Inside Pigs
China wants to reduce sow herds
The Chinese government has lowered its sow size ambitions. This is an attempt to prop up the pressure on pig prices.
Read this article?
Become a subscriber and get instant access
Choose the subscription that suits you
Initially, the target was to limit the sow herd to between 40 and 43 million sows between 2021 and 2025. This target has now been reduced from 37 to 41 million. The target is lower than the current size of the sow herd, which was 45,6 million during the June count. This is 2% higher than in 2017 when the pig sector in China was not yet ruined by the outbreaks of African swine fever.
Regulate pig production
If the sow herd size remains within the planned target, pig production is reasonably in line with demand and this should guarantee stable pig prices. At this point the shoe pinches, because the Chinese pig price has dropped significantly in recent months.
The announcement was good news for the listed major Chinese pork integration companies such as Muyuan Foods, Jiangxi Zhengbang and New Hope Liuhe, which posted significant share price increases. Analysts believe this reaction is exaggerated, because the sow herd cannot be reduced all at once.