Hog herd retreats to near one-year low

China’s hog herd size shrank in the first quarter of this year to the lowest level in almost a year due to the current wave of companies seeking to trimming their herd amid negative margins.

Total hog herd in the world’s largest hog producing country slid to 422.53 million heads by the end of March this year, down 6% compared with the previous quarter, according to the National Statistics Bureau (NBS).

But the herd size was still up 1.6% comparing to March 2021.

China’s hog market has been well oversupplied since the second half of last year as companies rushed to build capacity throughout 2020 when hog and pork prices were strong, generating lucrative margins.

However, demand failed to keep up with supply last year causing prices to tank, and margins flipped into the negative territory.

Negative margins have forced many small and medium hog producers as well as backyard farmers out of the market. Large corporations have also been dumping their herd to limit losses.

Sow herd size in China also dropped to 41.85 million heads as of March this year, down 3% from the previous quarter.