Profiles of the Chinese Pig Industry
sp;40% of net assets/equity and other workers can buy the rest. After the reform the state may or may not retain shares in the business. Managers normally have to pay cash or amortize the initial cost of the transaction. Managers are. They are even allowed to buy out the farm using the future earnings in some areas. In addition, the value of a pig farm will be assessed well below the real value in order to make it affordable for managers. Newly created private swine farms can be very competitive due to the low fixed costs and total assets, at least in a short term.
In addition to an immature market economy, poor infrastructure and logistics to handle live animal and chilled pork logistics will remain a major constraint for a long time. Other aspects like production efficiency are also major constraints for many Chinese swine farmers to overcome. This is not limited to technical skills. Perhaps more important is the lack of basic management skills needed to add economic value to a swine operation.
Chinese consumers looking for quality and flavor seem willing to pay higher prices for pork. Pioneering companies have reported success in value-added products when they try to emphasize pork quality by cross breeding lean pigs with local Chinese breeds. Several food producers have already opened specialized stores or supermarket counters for ‘local-flavor pork’. The broiler industry has already experienced a similar change in several provinces in southern China where the fast-growing broilers have now mostly disappeared from the markets due to unfavorable eating quality. Food safety has recently caused a large amountlot of public concerns in China due to a spate of cases where pork was contaminatedfood-related toxicities. In the past 3 years, several human fatalities have resulted from pig farms deliberately adding clenbuterol to increase pig lean content. Complaints and anger from the public have forced the government to impose tighter control and establish strict new laws for quarantine and inspections. The change could potentially deter the new entries of small pig producers and reduce the number of backyard producers who have less control of the quality. Brand 《Profiles of the Chinese Pig Industry(第4页)》
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In addition to an immature market economy, poor infrastructure and logistics to handle live animal and chilled pork logistics will remain a major constraint for a long time. Other aspects like production efficiency are also major constraints for many Chinese swine farmers to overcome. This is not limited to technical skills. Perhaps more important is the lack of basic management skills needed to add economic value to a swine operation.
Chinese consumers looking for quality and flavor seem willing to pay higher prices for pork. Pioneering companies have reported success in value-added products when they try to emphasize pork quality by cross breeding lean pigs with local Chinese breeds. Several food producers have already opened specialized stores or supermarket counters for ‘local-flavor pork’. The broiler industry has already experienced a similar change in several provinces in southern China where the fast-growing broilers have now mostly disappeared from the markets due to unfavorable eating quality. Food safety has recently caused a large amountlot of public concerns in China due to a spate of cases where pork was contaminatedfood-related toxicities. In the past 3 years, several human fatalities have resulted from pig farms deliberately adding clenbuterol to increase pig lean content. Complaints and anger from the public have forced the government to impose tighter control and establish strict new laws for quarantine and inspections. The change could potentially deter the new entries of small pig producers and reduce the number of backyard producers who have less control of the quality. Brand 《Profiles of the Chinese Pig Industry(第4页)》
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