Pig farmers told falling pork prices could hurt livelihood

PUBLISHED : Thursday, 14 May, 2009, 12:00am
UPDATED : Thursday, 14 May, 2009, 12:00am

Pig farmers on the mainland have been warned that the supply of pork on the mainland now outstrips demand. The price of pork, which began to drop from December last year, has now fallen so low the central government is taking note.

This trend - coupled with the recent drop in demand due to people shunning pork since the outbreak of swine flu - could put farmers' livelihoods at risk.

The National Development and Reform Commission said the price of pork, relative to the price of corn, had dipped to a level that indicates pig farmers may no longer be able to make a good living.

The government says the price of a catty (about 600g) of pork should be at least six times the price of a catty of corn. Now the ratio is 5.9 times, the commission said on its website while raising the alert.

Other statistics support its conclusion.

A government survey said there were 449 million pigs in the mainland in March, 8.5 per cent more than the number in March last year

Meanwhile, the Ministry of Agriculture announced that the wholesale price of piglets on April 29 was 17.07 yuan (HK$19) per kilogram - 13 per cent lower than at the end of March.

This came more than a year after the mainland introduced policies to encourage pig farming, after a reproductive and respiratory illness in pigs - known as the 'blue ear pig disease' - wiped out 70,000 pigs in 2007 and led prices to spiral.

The policies attracted more people to take up pig farming.

The most recent drop in price, the commission said, was due to a 'seasonal decrease in the demand of pork' and a 'consistent increase in supply due to the recovery of the industry'.

An internet portal for pig farms to exchange price and stock information, MZ86.cn, reflected the gloom in the industry.

A number of farms offered piglets at 3.2 yuan per catty with free transportation if the buyer takes at least 100 pigs.

At least one farmer is feeling the heat. Yang Runchun, the manager of Hunan Pengyang Nucleus Breeding Pig Farm, which is located in Hunan , one of the major pig-raising provinces, said his farm has suffered a loss from the 'significant' drop in prices.

'With the swine flu, the selling price of pigs has plunged to 3 yuan per catty, though it has increased slightly now,' he said.

In January, the commission and six other departments had already ordered provincial and city governments to monitor pork prices and help 'maintain the long-term development' of the industry. Lower-level governments were also asked to help.

To stabilise soaring pork prices in the aftermath of the blue-ear disease outbreak, the government provided subsidies, loans and insurance to pig farmers and compensated those who had had their sick pigs culled.

The government also paid to upgrade hygiene and waste management facilities, and to vaccinate healthy pigs.

Overall, central and local governments have injected at least 2.36 billion yuan in subsidies and other aid into the industry. As a result, the price of pork fell by 11 per cent by mid-September of 2007.

Big dip

On April 29, piglets were selling at a wholesale price per kilogram of 17.07 yuan

This was a drop from the price a month ago of: 13%