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Chinese Pork Production Provides Opportunity for Global Food Supply

25 June 2015

NETHERLANDS - The concentration of global pork production in China can be seen as an example of current problems and future solutions in food supply chains, according to a Rabobank analyst speaking at the recent Nutreco AgriVision conference in the Netherlands. Jackie Linden reports.

Rabobank, a finance provider for much of the agro-food sector, was a co-sponsor of the conference, which focused on strategies for bridging the gap between struggling supply and surging demand for food.

Chairman of the bank’s Executive Board, Wiebe Draijer, concentrated in his presentation on the future of pork production in China as an example of today’s problems in the world food supply chain and future solutions.

Wiebe Draijer

Since 2006, much progress has been made in closing the gap between global demand and supply for grain and oilseeds, with half the projected gap in 2050 already closed, largely through yield optimisation.

However, there is still much to do to reach the four billion tonnes estimated to be required in 35 years’ time, requiring further yield increases and improvements in farming practices as well as the supply chain, he said.

Each country faces different barriers, for example, in terms of food security, employment issues and the availability of arable land. These and the current level of production mean that each country may opt for a different solution to the problem of global food security.

Focusing on China, Mr Draijer said it accounts for 20 per cent of the world human population, 50 per cent of its pigs and just seven per cent of the arable land. These conditions make the best approach one of transforming its subsistence farming to industrial agriculture.

Worldwide, two-thirds of grain and oilseeds go into animal feed, of which one-third goes to pigs and one-third of that goes to China so Chinese pork production holds the key to closing the food supply gap, as Mr Draijer said.

But should China focus its efforts on improving corn (maize) growing or pig production?

Rabobank’s experts think that is should be the latter. Reasons are that the efficiency of Chinese pig production is already close to the global average; feed conversion ratio, for example, is 2:1 compared to 1:9 in the US.

Efforts focused on small improvements in breeding and finisher efficiency – for example, in farm hygiene, pig genetics and feeding – could bring about significant increases in Chinese pork output, according to Mr Draijer.

Meanwhile, land could be used to grow high-value crops such as vegetables for human consumption while the raw materials for animal feed are imported from countries that can produce them most efficiently.

Over time, Chinese pork production will increase so that more meat is available to the population and ultimately, improved efficiency will gradually reduce reliance on imported feedstuffs.

The concept represents a much-needed increase in global food supply while ensuring that more of the profits from pork production remain in China. It also offers opportunities for companies to supply the goods and services required to boost Chinese pork production.

Through its offer of finance for investment, knowledge-sharing and networks of people to make things happen, Rabobank aims to close the gap on a global scale, Mr Draijer said, in terms of increased food availability, easier access to food, better food on the plates of the majority of the world’s population and greater stability in the supply chain.

Jackie Linden

Jackie Linden

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