There was a time when China’s population obtained most of its calories from carbohydrates like rice, wheat, and beans. But the country’s appetites are changing.
With China’s fast-growing middle class, today’s demand is for more meat protein, and the people’s choice is usually pork.
According to an article in Modern Farmer, Chinese farmers produced 50 million metric tons (mmt) of pork in 2012. This was twice the amount of pork produced in all the E.U. countries combined and five times the amount produced in the United States. Smithfield farms the largest pork producer in the USA is owned by a Chinese company, Shuanghui International Holdings.
The article also estimated that swine production in China reached 723 million head in 2014 – or in other words, more than half of the country’s human population.Or, to put it another way: Over half the world's pigs now live in China.
These numbers raise an obvious question. How is China feeding all of its pigs? The answer appears to be by using more imported grains and with the help of some high-tech Chinese companies.
The pig has long been a symbol of domestic good fortune in China – in fact, the Chinese character for “home” is a combination of the characters for “roof” and “pig.”
According to a United States Department of Agriculture (USDA) report, feeding China’s steadily increasing livestock population is a growing challenge. It takes about 3 kilograms of feed to produce each kilogram of meat. As a result, the USDA predicts China’s combined use of soy meal and corn for animal feed will rise from 200 mmt to more than 300 mmt over the 10-year projection period.Much of this feed grain must be imported.
The USDA expects China’s soybean imports to reach over 70% of global soybean imports by 2024. It also anticipates that China will account for 40% of the rise in global corn trade over the coming decade. (SO WHEN WILL THE CORN PRODUCTION OF THE USA BE DIVERTED FROM ENERGY TO EXPORT FOR FEED?)
But Chinese farmers are also relying on domestic companies in an increasingly high-tech supply chain.
Anyou Biotechnology Group, a company of about 8,000 employees, uses advanced scientific research and precise formulation to produce high-quality livestock feed.Anyou’s products include supplemental nutrition known as “creep feed” that is fed to animals that are still nursing. This technique promotes rapid growth and a higher weaning weight. As one of the Asia Pacific region’s leading creep feed suppliers, many of China’s pigs are raised on Anyou products.
It’s been reported that 10% of all the piglets born in China during 2013 were “Anyou babies.”
Greater Efficiency Feeds Future Growth
Keeping pace with China’s dietary demands will require even greater levels of efficiency in the future.
Anyou has already fortified its operations. Working with MTC with the support of the SAP Partner Quality Program, Anyou standardized its business systems to streamline the company’s financial operations and increase enterprise-wide transparency for more than 40 different subsidiaries, 1300 suppliers, and farmers in 26 provinces across China and Southeast Asia.
Today, unified data management enables faster, more-informed business decisions that help Anyou stay ahead of customer demand. The results are measurable. Anyou reports a 60% increase in operational efficiency and a 10% reduction in operational costs.
Strategic Reserves and Acquisitions
The pig’s importance in Chinese culture is ancient, and the impact of the pork industry on China’s modern-day economy is enormous.
How significant is pork to the Chinese way of life? In closing, consider these two facts.
The United States Department of Energy maintains a strategic petroleum reserve to help mitigate potential supply disruptions. China has a similar stockpile of frozen-pork reserves scattered across the nation in a network of large freezers.
China pays the UK $73 million a year for British pig semen
What is a government to do when its enormous pig population doesn’t stack up in genetic quality? Obvious: call the British and arrange an annual subscription for their finest array of piggy semen. As the Guardian first pointed out, Britain now flies loads of pig loads, both fresh and frozen, to China as a part of the arrangement.
China’s pork industry is looking beyond the country’s borders for more than feed grain. In 2013, the Chinese company Shuanghui International (now known as WH Group), made headlines when it spent a reported US$4.7 billion to buy Smithfield Foods – the largest pork producer in the United States.
This story also appeared on SAP Business Trends.