Pork producers wondering where their industry is headed in the next few years may find at least some of the answers will come from a huge and powerful nation half a world away.
What happens in China will be a significant indicator of what happens in North American economies, including the pork industry, a Chinese agricultural banker told the Banff Pork Seminar last month.
On the pork production side, China produces and consumes half of the world’s pork meat and it’s a marketplace that is rapidly evolving, says Chenjun Pan, senior manager with Rabobank based in Beijing, a leading international banking institution with a strong presence in agriculture. That has significant implications for the Canadian pork industry and the companies that provide products and services to that industry.
Consolidation is a major trend in the Chinese pork industry, both in the farming and slaughtering sectors and the ongoing structural changes will have three primary implications for international players, says Pan. First, demand for technology, knowledge and food safety systems will create opportunities for international players to break into the market.
Rather than focusing strictly on production, the government has also made food safety, genetic improvement and enhanced productivity key priorities, she says. “Given China’s current gap in those areas, the potential for foreign companies to leverage advantages and play a role in China’s pork market is immense.”
Second, import potential continues to grow for specific products such as dark meat, high-end products and specific breeds. “China’s increasing wealth and westernization of lifestyle is giving rise to a high-end consumer segment,” she says. “While still a niche market it is growing at double-digit rates, opening opportunities for western-style processed meat.”
Third, while demand for pork, especially safe pork, is excellent, China is unlikely to rely on pork imports. However, it may import feed grains, says Pan. “The dramatic change in the farming models and limited land and water to grow crops begs the question of whether China will have the resources to feed its growing livestock population in the decades ahead. China is expected to import large amounts of soybeans and soybean meal, and will become a small net importer of corn in the coming years.”