New Hope to expand pig herd

By Mark Godfrey

- Last updated on GMT

Chinese agricultural expanding pig herd

Related tags: Pork

Leading Chinese agricultural conglomerate New Hope Liuhe has announced it is adding 1.6 million (m) head to its pig herd, with new projects in three provinces, in another sign of continued consolidation by large players.

Projects in Guangxi province in the south, as well as in Shijiazhuang (two hours by train from Beijing) and Weinan city in Shaanxi (two separate farms of 300,000 pigs each) would include 300 boar stations, according to the company, and would increase the scale and geographic reach of the company’s pig production.

New Hope – which is also China’s top producer of animal feed in volume terms – had new projects under construction that would ultimately add 4.4m head to the company’s annual pig numbers, company chair Geng Cheng told an annual meeting of shareholders in Sichuan province last month. The toughest impact of African swine fever (ASF) on the firm had now passed, Geng also told the meeting.

New Hope isn’t the only big player that has been adding to herd numbers during the ASF crisis. The Chinese arm of Thai conglomerate Charoen Pokphand (CP) has announced it is building a 1m-head new pig farm and meat processing plant in Inner Mongolia province, the comparatively isolated region in northern China that has become a focal point of livestock investments.

Financial results suggested the company was growing its revenue off strong pig demand and prices. Da Bei Nong, another major conglomerate, saw sales of pigs rise 6.3% year-on-year in May to 140,300, while revenues rose 67% on the same month last year, to RMB223m.

The company sold 820,600 pigs in the period from January to May, up 37% on the same period last year. Revenues, at CNY1.08 billion, were up 53.9%.

New Hope and other major listed pork firms, such as Muyuan and Wen’s, are in a good position, according to Yang Fu, an analyst at Cai Fu Securities, who has a ‘buy’ recommendation on the stock of the three firms.

Pig prices were on an “upward trend” due to a shortage created by ASF and, in particular, a kill of infected pigs in the second half of 2018, which was now starting to really work through to prices, noted Yang.

New Hope has previously stated it was aiming for a kill of 18m pigs in 2021 – almost double current numbers – in part through outsourcing to contracted farmers. New Hope claimed to be 25% self-sufficient in pig raising, with the rest sourced from contracted farmers.

Local governments around China have embraced New Hope and CP as partners in reducing rural poverty.

Related topics: China, Livestock, Pork

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