As if China's swine herd need any additional challenges, the May 12 earthquake, is projected to reduce the country's production another 4 percent. This will increase China's pork prices in the long term. Prices have been running high —  up 68 percent in April compared to 2007 — following health-reduced production. Short-term prices could decline as hog liquidation occurs because of limited feed and water access.

On the other hand, pork imports will continue to grow during the next six to eight months, according to USDA's agricultural office in Beijing. The United States is likely to remain the largest supplier to China for the rest of 2008.

China imported $121.6 million worth of pork in the first quarter, up from $7.5 million for the same period in 2007. Pork variety meat imports were valued at $142.6 million, up from $74.2 million last year. USDA's report said 68 percent of China's pork imports and 24 percent of pork variety meat imports came from the United States, not including U.S. exports to Hong Kong which are re-exported to China.

While the earthquake's location —  China's Sichuan Province —  is not a significant pork production area, some neighboring areas did feel the effects. It's estimated that 4 million to 5 million hogs were killed or slaughtered because feed or water wasn't available. USDA analysts report that the long-term impact will depend on how quickly water, energy and transportation services can be restored. The production recovery process will likely be slow.

Source: USDA, Meatingplace.com