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Pork shortage hurting Chinese economy

Pork is the fuel that powers the populace. So a shortage isn't just affecting dumplings and stir fry, the staple's 60% price jump is fueling inflation and squeezing household budgets.

September 09, 2011|By David Pierson, Los Angeles Times
  • A butcher offers pork at a market in Shenyang, China. Wholesale pork prices have risen more than 60% this year, causing economic woes. The government is trying to ramp up production.
A butcher offers pork at a market in Shenyang, China. Wholesale pork prices… (European Pressphoto Agency )

Reporting from Beijing — Wang Yuying rattled off the ways she cooked pork at home as if she were Bubba talking about shrimp in "Forrest Gump."

"I can make mu shu pork. I can stir fry it with carrots and cucumbers. I can even 'red' cook it," Wang said, describing the famous sweet and sticky braised pork belly favored by Mao Tse-tung.

But on a recent visit to an open air Beijing food market, the 71-year-old grandmother walked out with only green grapes, lettuce and tomatoes.

"No pork!" she said. "It's too expensive. I'll only eat it if I have to."

These are trying times for China's love affair with the other white meat. Wholesale prices for the staple have climbed by more than 60% this year because of tight supplies; that's fueling inflation and squeezing household budgets. Basic stir-fry meat costs about $2.50 per pound, or about one-sixth a laborer's daily wage.

A Chinese adage goes, "The world will be in peace as long as there are grains and pork." Now consumers are grumbling as they shop for their favorite chewy ribs, lean tenderloin or juicy pig's feet, known as zhu ti.

That's worrying officials in Beijing. Chinese Premier Wen Jiabao has directed the government to ramp up production with investments and subsidies to farmers.

"Stabilizing pork prices is the government's unavoidable responsibility," Wen told state media.

China's leaders have good reason for concern. Pig meat is the fuel that powers the populace. Closing in on 100 pounds per person annually, the Chinese eat about twice as much pork as Americans, stuffing it into their dumplings, barbecuing it with honey and stewing it with pickled greens. As Vice President Joe Biden learned on his recent visit to a Beijing restaurant whose specialties are pork liver and intestine, nary a part of the hog is wasted.

"When someone says they're eating 'meat' in China, they mean they're eating pork," said Feng Yonghui, an industry analyst for the pork market website soozhu.com. "Most people can't live without it."

China, by far the world's biggest producer of pork, is home to about half the world's porcine population with 460 million pigs. That's about seven times more than the United States, the second-largest producer.

But it hasn't been enough to keep a lid on prices, which have risen steeply since the middle of last year. That's when Chinese farmers reduced production in response to high feed costs and shrinking profit margins. A spate of hog diseases also cut into the supply.

China's government is so sensitive to the country's appetite that it maintains a strategic reserve of 200,000 tons of frozen pork. It has tapped that secret stash in recent weeks to increase supply. But analysts said it will make little difference in a nation that consumes 100,000 tons of pork daily.

The meat's importance goes far beyond prices at the corner noodle stand. Economists follow its movements to predict government policy shifts on inflation, which hit a three-year high in July before easing slightly in August. The country's consumer price index last month rose 6.2% from the previous August.

"The continued rise in inflation so far this year, which neither we nor the market had anticipated, was entirely caused by rising prices for pork," Mark Williams, chief China economist at Capital Economics, wrote in a recent research note to clients.

It takes five months to a year to get piglets ready for slaughter. Populations have been growing in recent months. Still, Feng of soozhu.com says there's little policy makers can do but sit and wait.

"The government has limited options," he said. "They can import more, but most of the production is already in China."

The number of pigs slaughtered in July, the latest data available, was about 10% lower than a year earlier, according to the Ministry of Commerce. Meanwhile, production of beef, lamb and poultry is on the rise.

Li Shao, a 65-year-old retiree, is eating more lamb. But the taste for pork is hard to shake. Shopping recently at Wu Mart, a popular Chinese supermarket chain, Li spent 10 minutes picking through a bin of fatty pork, one of the cheapest cuts available. She finally settled on a piece that cost about $5 and told herself that cutting back was probably good for her family's health.

"I'm getting old, and my grandson is only 3 years old," the gray-haired Li said. "It's probably for the better."

Indeed, some say it's time for change in a culture where even vegetarian food is shaped to look like meat and animals.

"Pork prices keep skyrocketing," Liu Yuman, a researcher for the Chinese Academy of Social Sciences, a government think tank, wrote in an editorial in the Beijing Youth Daily last week. "Experts suggest that it's time for consumers to change their buying and eating habits. Chicken is high in protein but low in fat, calories and cholesterol. It should replace pork to become the main dish on people's dining tables."

Fat chance, said Shi Zhijun, owner of a Beijing restaurant that sells pork-filled steamed buns.

"Eating pork is good for people," said the rotund 45-year-old, who uses pork for half the items on his menu. "Everybody should eat at least a half-jin [500 grams] every day. It's very nutritious…. It helps people grow. If you don't eat pork you will be very thin and weak."

It's that sort of devotion that keeps butcher Huang Hajin sanguine about pressure on prices.

Based in central Beijing, he pointed recently to his offerings on a blood-stained wooden table. There were the standard domestic cuts of loin meat and shoulder, as well as feet and thigh bones imported from the U.S. All of it was about 50% more expensive than a year ago, he said.

"But people are still buying," said Huang. "If you don't eat pork, what else can you eat?

david.pierson@latimes.com

Jonathan Kaiman and Nicole Liu in the Times' Beijing bureau contributed to this report.

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