are up 40 percent from a year ago.
Two other pork producing countries, Brazil and Argentina, have recently signed agreements to export pork to China. France and Denmark also export pork to China. "The U.S. pork industry has enjoyed 15 consecutive years of export growth, and it looks like 2008 will make that 16," said Boal. "Really it is the exports that have allowed the industry to maintain its current fundamentals with such a huge volume of hogs coming through.
“Having access to a market like China in 2008 is really going to be necessary."
Source: The PigSite.com