China’s import demand for pork surged in the wake of supply deficits caused by African Swine Fever, said the USDA’s Foreign Agricultural Service in the latest Livestock and Poultry: World Markets and Trade.
As China’s pork production declined by nearly a third in 2020, imports nearly quadrupled, and China accounted for more than 40% of global trade. Hog sectors around the world – spurred on by sky-high prices in China – expanded production, shifted product out of their domestic markets and redirected pork from other destinations, the report said.
CUTTING THE PIE
Among the four largest exporters in 2020, the share of exports destined for China ranged from 29% to 55% on a volume basis, the FAS said. Pork trade with China remained firm in early 2021 and grew 20% year-over-year in the first quarter.
However, by May, China’s imports had slipped below year-earlier levels and by December, imports were more than 60% or 300,000 tonnes less than the same month in 2020, the USDA said. Recovery in China’s domestic pork output, along with greater supplies of other meats, weighed on pork prices and disincentivized trade, taking 2021 imports nearly 20%, or about 1 million tonnes, lower than the record levels of the prior year.
As China’s imports eased in 2021, major exporters sought alternative markets – though most, with the notable exception of Brazil, were unable to reallocate such large supplies.
In 2022, China’s pork imports were forecast to decline nearly 20% and pressure global trade, more than offsetting a recovery in demand among other major importing countries as they recovered from COVID-related disruptions, the report said. As growth in other markets will again not offset the decline in China, most major pork exporters could experience a second straight year of contracting shipments.
THE EU’S ROLE
The European Union, the top pork supplier to China and the world’s largest exporter, was forecast to see exports decline 5% to slightly less than 4.8 million tonnes this year, FAS said. Exporters in the EU were expected to find some relief from stronger demand in the UK, where imports were projected to be 7% larger in 2022.
The EU also could boost shipments to Japan, South Korea and Australia, countries to which EU exports declined in recent years as sales shifted to China, the USDA said.
Meanwhile, US pork exports were forecast 6% lower year-over-year, the report said. China demand for US product was among the first to come under pressure, with US shipments to China falling during every month of 2021 compared with the previous year because of high US prices and retaliatory tariffs.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $137.84 to $141.52 per cwt, compared with last week’s range of $138.00 to $141.00. FOB dressed steers, and heifers went for $216.67 to $220.09 per cwt, versus $217.13 to $221.25.
The USDA choice cutout Wednesday was down $1.11 per cwt at $272.36, while select was off $1.34 at $259.37. The choice/select spread widened to $12.99 from $12.76 with 124 loads of fabricated product and 24 loads of trimmings and grinds sold into the spot market.
The USDA reported that basis bids for corn from feeders in the Southern Plains were steady at $1.45 to $1.55 a bushel over the May futures and for southwest Kansas were unchanged at $0.10 over May, which settled at $7.83 1/2 a bushel, up $0.07 1/4.
No live cattle contracts were tendered for delivery Wednesday.
The CME Feeder Cattle Index for the seven days ended Tuesday was $155.86 per cwt up $0.05. This compares with Wednesday’s Apr contract settlement $158.55, up $0.80.