China’s pig farmers go north

BEIJING - China's largest pig-farming companies and new entrants are racing to build vast, modern hog farms in the northeastern corn belt, expanding the world's biggest pork market and upending traditional trade flows in meat and grain.

At least eight listed companies have announced or confirmed plans to produce around 17 million pigs annually in the northeast in coming years.

Many more companies, including the country's biggest pig farmer, Guangdong Wen's Foodstuff Group Co. Ltd., are building farms in the area, suppliers and sources say, adding to China's annual $1 trillion pork market.

Some researchers expect output in the northeast to hit nearly 120 million pigs a year, almost double the 69 million head produced in the area by Heilongjiang, Jilin, Liaoning and Inner Mongolia provinces last year.

'In the next few years, almost 20 percent of China's hogs will be transferred to new territory. That's equivalent to the number slaughtered in the U.S. annually,” said Feng Yonghui, chief analyst at consultancy Soozhu.com.

Temperatures go well below freezing in the winter in China's northeast, but the area is sparsely populated and allows for setting up large farms that would not be possible in more crowded parts of the country.

'The costs in the northeast are higher because of heating. But we can achieve scale there,” said Song Weiping, vice president at Beijing Dabeinong Technology, an animal feed business that is diversifying into pork production.

'We're building seven farms in the northeast this year. In total, we'll have around 20 farms in the region,” he said.

The output increase in the northeastern provinces would take their share of hogs raised in the country to around 17 percent of the 2016 total and would almost match combined production of 129 million from the top producing provinces, Henan and Sichuan, which currently account for 20 percent of total supplies.

Ramping up output in the northeast will speed up the modernization of China's hog farming sector, which has been dominated for centuries by smallhold rural family-run operations.

It also will create mega integrated farms that produce everything from animal feed to meat and will be equal in size to the hog stations that have transformed the U.S. market in recent decades.

as of October 2016, China has imported some $115 million of Iowa pork, according to the Iowa Pork Producers Association.