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By Dominique Patton
WUXUAN COUNTY, China (Reuters)

Surrounded by mountains in a remote part of southwestern China, Xinguangan’s first large-scale, modern pig farm is getting ready to produce its first offspring

By the end of the year, 10,000 sows will live inside two huge barns on this 73-hectare (180-acre) site, producing up to 280,000 piglets annually, or about 20,000 tonnes of pork.

The farm, big even by American standards, is one of a record number of large-scale projects that will be built in China this year as it shifts a big chunk of its pork production from backyard pig pens to automated, intensive hog barns of the kind widely used in the United States.

 

Pigs are seen on a family farm in Xiaoxinzhuang village, Hebei
Pigs are seen on a family farm in Xiaoxinzhuang village, Hebei province, China January 25, 2018. Picture taken January 25, 2018. REUTERS/Dominique Patton

 

Some in the industry estimate it could build several hundred sow farms with about 5,000-8,000 head this year, even more than last year, accelerating the transformation of the world’s biggest pork industry.

Larger, more standardised farms are also paving the way to a more sophisticated market, with China approving this week a live hog futures contract to help farmers hedge price risks.

But there are also doubts about China’s ability to pull off such a rapid leap from age-old traditional methods to cutting-edge industrial production, given the shortage of experienced people and the high risk of disease.

 

Industrialisation has never been this big before,” said Martin Jensen, executive partner at Carthage & MHJ Agritech Consulting, which runs large farms for Chinese clients and trains staff

The overhaul comes as hundreds of thousands of backyard farms are shuttered, too small to bear the cost of meeting new pollution standards. This is opening up room for megafarms using new methods and imported genetics to boost productivity and cut costs.

Higher output from these farms will tame China’s notorious pork price volatility, raise food safety standards, and improve the environment, say experts.

In the long-term, it also could turn China’s pork producers into international competitors, offering quality, competitively priced meat to regional markets.

 

Sows are seen on a large-scale pig farm ow
Sows are seen on a large-scale pig farm owned by the Xinguangan company in Wuxuan county, Guangxi province, China, December 14, 2017. Picture taken December 14, 2017. REUTERS/Dominique Patton

 

“As more large firms enter the market, food safety will increase and costs will drop. Global competitiveness will increase and China will certainly export,” said Fang Shijun, chief researcher at research firm Huitong Data.

Fang predicts a growing surplus of pork from 2018 to 2020, as production grows amid slowing domestic demand.

 

INDUSTRY UPHEAVAL

Modernising China’s pig farms is a massive undertaking. More than half the country’s almost 700 million pigs are produced on family farms, which slaughter fewer than 500 a year. Though many have switched from feeding kitchen scraps to protein-rich soymeal, productivity still lags Western farms.

Costs are among the world’s highest, thanks to heavy dependence on imported soybeans.

Recent policy has driven many small farms out however, exacerbating an earlier market rout. A nationwide crackdown on farm pollution intensified during 2017, forcing hundreds of thousands of pig farms to shut. Many were smaller farms without the funds or land to build waste treatment facilities.

 

 

“We didn’t expect it (to be so strict),” said Wang Chuduan, animal science professor at China Agriculture University. “The impact was very obvious.”

A government blueprint for the industry’s development also encouraged expansion in the northeastern corn belt while restricting livestock farming in populous coastal regions. That further encouraged more intensive production by China’s new corporate farmers, flush with money raised on the stock market and fuelled by 2016’s record hog prices.

Since 2016, almost 70 billion yuan (£7.9 billion) in new farm investment has been announced by 26 listed companies, according to analysts at ZhuE, a trade website.

 

Keep reading …

 

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