China Tracks Imported Frozen Food to Prevent Covid Transmission

China has set up a traceability system to track imported frozen food. Shipments of imported frozen meat and seafood have had to undergo disinfection and special handling since mid-2020. Now shipments have to be accompanied by certificates proving they have been disinfected, must be tracked as they move into domestic transportation and storage facilities, and should be sold on special shelves and counters. 

The traceability platform for imported frozen food was announced at a December 1 teleconference held by the State Administration for Market Regulation (SAMR). Food companies will have to report the source of food shipments, the amount, their current location and destination. Receipts must be complete and inspection and disinfection certifications must be transmitted with the shipment. The information must be reported and be accessible to accelerate epidemic prevention and control, according to the SAMR's explanation.

Imported frozen food cannot be sold without an inspection/quarantine certificate, testing report, disinfection certificate, or traceability information. SAMR told producers to set up special channels for imported cold chain food, to store it in special areas, and to set up special areas for sale of imported frozen food in stores and markets.

The system was said to be in operation in 9 provinces in December. Other provinces in central and western China, including Gansu, Henan, Qinghai, and Chongqing, have reported implementing the system this month. 

The system comes after 6 months of scrutiny of imported foods that has turned up a handful of positive covid virus test results on external packaging of imported food. Follow-up testing never finds additional positive tests on food packaging, personnel, storage areas, or the food itself. It appears only imported food is tested, but domestic chicken from two companies--both foreign-invested--have also turned up positive. 

Last month this blog reported on covid-19 testing of imported food. The latest incidents of positive covid-19 tests:

• January 20, Packaging tested positive on Brazilian chicken wings imported to Guangdong Province and sold to neighboring Guangxi Province.
• January 20, Tianjin, packaging of imported whey products from Ukraine and chocolates made with whey tested positive
• January 22, Suzhou, Jiangsu Province. External packaging of imported pork neck bones tested positive.
• January 21, Zaozhuang, Shandong Province. Imported whey powder used in dates with a milk-based coating tested positive.
• January 21, Wuxi, Jiangsu Province. Imported cherries were found to be positive in widespread testing of imported foods. Officials insisted cherries have virtually no risk of transmission because they are not frozen, the virus is inactive and in very low concentration.
• January 25, nine of 92,000 chicken products from a factory in Heilongjiang Province tested positive. Workers had developed clinical symptoms a week earlier and products had already been removed from shelves. The chicken came from two counties in the province. The factory is a subsidiary of Thai company CP, the second foreign-owned chicken factory to be implicated.
• January 28, Tianjin Binhai District. Packaging tested positive on American pork kidneys that entered the country January 11. An additional 71 tests of workers and storage areas were negative.

Chinese fears of imported pork surfaced early in 2020. An online posting in May noted that many "patriotic" Chinese netizens said they were worried that American pork could transmit the virus and vowed never to buy it. The author explained that there was little chance of accidentally buying American pork since its volume was relatively small and mostly went into processing plants (imported pork did begin to appear in retail markets later in the year). The writer explained that it is easy to distinguish imported frozen pork from freshly slaughtered Chinese pork. 

Several reports since December have claimed that fear of covid-19 transmission is reducing demand for imported frozen pork auctioned by authorities to bolster supplies ahead of the Chinese spring festival holiday. Consequently, the auctions have become less effective, the reports say.

In recent days, hog prices have begun to fall in response to a different covid-related fear. With covid cases spreading in northern and northeastern China, some farmers have began panic-selling their pigs because they are worried about road closures and shut-down of logistics to prevent spread of the virus. Worries about renewed African swine fever cases have also contributed to the panic. Pig prices began falling in other regions as well. 

China's Livestock Data in Disarray?

China's swine herd has been rebuilt to 90 percent of its normal size--so we're told by the agriculture ministry. A perusal of the web site for the organization that counts livestock reveals that Chinese agricultural officials are in the midst of a major overhaul to address dysfunction in the pig-counting system at the same time the structure of pig farming is undergoing dramatic change. Here's a hypothetical series of conversations that make some of the problems concrete:

“Hi, Old Wang. This is Zhu Bingdu from the village veterinary station.”

“Hi Bingdu. How’s it going”

“Not bad. Can you tell me how many pigs you have on your farm this month?”

“Um, I’ve got 250 right now, but I’ll be sending 50 to the slaughterhouse on Monday.”

“OK, I’ll split the difference and put down 225.”

“Sounds good. Talk to you later.”

“OK, bye.”

------------------

“Hello, Old Wang. This is Zhu Wuran from the county environmental protection department. I’m doing a survey of agricultural pollution. Could you tell me how many pigs you have on your farm?”

“Oh, I’ve got about 100.”

“OK. That’s good. My records show we ordered you to close the barns on the riverbank in 2017. Are those still empty?”

“Oh yes, of course, they’re still closed. I always comply with the government’s regulations.”

“Glad to hear it. Have a nice day.”

--------------------

“Hi, Old Wang. This is Gao Daikuan from the county Rural Commercial Bank.”

“Hey Brother Gao. Did you get the box of pears I sent for the holiday?”

“Yeah, thanks. I’m calling about the pig mortgage loan we gave you last year that was secured with 2000 pigs as collateral. I want to make sure you’ve still got those pigs.”

“Oh yeah, they’re all there. And the price is still high like last year.”

“I drove past the farm last week and couldn't help noticing it was pretty quiet and I didn't smell anything. Could I come out and count the pigs just to make sure?”

“No, that’s not possible. We don’t let anyone inside the farm to keep disease out. There was just a new case of ASF reported,  you know. Don’t worry, all the pigs are there.” 

“OK, I’ll just write that down. Bye.”

-------------------- 

“Hello, is that Zhu Bingdu at the Wang Village veterinary station?””

“Yeah. Speak up a little. I’m in a warehouse picking up some vaccines.”

“This is Chao Shuju from the county statistics office. I’m looking at the report on livestock inventories you filed. Are you sure you counted all the pigs correctly?”

“Absolutely. Everything is correct.”

“Listen, I’ve got the county finance office breathing down my neck. The province gave the county a target of 1 million pigs for the end of the year, and we’re running seriously short. If we don’t hit it, we’ll lose out on our subsidy for being a major pig county. I need you to find about 1000 more pigs in your village.”

“OK, I'll correct my report and call you back in the morning.”

“I need it now! Why aren’t you using the cell phone app we just gave you to send the data?”

“The screen freezes up every time I try to enter the password. Can’t I just call it in?”

“Alright, but I need the number today.”

-------------------

These conversations are fake--just like the data--but they could be real. In September 2020, China's Ministry of Agriculture published a circular on further improving livestock statistical monitoring work. The circular admitted there are some "persisting problems":

• A few localities don’t pay enough attention to livestock statistics work, teams are unstable, and estimates are not adequately maintained. 
• Responsibilities are unclear in some places, with multiple bosses, resulting in duplication or omission of livestock farm registration records and other information. 
• In some localities statisticians do not feel the responsibility of their work, procrastinating in collection and verification of data, or reporting incorrect data.
• Some other places have multiple sets of data, confused numbers, and numbers that can't be justified, due to conflict between differing departments.

These problems "seriously affect decisions on industry management and policy, and they must be rectified and corrected as soon as possible," the circular said. 

A December 2019 article identified a number of problems with grassroots livestock reporting. The tables that village-level reporters are asked to fill out are too complex. Statistical data collectors often don't have a clear understanding of concepts such as what constitutes a "productive" female animal. Farmers keep rudimentary records that are not compatible with the detailed data to be reported on survey forms. Personnel are not paid much to collect statistics, so they tend to neglect those duties. Few people doing this work grasp statistical concepts and practices. Surveyors are now often prohibited from entering farms due to biosecurity measures, so they have to rely on data reported to them by the farmers. Grassroots statisticians often have poor computer equipment, and data frequently resides on multiple computers, making it vulnerable to loss or errors.

In recent months, China's National Animal Husbandry Station has reported a series of meetings and trainings to upgrade statistical capabilities. The web site stopped reporting all data items in 2019 or early 2020 except laying hen culls and milk station output.

In November, a national training session for counting pigs was held in Luoyang City. Training included taking responsibility for the collection, reporting, and verification of statistical data, and improving the data's timeliness and accuracy.

In Shandong Province--one of the biggest livestock and poultry-producing regions--scholars from the Chinese Academy of Agricultural Sciences and China Agricultural University inspected the statistical system in two counties and held a "deep discussion" of the reasons behind problems and the countermeasures needed to upgrade the statistical reporting system. 

The September 2020 circular ordered grass roots statistics personnel to verify the accuracy of data on animal inventories, slaughter, meat sales, prices, vaccinations, animal health, carry out spot checks of large-scale farms and try to establish a record system for small-scale farms by the end of 2020. They were told not to report data that was illogical.

November 2020 training session for pig statisticians.

Chart showing number of sows on the National Animal Husbandry Station web site.
Data stop in mid-2019 after sow numbers plummeted 43%.

China Pork Output Lags Inventory Rebound

China's swine inventory has recovered to near-normal levels, but supplies of pork are lagging, according to preliminary 2020 data released by the country's National Bureau of Statistics. 

The inventory of swine at the end of 2020 was 406.5 million head, up 31 percent from 2019 and not far from the average since 2000. The number of hogs slaughtered during 2020 was 527 million, down 3.2 percent from 2019 and still far below the 694 million slaughtered in 2018. The slaughter number was China's smallest since the year 2000.

Source: data from China National Bureau of Statistics.

Quarterly swine inventory estimates show a relatively modest dip of about 25 percent from Q4 2018 to the low point in Q3 2019. That's a much smaller drop than the 40-plus percent reported by China's ag ministry. The Q4 2020 inventory reported by the Statistics Bureau is not far off the pre-African swine fever level. 

Source: China National Bureau of Statistics data.

Quarterly data indicate that the recovery of pork output began in Q3 and Q4 of 2020. Slaughter in Q1 2020 was about 40 percent below "normal" output from previous years for the first quarter. That was partly due to scarcity of pigs but also due to closure of roads and slaughterhouses during China Q1 2020 covid lockdown that prevented hogs from reaching markets. Supplies surged in Q2 as corpulent hogs fed 1-2 months longer than usual came on the market in April and May. Q3 2020 pork output clearly exceeded year-earlier volumes--although it still fell short of Q3 2017 and 2018 supplies. In Q4 2020 pork output again was ahead of Q4 2019 output, but it still fell 21 percent short of Q4 2017 and 2018 output.

Source: Calculations based on China National Bureau of Statistics data.

The number of hogs slaughtered by "designated" slaughterhouses (reported by the ag ministry) shows a strong recovery from August to December 2020. The December slaughter number was 10 percent below the 2018 volume. (This statistic is usually about a third of national slaughter volume reported by the statistics bureau.)

Source: China Ministry of Agriculture and Rural Affairs.

China's Seed Self-Sufficiency Strategy

Chinese authorities approved genetically modified corn seed produced by Chinese company less than a month after the top leadership called for strengthening the nation's seed industry as a critical task for 2021. 

China formally adopted a nationalist seed industry policy at the December 16-18, 2020 "economic work conference" where "solving the seed and cultivated land problems" was featured as the fifth of eight key economic tasks for 2021. Another layer of "seed security" (种子安全) has been added to "food security" (粮食安全). 

China's propaganda machinery has modified the national food security strategy slogan to emphasize the importance of "filling Chinese bowls with Chinese food grown from Chinese seeds" [emphasis added].

The seed initiative also fits into Xi Jinping's new economic strategy of reliance on native Chinese technology as the economy moves into a new phase of development. Another slogan promoting the seed industry initiative, "seeds are agriculture's micro chips" (种子是农业的‘芯片), embodies Xi's new strategy of controlling the technology at the heart of production processes rather than simply being a big producer of output.

Official news media say China's industry supplies 95 percent of the seeds grown in the country, but yields of soybeans and corn are lower than in developed countries, and China cannot supply seeds for some vegetables grown in greenhouses. The entire Chinese seed industry's R&D is said to be less than half that of German company Bayer. The Chinese strategy includes strengthening seed banks and deepening collaboration between research institutes and seed companies. 

On January 11, 2021--3 weeks after the economic work conference--China's Ministry of Agriculture and Rural Affairs announced its list of genetically modified crops approved for biosafety certificates. The list featured genetically modified corn varieties developed by Beijing Dabeinong (DBN), a company engaged in swine production and crop breeding. The approval included DBN9936, a variety resistant to lepidoptera pests like corn borer and tolerant of the herbicide glyphosate, and DBN9858, a variety to be grown as a refuge in conjunction with DBN9936 to prevent development of resistant pests. 

The varieties were approved last January and July for production in northern spring corn regions. Six months later, the variety is now being approved for production in all other major corn-producing regions, including the Huang-Huai region, northwestern, southern, and southwestern corn-producing regions. The DBN corn accounted for 8 of the 21 genetically modified events approved in January for production in China. 

The DBN approval comes after years of banning genetically modified seeds from foreign companies, duplicative trials, and slow-walking approvals of imported crops grown from genetically modified seeds abroad. Additional approvals of imported GMOs issued in January included 5 cotton and corn varieties from Bayer, Syngenta, and BASF. 

Last July, the Ministry quietly re-approved the Syngenta pest-resistant corn variety MIR162 for a second 5-year term. MIR162 was at the center of controversy in 2014 when Chinese officials rejected every corn shipment containing any trace of MIR162 until they finally approved it in December of that year after negotiation with U.S. counterparts. 

Syngenta's web site displays a timeline showing that MIR162 was initially submitted to Chinese authorities for approval in 2010. After years of trials and requests for additional submissions, China still had not approved MIR162 in November 2013 when border inspectors suddenly began to reject any imported corn shipment containing any trace of the variety. MIR162 had been approved in about two-dozen other countries by then. Dozens of shipments exceeding 1 million tons were rejected in 2013-14. Legal action taken by U.S. farmers against Syngenta led to a $1.5 billion settlement in 2018. 

Meanwhile, at the same time Chinese officials were enforcing a zero-tolerance on imported GMO corn back in 2014 it became evident that genetically modified corn had become widespread in Chinese fields, markets and warehouses despite being banned for production in the country. Greenpeace surveys found 93 percent of the corn in Liaoning Province was GMO. 

2014 was also the year Xi Jinping issued a public endorsement of GMO technology. In 2016, China's State Council endorsed GMO technology in its 5-year plan for science and technology.

There was some enthusiasm a year ago from the North American-European seed industry about China's initiative to expand use of biotech seeds, but the latest move shows clearly that foreign seeds will not be welcome in China.

Corn Led China's Commodity Price Growth in 2020

Chinese corn began the first 10 days of 2021 with a 5-percent price increase, according to raw material prices released by the National Bureau of Statistics. After relentless increases throughout last year the January 2021 average corn price was up 48 percent from a year earlier. China has been showing signs of growing price volatility since the final months of 2020.

Source: China National Bureau of Statistics raw material prices.

China's soybean meal prices were up and down during 2020. A 14-percent increase in the final month left the average soybean meal price up 26 percent from a year earlier in early January. Hog prices surged 10.5 percent over the most recent month. The price of hogs is at the same level as a year ago when China was suffering from a severe shortage of pigs. The Ministry of Agriculture and Rural Affairs told us swine numbers have been recovering since then, and the ministry reported that the volume of hogs slaughtered by above-scale slaughterhouses in December was up 41 percent from a year earlier. Yet hog prices rebounded to record levels at the end of the year.

Source: China National Bureau of Statistics raw material prices.

China's agricultural prices were relatively stable during the country's peak covid lockdown period in January-March 2020--except cotton which dropped nearly 20 percent. Corn's price accelerated as the economy reopened last spring. Big sales of reserve corn, wheat and rice and record imports of corn failed to choke off the price surge. In contrast, China's wheat and rice prices were relatively steady throughout 2020 and did not rise much during December-January. 

Index created from China National Bureau of Statistics raw material prices.

Prices of industrial commodities dropped about 20 percent during China's covid lockdown. Most industrial prices recovered strongly from April to July. Industrial commodities became more volatile in Q4 2020. Copper had a surge similar to that of ag prices, but others--like polyvinyl chloride and aluminum--rose and then fell at the end of the year. No industrial commodity matched corn's cumulative 40-percent increase during 2020. Wood pulp was up 23 percent year-on-year, copper was up 21 percent, and steel rebar was up 15 percent.

Index created from China National Bureau of Statistics raw material prices.

Province Appeals for Milk and Chick Deliveries During Covid Lockdown

China's Hebei Province issued an emergency order this week to prevent disruption of fresh milk and chick deliveries during the region's covid-19 lockdown this month. 

Hebei's capital city Shijiazhuang has been locked down, and authorities have limited transportation all over the province after 39 new cases prompted testing that turned up another 354 cases.

The emergency notice from Hebei's agriculture department dated January 6, 2021 advised farmers that fresh milk needs to be delivered to processors within 24 hours and chicks must be delivered to farms promptly to ensure their survival. According to the circular, deliveries of fresh milk and chicks have been disrupted by strict controls, disinfection measures, temperature-taking for drivers, and closure of roads to delivery trucks in some areas--including Shijiazhuang. The circular warns that failure to deliver could result in dumping of milk, death of birds, major financial losses to farms, and pollution. 

In another move to prevent disruptions during the lockdown, A China Central TV reporter said that 70 supermarkets from four retail chains in Hebei have promised not to raise vegetable prices this month. The supermarkets promised to sell stored cabbage, onions, and potatoes at low prices from January 8 through the end of he month.  

90 egg farmers in Hebei's Wangjiayuan village sent out an appeal for
feed deliveries during the February 2020 covid-19 lockdown. 

China Props up Flagging Agricultural Investment

Chinese officials are desperate to funnel investment into the countryside following an investment collapse in 2019 that was exacerbated by the covid lockdowns in the first quarter of 2020. China's Ministry of Agriculture and Rural Affairs (MARA) bragged that fixed asset investment in agriculture grew by 18.2 percent in January-November 2020 as the Government poured money into the countryside to achieve "rural revitalization" and an "all-round moderately well-off society" this year. The ag investment growth was much faster than the overall growth of just 2.6 percent for the first 11 months of 2020. 

According to MARA, the complex economic situation and pressure from the covid virus in 2020 prompted seven government departments to issue an opinion on accelerating agricultural and rural investment to overcome shortcomings in rural areas. The government's strategy includes direct spending on infrastructure and agricultural subsidies, ordering local authorities to draw up lists of investment projects, setting up credit guarantee companies and subsidizing the guarantee fees, and cajoling companies to make investments in the countryside. 

What the Ministry didn't reveal was that the recent farm investment boom followed a collapse during 2019 and the first quarter of 2020. Nor did they reveal that agriculture receives less than 3 percent of all investment--less than half the sector's share of GDP. 

Source: China National Bureau of Statistics.

Monthly fixed asset growth data published by the National Bureau of Statistics shows a big turnaround during the second half of 2020, with "primary sector" fixed asset investment up 18.2 percent from a year earlier in November. Investment in agriculture plummeted 25.6 percent in January from the previous year during China's covid-19 lockdown. The declines eased in February and March while the lockdown was still on, and began to accelerate after the lockdowns began to be lifted in April. 

The signs of sputtering in China's economy in 2019 are mostly forgotten now as the country has been the first to emerge from covid lockdowns. China's fixed asset investment in agriculture had been stagnant throughout 2019, with average growth for the year at 0.6 percent. Investment in the livestock sector was down 3.6 percent in 2019, investment in primary processing was down 8.7 percent, food manufacturing was down 3.7 percent, and investment in food service was down 14.9 percent, according to the China Statistical Yearbook. 

The late 2020 growth in agricultural investment is the strongest since early 2018. The strongest growth in 2020 investment is in hogs (up 157%) and poultry (up 41%)

Agriculture has a lot of catching up to do. Agriculture's share of China's fixed asset investment has been stuck at 2-to-4 percent since figures were first released in the early 2000s. The share maxed out at 4 percent in 2016-17 but collapsed to 2.3 percent in 2019. The surge of investment in 2020 bumped up the agriculture share marginally to 2.6 percent for January-November 2020. The agriculture share of GDP is 7.1 percent. Agriculture's share of China's employment was 25 percent in 2019. Thus, the sector is still operating with very little capital, and the sector is still highly labor-intensive. 

"Primary industry" shares of GDP and fixed asset investment (excluding rural households).

According to MARA, local officials compiled a list of 24,600 investment projects with investment of 1.54 trillion yuan. Central government expenditures on agriculture are increasing, with 183.2 billion yuan for farm subsidies, 86.7 billion yuan for construction of high-standard fields, 26 billion yuan for integrated industry development, and 10.8 billion yuan for rural toilets and residential community upgrades. 

MARA said provincial governments have recommended 143,900 small and medium enterprises for bank loans and 44,400 have gotten loans totaling 163 billion yuan. Credit guarantee companies set up by 33 provincial governments have guaranteed loans of 206 billion yuan for 690,000 projects. Their assets are up four-fold. 

A new "breakthrough" is coaxing local governments to issue bonds to finance rural development projects. MARA said 166 billion yuan in such bonds were issued in 2020, up 140 billion yuan from the previous year. Local authorities have also been ordered to earmark at least 50 percent of revenue from sales of rural land requisitioned for development for spending on rural affairs. 

In April 2020, MARA issued a document that guides companies and rich people ("social capital") to make orderly investments in agriculture and the countryside, serving as a primary force in rural revitalization and the war on poverty. The virus also increased the urgency of this document, MARA said. The document prioritizes about 15 industries and calls for setting up government rural revitalization funds, strong support from banks and insurance companies, government-company investment partnerships, building industrial parks, making villagers shareholders, liberalizing land use rules to allow building storage facilities and grain dryers, and organizing villages specialized in a single product. 

Expansion of production capacity and building a scenic, livable countryside were the top investment priorities until the "serious disease situation" added worries about maintaining food supplies and spring planting to the list of priorities, adding urgency to the rural investment push.
The lengthy list of investment priorities include:  

• modern seed industry 
• animal and plant disease protection 
• firming up supplies of grain, hogs and other major ag products 
• fresh and chilled agricultural storage 
• modern agricultural industry parks, "strong agricultural industry" towns, and industry clusters 
• nonpoint pollution control in the Yangtze River economic belt 
• livestock and poultry manure resource utilization projects 

China Released 670,000 MT Reserve Pork in 2020

China's release of 70,000 metric tons of national pork reserves in December 2020 brought the 2020 total to 670,000 metric tons. A total of 38 sales were held during 2020 as authorities sought to bring record-high prices under control. Reserve sales during 2019 totaled 170,000 metric tons during September and December--ahead of major holidays--as pork prices first began to soar. Releases were 20,000 metric tons in most weeks from December 2019 to September 2020 as pork prices remained stubbornly high.

Sources: China commodity reserve management company announcements
and China Ministry of Agriculture and Rural Affairs.

All of the national pork reserves released during 2019-20 were sales of imported frozen pork. Sales of reserves in 2019 of 170,000 mt equaled 8.5 percent of China's 2 million metric tons (mmt) of imports (harmonized system code 0203) and the 670,000 metric tons of reserves sold in 2020 equaled 17 percent of 2020 imports which will be more than 4 mmt. Authorities dialed back their sales of "reserves" in mid-2020, and the December 2020 sales came after a 2-month pause as prices staged another rebound ahead of the solar and lunar new year holidays. However, overall imports remained robust with over 300,000-to-350,000 mt per month during August-November. The amount of pork released from "reserves" during December 2020 was 70,000 mt -- half the amount released in December 2019 -- but pork imports during the month were probably about 70,000 mt higher than a year earlier. 

Source: China customs statistics.

China's 2020 Feed Production Surged

China's animal feed production through November 2020 was up 9.5 percent from the same period a year earlier. The rebound in swine feed and sustained production of poultry feed is likely to bring the calendar year feed total to a record high. These numbers are not a complete accounting of feed use in China--they don't include feed mixed on-farm--but the data do suggest that China's industrialized "efficient" farms are bumping up demand for commercial feeds as they replace "backyard" DIY on-farm feed mixers and garbage-feeders.

China's feed industry association reported that feed output for the month of November 2020 was up 12.6 percent from November 2019 when feed output was depressed due to African swine fever's decimation of the pig population. November feed output was up 8.6 percent from November 2018--before the epidemic was in full swing. Cumulative January-November 2020 feed output was about 229 million metric tons (mmt). December output (not yet announced) could bring the 2020 total to more than 250 mmt. That would be a record high. 

Source: China feed industry association monthly data.

Monthly feed industry data indicate that swine feed production was down sharply in 2019 when many farmers liquidated their swine herds to avoid ASF. Swine feed began its recovery in the second half of 2020 as monthly output rose from 5.9 mmt to 9.3 mmt between May and October. Swine feed output for the month of November was up more than 50 percent from a year earlier, and it was just 2 percent below its November 2018 value. Some farmers filled their empty pig barns with ducks and chickens. Accordingly, poultry feed surged in 2019 and remained high in 2020--except for a dip during the months of China's covid lockdown in January-March. Feed produced for poultry still exceeded swine feed output in November 2020. The feed data indicate that medium- and small-scale farmers who switched from pigs to poultry have not switched back.

Source: China feed industry association monthly data.

Let's zoom out to look at the explosion in China's commercial feed output despite stagnant meat production reported by the statistics bureau over the past decade. Feed industry output more than doubled from 2005 to 2018 (its previous peak). Meat output rose just 24 percent over that period and seemed to stagnate after 2014. In 2019, meat output dropped 11 percent while feed output dropped less than 4 percent as the boost in poultry feed offset much of the decline in hog feed output during the ASF epidemic. A back-of-the-envelope estimate indicates that feed output could be up about 22 mmt year-on-year for 2020 while meat output could be up 3.5 mmt (when the final 2020 numbers come in). 

Source: China feed industry association monthly data and estimates for 2020.

Looking at these numbers as a ratio, the commercial feed output per ton of meat has risen from 1.5 tons in 2005 to 3.2 tons in 2020. In other words, the amount of commercial feed needed to produce a ton of meat doubled in 15 years, a trend that contradicts presumptions that the industry is getting more efficient.

Calculations by species are even more perplexing. According to the feed and meat data, China's poultry consumes twice as much feed per unit of meat as does its pork. Poultry feed-to-meat averaged about 3:1 until 2017, while swine feed-to-pork rose from 1.2:1 to 1.8:1 during 2010-19. Laying hen feed-to-egg output was consistently about 1:1. These ratios are inconsistent with Chinese cost of production surveys that show typical on-farm feed efficiency ratios of 3:1 for swine and less than 2:1 for poultry and eggs, and the ratios have changed only marginally over the years. Moreover, the poultry and swine feed-to-meat ratios calculated from the feed industry and meat output data indicate poultry are less feed-efficient than swine, the reverse of on-farm ratios. Furthermore, it is odd that the efficiency of converting feed to meat appears to be worsening rather than improving.

Ratio of feed output to animal protein output as
reported by China National Bureau of Statistics.

These data surely are inaccurate, but it seems unlikely that under-counts of poultry over over-reporting of poultry feed (for example) are big enough account for these anomalous results. The January-November 2020 feed data shows that swine feed (for sows, piglets, and finishing hogs) accounted for only about 33 percent of commercial feed output while feed for meat chickens and ducks accounted for over 40 percent. These shares are incongruent with meat output: China's pork output is more than twice as large as its poultry output. It's unclear why poultry feed output has surged in the last 3 years, unless the statistics bureau is missing a surge in poultry output.

Source: China feed industry association November 2020 report.

The feed numbers only reflect feed sold by manufacturers (and reported to the association), so they reflect penetration of commercial feed more than overall feed consumption. Commercial feed has had the highest penetration in China's poultry production since the 1990s when industrialized poultry production was introduced to the country by companies that supplied feed and chicks to groups of farmers they recruited, a so-called "company plus farmer" model. Pig farms often milled their own feed or fed their animals vines, pumpkins, aquatic plants, and food waste. But penetration of commercial grain- and soy-based feeds in the swine sector is surely increasing with the influx of industrialized pig farms, "company plus farmer" models in the swine sector, and efforts to eliminate garbage-feeding. And the farmers who replaced their culled pigs with poultry last year probably bought commercial poultry feed. That still doesn't explain why the apparent 3:1 feed-conversion for poultry calculated from aggregate data is at least a third higher than it actually is at the farm level.

Bags of feed ingredients waiting to be mixed into feed at a Chinese swine farm.

There are no concrete answers here--except that no precision or consistency should be expected from Chinese data. But this deep dive points to the influx of industrialized farms as a factor driving an explosion of feed demand in the aggregate. These farms may be individually efficient in converting grain and oilseed meals into meat (if well managed), but demand for feed ingredients could be increasing in the aggregate if the swine industry as a whole is replacing restaurant waste, vines and potatoes with corn and oilseed meal. It also points to the importance of poultry in commercial feed output, and raises questions about whether China's statistics bureau is undercounting the billions of Chinese chickens and ducks. 

Hundreds of ducks in a Chinese fish pond. Are statisticians counting them all?

A bag of duck feed.

Bags of soybean meal mixed into feed on a Chinese pig farm.