World Pork Expo: Genesus' Jim Long - China's Huge Sow Liquidation Will Support EU, N. American Markets

4 June 2015, at 1:00am

ANALYSIS - Jim Long, president of Genesus, said Russia's shut down of pork imports from the EU will create a surplus of pork, but China looks primed to take it off the EU's hands and will likely be looking for even more supplies, reports Sarah Mikesell live from World Pork Expo in Des Moines, Iowa, USA.

Long said Russian producers are making $125 per head, and one of the reasons for that profit margin is that Russia has shut down pork imports from the EU. High profitability is expect to inspire additional herd expansion.

Long doesn't expect Russia will reopen trade with the EU anytime soon. This will create a surplus of pork supplies in the EU.

Long said there has been a "massive liquidation of sows in China" - all indications show that over 7 million sows have been eliminated from the herd. In context, 7 million sows is equal to the Canadian and US sow production combined.

"I believe we are going to get a boost in the marketplace in both the EU and North America from China needing to import pork. I don't believe that China will ever be able to recover their production base," Long said. "So this will be a long-term opportunity."

He said that there will still be more pigs in China than anywhere else in the world, but there will be a significant enough import of pork that it will impact the industry for a long time.

The high price of corn and the migration of 20 million Chinese people from rural to urban areas are both contributing factors to sow liquidation in China, Long noted.