This past summer, the International Olympic Committee awarded China the winter games for 2022.
What does that have to do with agriculture, you might reasonably ask?
A look back at 2008 is helpful. That was the year that China hosted the Summer Olympics. China wished to show the world that it had made great strides since undertaking economic reforms in 1978. The foreign power easily has the world’s highest rates of growth for both household and total consumption in recent decades.
While lingering effects are hard to quantify, some analysts believe the games have contributed to a greater expectation among China’s population for a better diet that includes increased protein consumption.
The question becomes where is all that extra needed meat going to come from in the future, especially if push comes to shove and China’s central communist government has to deal with food security issues.
Enter Shangui International, China’s biggest pork producer. Two summers ago, the company purchased U.S. pork producer Smithfield Foods in what was China’s biggest takeover of a U.S. company.
For those wondering, Smithfield is the number one producer of packaged pork products, and it processes about 26 million hogs annually.
So, what would happen if someday all those U.S. produced hogs were loaded on ships to feed China’s population?
I am a big believer of market influences. In the short term, I would anticipate U.S. consumers will pay more for pork until other U.S. producers and packers increase output.
But 26 million is a lot of hogs.
According to the 2012 U.S. Department of Agriculture’s Ag Census, the number of farms selling hogs or pigs decreased from 75,789 to 55,882 since the last census. That’s a roughly 25-percent decline over the five year period from 2007 to 2012.
A USDA website reported that: “Farms specializing in hog production (that is, farms with more than 50 percent of their income coming from hog and pig farming) declined even more, going from 30,546 farms in 2007 to 21,687 farms in 2012 (a 29 percent decline).”
That suggests that the infrastructure needed to raise hogs is also disappearing.
If the United States lost 26 million hogs a year, would there be enough financial incentive for U.S. farmers to take up all the slack? I wonder…
About Dave Dickey
Dickey spent nearly 30 years at University of Illinois at Urbana-Champaign’s NPR member station WILL-AM 580 where he won a dozen Associated Press awards for his reporting. For the past 13 years, he directed Illinois Public Media’s agriculture programming. His weekly column for Big Ag Watch covers agriculture and related issues including politics, government, environment and labor. Email him at firstname.lastname@example.org.
This column reflects the writer’s own opinions and not those of Big Ag Watch.