China’s Pork Demand Hits a Peak, Shocking Producers

“They like to try to eat more healthy products once a week or fortnight. It’s a big trend for mainland China consumers, especially those aged 20 to 35,” said Ellis Wang, Shanghai-based marketing manager at U.S. food giant General Mills, which owns top dumpling brand Wanchai Ferry.

For pig farmers in China and abroad, it is a difficult trend to stomach. The producers and other market experts had expected the growth to continue until at least 2026.

Chinese hog farmers are on a building spree, constructing huge modern farms to capture a bigger share of the world’s biggest pork market, while leading producers overseas have been changing the way they raise their pigs to meet Chinese standards for imports. Some have, for example, stopped using growth hormones banned in China.

China still consumes a lot more meat than any other country. People here will eat about 74 million tonnes of pork, beef, and poultry this year, around twice as much as the U.S. according to USDA estimates. More than half of that is pork and for foreign producers it has been a big growth market, especially for Western-style packaged meats.

But pork demand has hit a ceiling, well ahead of most official forecasts. Sales of pork have now fallen for the past three years, according to data from research firm Euromonitor. Last year they hit three-year lows of 40.85 million tonnes from 42.49 million tonnes in 2014, and Euromonitor predicts they will also fall slightly in 2017.

Chinese hog prices are down around 25 percent since January, even though official numbers suggest supply is lower compared with last year.

Rare Luxury

Since China began opening up to the world in the late 1970s, pork demand expanded by an average 5.7 percent every year, until 2014 as the booming economy allowed hundreds of millions of people to afford to eat meat more often. During Mao Zedong’s reign as Chinese leader from 1949-76 meat had, for many, been a rare luxury.

Now, growing concerns about obesity and heart health shape shopping habits too, fueling sales of everything from avocados to fruit juices and sportswear.

“Market demand remains very weak. I think one factor behind this is people believe less meat is healthier. This is a new trend,” said Pan Chenjun, executive director of food and agriculture research at Rabobank in Hong Kong.

Sales of vegetable-only dumplings grew 30 percent last year, compared with around 7 percent for all frozen dumplings, Nielsen research also shows.

“Demand for vegetable products keeps rising, giving us large room for growth,” said Zhou Wei, product manager at number two dumpling producer Synear Food.

Guangzhou-based Harmony Catering says health is the key to reduced servings of meat to the roughly 1 million workers eating at its 300 canteens each day.

Staff at the technology companies, banks, and oil majors that are Harmony’s clients will consume about 10 percent less meat today than they did five years ago, but around 10 percent more green vegetables, according to Harmony vice president Li Huang. “It’s mainly because of media, the concept of health has entered popular consciousness,” he said.

For now, it’s mostly urban and white-collar workers paying closer attention to their diets. There’s been, for example, a sharp rise in vegetarian food stations at university campuses. But the government wants a nationwide shift in eating habits.