Total meat production for 2012 is being forecast to increase three per cent from 2011. Beef is estimated to account for seven per cent, pork 63 per cent, sheep meat six per cent and poultry meat 23 per cent of total meat production in 2012.

Pork is a staple in China's diet and because it accounts for most of Chinese meat consumption it is a major driver of prices in the meat market. Surging pork prices in 2011 became a top policy concern for China as affordable pork is considered important for social stability. Pork production in 2012 is estimated to increase four per cent following a three per cent decline in 2011. The increase in pork production is the result of high prices and a resumption of production subsidies. Even with an expected recovery in pork production, fuelled by a strong demand pork imports are forecast to rise eight per cent, pork offal up 10 per cent and live swine increase 20 per cent.

Broiler meat is the second largest animal protein in China and as a result plays an import role when pork supplies are short. The record high pork prices in 2011 along with China's implementation of anti-dumping duties (AD) and countervailing duties (CVD) in 2010 have helped push broiler meat prices to their highest level in four years.

The considerably higher pork prices in 2011 combined with lower expected lower broiler meat imports in 2012 are helping to cause rising broiler meat production. Broiler meat production is expected to increase five per cent in 2011 and another five per cent in 2012 to 13.8 million metric tons (MMT). Because broiler meat is more efficiently produced than red meat, it is less affected by China's high feed costs resulting in broiler meat production growth out-pacing all other meats in 2011. High pork prices are forecast to continue into 2012.

The increase in Chinese broiler production is also being supported by a shift to larger standardised commercial production, which boosts disease control. The larger farms have isolated facilities resulting in reduced risks of spreading highly pathogenic avian influenza (HPAI). HPAI is China's greatest avian disease threat affecting mostly backyard and other small operations. These larger operations continue to increase and now account for a significant share of the poultry meat output while the number of small sized operations continues to shrink.

China's broiler meat consumption for 2011 is expected to increase five per cent over 2010 and increase another four per cent for 2012 to 14MMT as broiler meat continues to be a lower cost alternative to red meat. Consumption of turkey, goose and duck is also on the increase.

Meanwhile, broiler meat (not including chicken claws) are forecast to decline 13 per cent in 2012 to 200,000 metric tons (MT) following a 20 per cent drop in 2010. Chicken claw imports, which account for over two-thirds of China's broiler imports, are forecast to drop 42 per cent in 2011 to 300,000MT in response to AD and CVD measures against US broiler meat exports.

US broiler meat exports (minus chicken claws) are forecast to drop 20 per cent in 2012 to 24,000MT following a 51 per cent drop in 2011. Chicken claw imports are forecast to decline 15 per cent in 2012 to 21,500MT following a 75 per cent drop in 2011. Limited volumes of US claw exports will continue to China despite the AD and CVD duties due to the strong demand.

Before implementation of the AD and CVD duties the US was China's largest broiler product supplier. In 2009, the US accounted for 85 per cent of China's broiler imports. Currently, the US has only a 10 per cent market share. Higher shipments from South America have been unable to completely offset the loss of imports from the US due to capacity limitations.

Turkey

Turkey products are mostly consumed in larger cities with better economies and consumers willing to try new products. Almost all turkey products are imported given the small local production. Mostly in response to higher domestic pork and broiler meat prices turkey meat shipments in 2011 will be 70 per cent higher than 2010. In 2012, Chinese turkey meat imports are being forecast to increase approximately 21 per cent to an estimated 39,000MT.

The US has been the largest supplier of China's turkey meat imports providing almost 90 per cent of the country's total turkey meat imports. It is anticipated in 2012 this is unlikely to change.

Eggs

China is the world's largest poultry egg-producing country. They do not import table eggs. Total production is forecast to grow one per cent in 2012 to 28.3MMT from 27.9MMT in 2011. Current year production is slightly higher than previous forecasts because of better control of avian leucosis virus. Egg producers in China are also facing higher production costs which are making producers less willing to expand. Labour shortages are also anticipated to become a concern in 2012.

Over 90 per cent of fresh table egg exports are to Hong Kong, Macau and Japan. In response to higher egg export prices caused by domestic inflation, egg exports are expected to fall over three per cent. For the January-July 2011 time frame, export prices rose 24 per cent for the Hong Kong and Macau markets.
Source: USDA, Foreign Agricultural Service GAIN Reports

Further Reading

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