The red meat markets are well into their seasonal slide from their peaks with processors taking fairly hefty slices off the schedules (venison excepted). However, most classes are still holding up relatively well in relation to the same time last year.
The one category that stands out as being significantly down on twelve months ago is the mutton schedule (2022: $126 average per carcass versus $147 2021).
The previous year’s highs were largely being driven by the heavy cull of pigs in China as African Swine Fever had run rampant through their herd. This year the disease is largely under control and herds within China are building back up. This year pork production is expected to be up 5% on 2021 and imports of pork and mutton are reducing.
Chinese pork imports. Source: USDA, TDM and Post estimate
None of this is particularly surprising or newsworthy however; what did raise my eyebrows was the scale of the piggeries now being developed in China and the innovations (good or bad) they are bringing into their industry.
Prior to 2019 it was illegal to keep pigs in multi-level pig farms. That changed with the Chinese response to African Swine Fever (ASF). Due to the rapidly increasing price of pork in China as a result of the supply issues created by ASF the government relaxed some of the rules around pork production to allow a greater domestic supply. Multi-level pig ‘hotels’ are now allowed and have been popping up all over the country.
The initial reason given was that pigs could be kept safer from catching ASF but proponents have also said that savings in land space and environmental factors are other positives. Looking at one the largest of these “hotels” it appears to be 26 stories and costing around $540 million with many investments around US$75 million per complex or about US$2,000 per pig.
Europe has also dabbled with pig ‘hotels’ but few exist now. Reasons given for their demise are management issues, presumably around animal health and public push back against intensive pig farms. Some experts believe if ASF did break out in such complexes it would be more difficult to contain rather than easier. Looking at this video, space for animals does not appear to be a major consideration.
To date New Zealand does allow pork from China to be imported into New Zealand. This is despite banning caged hens in New Zealand and requiring improved minimum standards for pig raising.
Saying in China, at the latest 5 year Communist Party Congress President Xi reinforced China’s policy to advance the revitalisation of the rural sector. President Xi said that “We will continue to put agricultural and rural development first, pursue integrated development of urban and rural areas, and facilitate the flows of production factors between them. We will move faster to build up China's strength in agriculture and steadily promote the revitalization of businesses, talent, culture, ecosystems, and organizations in the countryside”.
He went on to say “We must reinforce the foundations for food security on all fronts. We will ensure that both Party committees and governments assume responsibility for ensuring food security and that China's total area of farmland does not fall below the redline of 120 million hectares. We will work to gradually develop all permanent basic cropland into high-standard cropland. We will invigorate the seed industry, support the development of agricultural science, technology, and equipment, and refine the mechanisms for ensuring the incomes of grain growers and for compensating major grain-producing areas. With these efforts, we will ensure that China's food supply remains firmly in its own hands. We will adopt an all-encompassing approach to food, develop protected agriculture, and build a diversified food supply system”.
Whether China can realistically consider being self sufficient in the food basics only time will tell. However, they have some looming hurdles, not the least being extremes of climate causing devastation to crops in various regions. Xi has signaled that land ownership by individuals looks to be strengthened saying “We will safeguard the lawful land rights and interests of rural residents who have moved to urban areas and obtained permanent residency, and we will encourage law-based, voluntary, and paid transfers of such rights and interests”…”We will advance reform of the rural land system and grant farmers more adequate property rights and interests”. However, it looks as though the government involvement in large developments will continue with more support for “scaled agricultural projects”.
It is unlikely in any reasonable future time frame that New Zealand will have too much to worry about losing food exports access to China. If and when that time does arrive, I suspect it will be a different world which we are exporting goods to and we are likely to be looking at a different array of goods of which we are exporting.