China’s hog herd continues to consolidate, according to data released by major players in their 2022 financial statements.
In terms of scale, Muyuan remains the largest, with sales of 61.2 million hogs. This is followed by Wen’s at 17.9 million, and then New Hope at 14.6 million.
The top 10 largest hog producers saw an output of 121.8 million hogs. According to the National Bureau of Statistics, 2022 hog slaughter was 700 million head, meaning that the top 10 largest companies had a market share of 17.4%, which is 3.3% higher than last year.
The profitability of these companies was mixed in 2022 with some returning to profits while others still generated losses. Despite these losses, many companies are still looking to increase their production capacity next year as they fight for market share.
Wen’s announced its 2023 target was 26 million hogs, up 45% from 2022. New Hope said its target was 18.5 million hogs, up 27%. Muyuan hasn’t announced a specific target, but the company is likely to look to expand as well. The company estimates profits at 12-14 billion yuan in 2022 which would provide capital to deploy and the company has said that it has restarted construction on some breeding projects.
It’s uncertain if these companies will be able to complete these aggressive expansion plans this year as hog breeding margins remain incredibly low, with the hog-to-corn ratio below 5:1.
However, these plans would mean that the top three largest producers would account for 16.4% of the market, up from 13.4% this year.