January 8, 2020 / 5:28 AM / 19 days ago

UPDATE 2-China's sow herd grows in December, but disease risks remain

(Adds detail, comment)

BEIJING, Jan 8 (Reuters) - China’s sow herd rose 2.2% in December over the previous month, a government minister told reporters on Wednesday, in a sign of improving production after a devastating disease slashed stocks.

China’s sow herd had declined by nearly 40% by last October, according to official data, after African swine fever killed millions of pigs and prevented many farmers from restocking farms.

However, a pick-up began in October and the sow herd has now increased by 7% since September, Yu Kangzhen, vice minister of the Ministry of Agriculture and Rural Affairs, told a briefing on Wednesday.

Following the increase in the breeding herd, stocks of live hogs also began to rise in November, for the first time in a year, the ministry said last month.

Yu did not reveal December data on live hogs, but said that the number of pigs sent for slaughter rose by 14.1% from a month earlier, as farmers liquidated their herds ahead of the Lunar New Year festival later this month.

Farmers typically fatten up their pigs for slaughter prior to the holiday, when pork is in high demand.

Yu reiterated earlier comments by officials that meat supply during the holiday will be sufficient, in part due to the release of frozen pork from state reserves in recent weeks.

China has also been boosting production of other meats to help meet any shortfall. Poultry meat output rose by about 3 million tonnes, or about 15%, in 2019, Yang Zhenhai, director of the ministry’s animal husbandry and veterinary bureau told the briefing.

Still, live hog prices have picked up in the first week of January, and they are expected to keep rising ahead of the holiday due to a severe shortage of fresh pork, Pan Chenjun, senior analyst at Rabobank, told Reuters.

Despite the rise in the sow herd, Yu said preventing outbreaks of African swine fever remained a complex task and was the biggest risk to the herd’s recovery.

While the number of confirmed outbreaks has declined, the virus has spread countrywide and Yu said the chance of fresh outbreaks would increase with growing pig numbers and colder weather that freezes water and makes washing and disinfection more challenging.

“Outbreaks will continue to occur in China,” he said.

Yang said the ministry and local authorities recently investigated 10 reports of outbreaks but only one was confirmed.

Rabobank’s Pan said she believed scattered cases of the disease were still occurring, based on reports by farmers, but not as frequently as before.

The bank predicted in a November report that China’s hog herd would continue to fall in the first half of 2020. It has estimated the herd to be 55% smaller than before the disease outbreak in mid 2018.

Reporting by Dominique Patton; Editing by Clarence Fernandez and Richard Pullin

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