The following content is based on a longer report from Dim Sums.
Reductions in swine inventories of 20% or more in many regions of China signal tight supplies and rising prices in coming months.
A Ministry of Agriculture and Rural Affairs (MARA) investigation of the swine situation in seven Chinese provinces during February found "irrational" culling of sows on breeding farms was reducing the core production capacity of the sector. In Henan Province, for example, the inventory of productive sows was down 26% year-on-year at the end of January 2019.
The team from the Ministry's animal husbandry bureau found big cutbacks in herds by backyard farmers, big commercial companies, and key provincial nucleus breeding herds. Farmers and traders in Jilin Province interviewed in a March television report estimated that swine inventories were down by half from a year earlier. Last week, the veterinary bureau in Shandong Province reported a 41% "landslide" decline in sow numbers between July 2018 and February 2019 at 33 "grade 1" breeding farms the bureau monitors. The herds on 1,100 commercial finishing farms was down 18.8% from July to February. Activity at Shandong slaughterhouses fell during February and meat inventories accumulated.
National Bureau of Statistics industrial output statistics show production of "fresh and frozen meat" by processing plants during January and February 2019 was down 17.3% from a year earlier.
Soozhu.com commentary last month said "scarcity of pigs has become an indisputable fact," and anticipates a 30% decline in hog supplies after the second quarter of 2019.
MARA said the sow inventory in Guangdong was down 26% from a year earlier. In Guangdong there are farms that want to restock herds to take advantage of high prices in coming months, but piglets are very expensive when they are available at all.
Both the MARA report and the industry investigation said environmental restrictions are compounding supply problems in Guangdong and Jiangxi Provinces. According to MARA, one group of Guangdong villagers demanded closure and compensation from farms they blamed for degraded groundwater quality. After third-party testing failed to support their claim, they physically attacked the farms, and officials closed the farms last summer.
The industry team estimated that overall feed sales in Guangdong Province were down 10% to 50%. Poultry feed sales were up 10%, although the team said environmental regulations are also closing chicken and duck farms. Shandong's swine feed production peaked in October and decline accelerated in February. Shandong feed output was down 33% from a year earlier.
Tight cash is another problem Chinese pig farmers are encountering. A farm in Jilin Province run by Chuying (Eagle) Group says it was unable to buy feed and had only enough for pigs to eat every few days. The local government gave them 10,000 tons of corn that lasted only 12 days. They say 338,000 pigs starved to death as of January.