Lyle Jones, Genesus China Sales Manager
The average weekly price of live pigs in China has been declining for three weeks in a row, settling in at 18.01 yuan/kg ($1.14/lb.) on September 27, 2024, representing a 4.5% drop in pig price from 18.86 RMB per kilogram on September 20th.
Large-scale farms have been ramping up their production. We see this increase in production coming from the filling of previously empty spaces- not new construction. Very few if any new swine farms being built in China today. Empty farms can be purchased for a fraction of new construction costs- so producers are asking themselves why to build new facilities?
This ongoing consolidation in China will be like that experienced in the USA 20 years prior when many producers ran out of money (or commitment) and sold to others seeking growth opportunities.
The question remains, what will the market be like going forward? No doubt more pigs in the production pipeline will keep prices in check. Challenges with biosecurity, disease control and mortality remain as significant factors in China’s Swine Industry. Sources tell us that only a very few large-scale farms can achieve mortality levels of 10% consistently while most 15% or higher. Disease outbreaks (ASF, PRRS) are continuous and recurring- much like a revolving door. Also, it does not seem that the multi-story buildings are the answer. Moving pigs up and down elevators and disease control pose obvious challenges.
For sure, the pig business has not been an easy business in the last few years and challenges remain. However, at Genesus we believe the main challenge the industry has is an “Opportunity” to supply a better product “Tasty Pork.” Recently we visited Sam’s Club in Shanghai, where meat was the destination product located at the back of the store- far away from the checkout. There was a large display of “Premium Pork” from the Black Pig and cuts were selling at three times the price of regular pale, white pork meat. When we asked people why they are willing to pay more for the black pig meat, they always say “better taste.”
Genesus believes as an industry we need to raise the bar and produce a better product to drive consumer demand by lifting pig prices. Simply trying to cut costs and make a cheaper pig is not the answer. The good news is that Genesus has already done the work with more than 20 years of R & D to provide a consistently “Premium Product” at a competitive cost of production. Those visionary companies who are first to establish a market for premium pork in the marketplace with capitalize on this opportunity!
Inside Sam’s Club in Shanghai
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Inside Sam’s Club in Shanghai
