Dim Sums: Agricultural Markets in China

China's pork output is down 17 percent in Q1-Q3 2019, but the decline accelerated to 42 percent during the third quarter, according to data released by the country's National Bureau of Statistics. September consumer price data show an increase in all meat prices, led by a 69-percent increase in pork costs. The Bureau's economic report on the third quarter of 2019 included estimates of meat output for the first three quarters of 2019 and percentage changes from a year earlier. The country produced 31.8 million metric tons of pork in the first three quarters of 2019, down 17.2 percent from the same period in 2018. Poultry output was 15.39 mmt, up 10.2 percent. Beef and mutton output were a combined 7.9 mmt and rose at a slower pace of 2-to-3 percent. Egg output increased 5.5 percent. The Bureau did not report any animal inventories or number of animals slaughtered. China Livestock Production, Q1-Q3, 2019 Item Q1-Q3 output Change from year earlier...

Beijing pork prices shot upward again in October after officials pulled out all the stops to stabilize them ahead of the Oct. 1 National Day holiday. A comparison with Beijing market prices from the "blue ear" disease panic in 2007 shows that the African swine fever epidemic is the biggest-ever disruption of the world's biggest pork market. Ministry of Agriculture and Rural Affairs figures showed a worsening supply situation. The Ministry reported that the inventory of swine during September was down 41.1 percent from a year earlier while the sow inventory was down 38.9 percent. The Ministry's figures tracking "above-scale" slaughter facilities showed the number of hogs slaughtered in September was down 35.8 percent from a year earlier. Daily price data from Beijing's Xinfadi wholesale market show that pork prices stabilized in September following an August 30 order from Vice Premier Hu Chunhua to keep pork markets stable during the Mid-Autumn Fes...

China's minimum price for wheat will remain steady at 2240 yuan/metric ton in 2020, but a new 37-million-metric-ton limit on purchases at the minimum price will be introduced. The limit on wheat purchases will be divided up into two batches, according to an announcement issued by the Administration of Grain and Commodity Reserves and four other departments. A basic purchase limit will be set at 33.3 mmt. If purchases reach 90 percent of the initial limit, provincial branches of Sinograin--the government's grain reserve company--can make recommendations for allocating an additional 3.7 mmt to provinces. The Administration of Grain and Commodity Reserves will make a determination based on monitoring of production, market prices, volume of farmers' unsold grain and other factors. If needed, the Administration will post the allocations of the second batch of reserve purchases on a web site. Wheat purchases at the minimum price were 30.9 mmt during 2019. Purchases were muc...

Investment in China's farming and agricultural processing sectors is down this year, according to figures released by China's National Bureau of Statistics , a development at odds with policies focused on pumping up investment in the sector. Fixed asset investment in farming, forestry and fishing during January-August 2019 was down 3 percent from the year-earlier period. Investment in primary processing of agricultural products (grain milling, oilseed processing, livestock slaughter, etc.) was down 9.4 percent from a year earlier, investment in food manufacturing was down 2.2 percent, and investment in textile manufacturing was down 5 percent. The data do not include rural households, but this has little impact since other data show that rural households don't make many agricultural investments. China fixed asset investment, January-August, 2019: year-year change Sector Percent change Farming, forestry, fishing -3.0 Primary processin...

China's crayfish production has skyrocketed as local officials around the country rolled out production plans and subsidies to grow the crustaceans in rice paddies. While consumption is booming too, farmers drive the price to seasonal lows when most harvest their crawdads at the same time in June.  The " Voice of Rural China " radio broadcast said 80 percent of new crayfish farmers are losing money and need to think more carefully about the business. China's crayfish output nearly doubled in two years, according to a Ministry of Agriculture report on crayfish industry development released a few months ago. Production reached nearly 1.64 million metric tons in 2018, up 45 percent from the previous year. This came on top of a 32.5-percent increase in 2017. After some farmers "expanded blindly," the industry is now due for a shakeout, Voice of Rural China said. Source: China Ministry of Agriculture and Rural Affairs, Crayfish Industry Development Report ...

China's wholesale pork price in the third week of September was up 81 percent from a year earlier, according to the Ministry of Agriculture and Rural Affairs (I calculate 71 percent). That's much stronger than the 47-percent rise reported recently by the National Bureau of Statistics. Source: China Ministry of Agriculture and Rural Affairs.  It's hard to discern the actual pork supply and demand situation in China because the country's news media are crammed with reports about farmers regaining confidence, the government's "good" and "effective" policy measures, and obediently chanting the mantra, "restoring production capacity and stabilizing pork supply," in obedience to Vice Premier Hu Chunhua's orders to "manage public opinion" regarding pork supplies given a month ago . In a speech to a Dalian corn industry conference this month, a Chinese Academy of Agricultural Sciences researcher remarked that China'...

China's hog-farming companies posted steep year-on-year declines in sales last month--more evidence of China's shrinking pork supply--but they are also in a race to expand production capacity by building huge hog complexes of 500,000 head or more. Reports issued by China's three biggest publicly-listed hog-farming companies showed their combined sales of 2.17 million head during August 2019 were down 39 percent from August last year. Wens Corp. sales were down 34 percent from a year ago, Muyuan's sales were down 37 percent, and Zhengbang's sales were down 29 percent. Sales for the entire year from January to August were more robust due to large sales in the first half of the year. Wens and Muyuan both said their plunge in August sales was due partly to holding back sows for breeding and keeping hogs on feed longer to take advantage of high prices. Wens' monthly hog sales were at a record level this year until they plunged ...