United States

Department

of Agriculture

www.ers.usda.gov

A Report from the Economic Research Service

Abstract

China has become a leading importer of pork as its hog production costs have grown. 

China-U.S. comparisons show that hog producers in China face higher feed and 

labor costs than U.S. producers, while costs of feeder pigs fluctuate from year to year 

in both countries. Efficiency of feed use has improved marginally in China, but it 

remains below that of U.S. farms. Rapid wage growth is spurring China’s transition 

toward larger-scale farms, but labor productivity remains low in hog production. With 

rising production costs, constraints on land use, and stricter environmental regulations 

in China, the country is likely to remain a large importer of pork. 

Keywords: hogs, pork, feed, production costs, efficiency, productivity, imports

Acknowledgments

The author thanks Dr. Dinghuan Hu (Chinese Academy of Agricultural Sciences) for 

providing background materials, and China National Grain and Oilseeds Information 

Center for providing corn and soybean price data. The author thanks the following 

technical peer reviewers for their comments and insight: Dermot Hayes (Iowa State 

University), Elizabeth Gooch (USDA/ERS), Sharon Sydow (USDA/OCE), and Tyler 

Cozzens (USDA/FAS). This report was reviewed and cleared by Shayle Shagam of 

USDA’s World Agricultural Outlook Board. Thanks also to ERS editors Mark Farrell 

and Dale Simms and to ERS designer Cynthia A. Ray.

LDPM-271-01

January 2017

Fred Gale 

China’s Pork Imports Rise 

Along with Production Costs

Approved by USDA’s 

World Agricultural 

Outlook Board
In accordance with Federal civil rights law and U.S. Department of Agriculture (USDA) civil rights regulations and 

policies, the USDA, its Agencies, offices, and employees, and institutions participating in or administering USDA programs 

are prohibited from discriminating based on race, color, national origin, religion, sex, gender identity (including gender 

expression), sexual orientation, disability, age, marital status, family/parental status, income derived from a public 

assistance program, political beliefs, or reprisal or retaliation for prior civil rights activity, in any program or activity 

conducted or funded by USDA (not all bases apply to all programs). Remedies and complaint filing deadlines vary by 

program or incident.

Persons with disabilities who require alternative means of communication for program information 

(e.g., Braille, large print, audiotape, American Sign Language, etc.) should contact the responsible Agency or USDA's 

TARGET Center at (202) 720-2600 (voice and TTY) or contact USDA through the Federal Relay Service at (800) 877-8339. 

Additionally, program information may be made available in languages other than English.

To file a program discrimination complaint, complete the USDA Program Discrimination Complaint Form, AD-3027, 

found online at How to File a Program Discrimination Complaint and at any USDA office or write a letter addressed to 

USDA and provide in the letter all of the information requested in the form. To request a copy of the complaint form, call 

(866) 632-9992. Submit your completed form or letter to USDA by: (1) mail: U.S. Department of Agriculture, Office of the 

Assistant Secretary for Civil Rights, 1400 Independence Avenue, SW, Washington, D.C. 20250-9410; (2) fax: (202) 690-

7442; or (3) email: program.intake@usda.gov.

USDA is an equal opportunity provider, employer, and lender.

Contents

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Background: Expansion and Structural Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Analysis of Production Cost and Productivity Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Prices and Production Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

China-U.S. Production Cost Comparison . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Efficiency Indicators for China Hog Producers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
1

China’s Pork Imports Rise Along with Production Costs, LDPM-271-01

Economic Research Service/USDA

China’s Pork Imports Rise Along with 

Production Costs

Introduction 

China produces roughly half of the world’s pork, but it has nevertheless become a leading importer 

of the meat. China first emerged as a significant importer of pork during 2007-08 when a swine 

disease epidemic reduced domestic supply. Imports declined during 2009-10 when China banned 

pork from the United States—the main supplier at the time—over an alleged disease concern, 

but imports rebounded after the ban was lifted. From 2011 to 2015, China consistently imported 

large volumes of pork each year (fig. 1). Imports soared during 2016 as shrinking Chinese pork 

supplies helped push the country’s pork prices to record levels. China and Hong Kong together now 

constitute the world’s largest import market for pork. The United States was the leading supplier 

of China-Hong Kong pork imports during 2007-12, and the United States was the second-leading 

supplier after Germany during 2013-15.1

1The U.S. share of China-Hong Kong pork imports (Harmonized System code 0203, excluding mainland China 

exports to Hong Kong), rose as high as 39 percent during 2008 and 2012. The U.S. share fell to 12 percent during 2015.

Source: Analysis of USDA, Foreign Agricultural Service, Production, Supply and Distribution data.

1,000 metric tons

Figure 1

China pork trade, 1975-2015

0

100

200

300

400

500

600

700

800

900

1975 1980 1985 1990 1995 2000 2005 2010 2015

China imports

China exports
2

China’s Pork Imports Rise Along with Production Costs, LDPM-271-01

Economic Research Service/USDA

As the Chinese economy enters a new period of urbanization and labor scarcity, its traditional model 

of small-scale “backyard” pork production can no longer meet the country’s growing demand for 

animal protein. Industrialized production models similar to those used in the United States and other 

developed countries are rapidly displacing backyard producers. A swine industry 5-year plan for 

2016-20 by China’s Ministry of Agriculture called for transforming the sector by increasing farm 

size, raising productivity, and overhauling feed and veterinary drug industries to improve the industry’s international competitiveness (China Ministry of Agriculture, 2016). 

Officials in China have taken steps to integrate the country’s meat industry with global markets. 

An October 2015 circular issued by China’s Administration for Quality, Safety, Inspection, and 

Quarantine launched an initiative to build designated entry points to receive, inspect, and distribute 

imported meat. As of September 2016, 56 designated zones had been approved by authorities with 

laboratories and cold storage where containers of imported meat are inspected and tested before 

entering distribution channels in China. The swine industry plan for 2106-20 encouraged Chinese 

companies to collaborate with counterparts overseas to upgrade technology and to compete in international markets. 

China’s growth in pork imports corresponds to growth in its pork price. China’s pork imports were 

negligible during 2005-06 when wholesale pork prices in China and the United States were roughly 

equal (fig. 2). China became a significant pork importer when its pork price rose to about double 

the U.S. price in 2008, but imports declined during 2009-10 as China’s price fell.2 During 2012-15, 

China’s pork price was often as much as double the U.S. price, and China was a significant importer 

2China’s low level of imports largely reflected a ban on U.S. pork for most of 2009 due to purported concerns about 

transmission of H1N1 influenza. 

Dollars per 100 lb

Figure 2

China and U.S. pork: monthly prices and imports, 2005-2016

Note: Imported pork is Harmonized System code 020322--frozen swine meat, hams, shoulders, bone-in. U.S. price is 

wholesale pork cut-out composite price.

Source: China Ministry of Agriculture; U.S. Department of Agriculture wholesale prices for the livestock sector 

(http://www.ers.usda.gov/data-products/livestock-meat-domestic-data.aspx#26178); China customs statistics reported by 

Global Trade Information Services, Global Trade Atlas. 

Thousand metric tons

0

10

20

30

40

50

60

70

80

0

50

100

150

200

250

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

China wholesale pork price

U.S. pork

price

Volume of pork

imported by China 
3

China’s Pork Imports Rise Along with Production Costs, LDPM-271-01

Economic Research Service/USDA

of pork. Monthly imports soared to a new record during 2016 as the China price rose and the U.S. 

price fell. If China’s high price persists, exporters in the United States and other countries will find 

sustained market opportunities there.

This report investigates the role of rising feed prices, wages, and productivity in China that influence 

production costs and pork prices in China. The report compares hog farm production costs in China 

and the United States, and it analyzes trends in feed- and labor–efficiency. The report concludes with a 

discussion of issues facing China’s industry and prospects for future output and trade.
4

China’s Pork Imports Rise Along with Production Costs, LDPM-271-01

Economic Research Service/USDA

Background: Expansion and Structural Change

Swine have been an integral part of Chinese agriculture since they were domesticated there thousands of years ago. Devendra and Thomas (2002) explained that mixing swine and crop production on subsistence farms became prevalent in Asia as a means of obtaining adequate calories from 

intensively cultivated land in densely populated regions. 

Despite its long history, China did not acquire its dominant share of global pork production until the 

20th century. In 1950, China and the United States had roughly the same number of hogs and pigs.3

By 2014, China’s inventory had soared to a much larger number than that of the United States (fig. 3 

and box, “China’s Pork Production May Be Overstated”). The amount of pork produced grew even 

faster as the time needed to raise a pig to slaughter weight shrank from over a year to a few months. 

However, China’s pork industry appears to have plateaued in recent years. The hog inventory 

stopped growing after 2008, and Ministry of Agriculture surveys reported a sharp decline in sow 

numbers during 2014-15 that suggested shrinking production capacity. According to the National 

Bureau of Statistics, production of pork fell 3.7 percent during 2015, and it fell again during the first 

half of 2016. The Ministry of Agriculture (2016) 5-year plan set a target of 57.6 million metric tons 

(mmt) for national pork output in 2020—just 1.6 percent higher than output in 2014. The Ministry’s 

plan called for capping growth in urban areas and regions vulnerable to water pollution, which 

accounted for 39 percent of production.

3The only statistics before 1949 are Buck (1937), who estimated a total inventory of 59 million hogs in 19 core 

provinces. China’s 2006 agricultural census reported an inventory of 353 million head in those same provinces.

Million head

Figure 3

Hog inventory: U.S. and China

Source: China National Bureau of Statistics and USDA, National Agricultural Statistics Service. 

0

50

100

150

200

250

300

350

400

450

500

1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010

China

United States
5

China’s Pork Imports Rise Along with Production Costs, LDPM-271-01

Economic Research Service/USDA

Since the 1950s, the role of pork production in China’s agriculture and food sectors has evolved 

with the level of economic development, and officials have taken many policy measures to cope 

with emerging problems like disease, environmental pollution, and price fluctuations (table 

1). Nearly all of the growth in China’s pork output came from small-scale, dispersed backyard 

producers who raised a few swine as a “sideline” activity. At the peak of backyard hog production, 

China’s 1996 agricultural census found that 135 million rural households raised hogs and pigs—70 

percent of all agricultural households (China National Bureau of Statistics, 2000).4 The 1996 census 

found that 77 percent of those households raised five or fewer swine. According to Zhang (2006), 

small-scale livestock production became predominant in China because a livestock enterprise could 

utilize slack labor, land, and feed resources without cash expense while also supplying manure as 

organic fertilizer for crops. 

Livestock production in China began to shift to a more commercialized mode in the 1990s (Fang 

et al., 2000). Structural change has accelerated as the rising opportunity cost of rural labor and 

declining birth rates reversed the labor-abundance that favored small-scale production. Moreover, 

technical change and capital availability spurred investment in larger-scale specialized farms. 

Growing concerns about water pollution, media reports of carcasses in rivers and canals, and 

disease control have prompted increased enforcement of regulations banning hog farms near 

waterways, roads, residential areas, and markets. Enforcement of requirements regarding treatment 

and disposal of manure raise regulatory compliance costs. Food safety scandals involving meat 

have also prompted meat companies to vertically integrate livestock production and increase the 

scale of farms. For example, after a news media outlet revealed the purchase of hogs fed illegal 

feed additives by a subsidiary of Shuanghui Group—now known as WH Group—the company’s 

4Buck’s (1937) surveys found that 44 percent of households held swine during the 1930s. Unpublished data from 

China’s 2006 agricultural census provided to ERS by China National Bureau of Statistics (2008) showed that 36 percent of 

rural households raised swine.

China’s Pork Production May Be Overstated

Since the 1990s, some analysts have suspected that China’s statistics on pork output and 

hog numbers were substantially inflated by an administrative reporting system that was 

vulnerable to exaggeration by local officials (Zhong, 1997; Fuller, Hayes, and Smith, 2000). 

China’s first agricultural census found that the actual number of swine was 20 percent less 

than statistics reported in 1996 (China National Bureau of Statistics, 2000). Swine numbers 

and pork statistics were revised down following the census, but recent statistics still have 

discrepancies. The China Statistical Yearbook 2015 reported national pork output of 56.7 

mmt for 2014, which equaled 41 kg per person when divided by the national population. That 

was more than double the 20 kg per person of pork consumption estimated by household 

surveys reported in the same yearbook. 

Yu and Abler (2013) made adjustments to resolve the discrepancy between production and 

consumption statistics, but they concluded that pork production and swine numbers were 

overstated by an average of 25 percent from 2004 to 2010. While China’s hog production is 

almost certainly much larger than that of the United States or any other country, the production 

and the inventory of animals shown in figure 3 could be significantly overstated. A new 

agricultural census scheduled for 2017 will provide a new count of swine inventory that could 

lead to further revisions in the statistics. 
6

China’s Pork Imports Rise Along with Production Costs, LDPM-271-01

Economic Research Service/USDA

chief executive announced that the company would launch an initiative to build company-operated 

farms to supply its processing plants (Henan Daily, 2011). In 2013, WH Group purchased the 

U.S. company Smithfield Foods, an acquisition motivated by interest in Smithfield’s integration 

of farming with pork processing (de la Merced and Barboza, 2013). A plan to consolidate pork 

processors formulated by China’s Ministry of Commerce (2013) called for companies to take more 

control over hog production to address other chronic problems such as slaughtering diseased pigs, 

pumping water into carcasses, and feeding restaurant waste to pigs. 

Table 1

China’s hog production policies adapted to changing circumstances

Year Events

1950s Mao Zedong urged communal farms to raise pigs as a source of organic fertilizer for grain crops.

1960s-70s With tight food supplies, authorities prioritized production of food grains over meat.

1980 Livestock was included in market-oriented liberalizations of the centrally planned agricultural 

sector announced by the Communist Party leadership.

1983 Central and local governments launched a set of “lean hog” production bases, setting up 

breeding farms, feed mills, and disease prevention systems.

1985 Hu Yaobang—head of China’s Communist Party—urged increased production of pigs to add 

more protein to the Chinese diet and to supply organic fertilizer for crops.

1989 Pork production was a prominent part of a “vegetable basket” initiative to supply cities with vegetables, meat, and fish.

1994 China liberalized imports of soybean meal and other high-protein feed ingredients.

1999 China liberalized soybean imports, shifting imports from soybean meal to soybeans.

2001 Accession to the World Trade Organization reduced import tariffs for pork.

2006 A livestock modernization program was launched as part of the 11th 5-year plan.

2007 Subsidies for hog producers were introduced: subsidies for artificial insemination, a sow subsidy, 

subsidized insurance for sows, free vaccinations, a subsidy for construction or refurbishment of 

large-scale farms, and transfer payments to major pork-supply counties.

2007 An epidemic of porcine reproductive and respiratory syndrome constrained supplies of hogs, 

causing pork prices to soar, which attracted new attention to pork industry policies and 

investment.

2009 A program was launched to stabilize hog prices by buying and selling reserves of frozen pork. 

2011 A virus caused high mortality among China’s piglets, contributing to another surge in pork prices 

that prompted an expansion of production capacity.

2011 News media revealed widespread use of banned feed additives by hog farmers, prompting 

tighter regulation and pledges by companies to increase vertical integration of pork production.

2013 Thousands of dead pigs were discovered floating in Shanghai’s Huangpu River, contributing to 

stricter enforcement of regulations limiting where hog farms may be operated.

2013 China’s WH Group purchased the U.S. pork company Smithfield Foods.

2014 China’s State Council introduced regulations limiting waste emissions by livestock farms.

2015 China’s Minister of Agriculture led a national conference on livestock modernization that 

encouraged fostering new types of livestock businesses, improved breeds, and strict oversight of 

feed, slaughter, and veterinary drugs. A target of 52 percent of hogs raised by operations of 500 

head or more was set for 2020.

2016 The Ministry of Agriculture’s 5-year plan set objectives of increasing scale of hog farms, utilizing 

hog waste, shifting hogs away from cities and southern watersheds, improving cold chain, 

establishing traceability, and increasing vertical coordination.

Source: Compiled by ERS from Chinese government reports and news media.
7

China’s Pork Imports Rise Along with Production Costs, LDPM-271-01

Economic Research Service/USDA

Zhang (2006) reported that the share of rural households raising hogs and pigs fell from 73 percent 

in 1990 to only 38.3 percent in 2005. Rae and Zhang (2009) reported that nearly 40 percent of rural 

households gave up livestock production between 1995 and 2005 as the sector adjusted to excess 

supply and declining prices. Chen and Rozelle (2005) found that the prevalence of swine production 

waned in more-developed coastal regions, while farmers in less-developed regions retained a strong 

inclination to raise swine. 

According to Ministry of Agriculture data, the share of hogs raised by small operations producing 

50 or fewer hogs per year fell from over 90 percent during the 1980s to 32 percent in 2012 (fig. 4). 

The declining share reflects a 50-percent decline in the number of small-scale farms raising 50 or 

fewer head during 2002-12; the number of small farms decreased by 52 million. In contrast, the 

number of farms raising 50 or more head increased by 1.7 million. Somwaru, Zhang, and Tuan 

(2003) highlighted household-operated farms with 31-100 head as the most cost-efficient farm size, 

but most hogs are now raised on farms producing more than 100 head. Somwaru, Zhang, and Tuan 

identified large-scale farms as primarily state- and collective-owned, but large-scale company- and 

individually operated farms are now becoming common. The number of Chinese farms producing 

5,000 or more hogs and pigs increased from 8,300 to 11,400 during 2009-12.5 

5In comparison, U.S. agricultural census data showed that the United States had 46,747 farms holding hogs and pigs 

during 2012, including 6,953 farms that sold 5,000 or more head. Those 5,000-head farms accounted for over 90 percent 

of hogs and pigs sold in the United States. 

Percent of slaughtered hogs

Figure 4

Share of hog slaughter by scale of operation, 1985-2012

Source: China Ministry of Agriculture, Livestock Industry Yearbooks.

0

10

20

30

40

50

60

70

80

90

100

1985 1993 1996 2000 2002 2004 2006 2008 2010 2012

10,000 or more hogs 

slaughtered annually

3,000 - 9,999

500 - 2,999

100 - 499

50 - 99

Under 50 hogs

Scale of operation:
8

China’s Pork Imports Rise Along with Production Costs, LDPM-271-01

Economic Research Service/USDA

The increase in scale of farms reflects rising labor costs and economies from specialization and 

size as the nature of the industry changes. Increased scale and use of modern inputs has also been 

encouraged by government officials through various subsidies and other initiatives. Beginning in 

the 1980s, officials encouraged imports of “lean-type” swine breeds and adoption of commercial 

feeds that shortened the production cycle and increased the proportion of muscle meat on carcasses. 

A livestock “modernization” initiative launched during the 2006-10 5-year plan included subsidies for building large-scale livestock farms, artificial insemination with semen from improved 

breeds, subsidies for productive sows, subsidized insurance for sows and finishing hogs, and 

free vaccines. Transfer payments to major hog-producing counties helped fund local assistance, 

including subsidized loans and support of rural veterinary services (Tan, 2015). The China Ministry 

of Agriculture’s 5-year plan for hog production during 2016-2020 continues the modernization 

initiative. The plan calls for enlarging the scale of farms in order to raise productivity and to make 

China’s hog producers more internationally competitive (China Ministry of Agriculture, 2016).

The increased scale of operations is concurrent with a change in composition of feed materials. In 

place of large volumes of coarse fodders and wastes, hog producers are using feeds that contain corn 

and soybean meal as the chief ingredients. Liberalization of soybean imports supplied large volumes 

of soybean meal as the main source of protein in feed, while domestic corn production expanded 

to supply energy to feed (Gale, 2015). Larger-scale farmers are more inclined to adopt these new 

breeds, feeds, and other technologies than are backyard producers. 
9

China’s Pork Imports Rise Along with Production Costs, LDPM-271-01

Economic Research Service/USDA

Analysis of Production Cost and Productivity Data

This study analyzes trends in production cost and productivity of feed and labor inputs using data 

from a cost of production survey conducted by China’s planning commission (CNDRC, 2015). The 

survey reports average income and expenses, average weights of piglets and finished hogs, days on 

feed in the finishing stage of production, quantity of feed concentrates, and labor input for thousands 

of hog producers nationwide. Average costs per head, live weights, feed, and labor input have been 

reported annually for small backyard households and “above-scale” producers since the early 1980s. 

The CNDRC data are often used for analysis of China farm costs, including Rae et al.’s (2006) 

study, which reported rapid growth in livestock productivity. However, there are few details 

provided about the data. The sample size has not been reported since the 2002 report revealed that 

hog data were based on records submitted by 2,603 backyard farms and 1,192 above-scale farms. 

No standard errors are published, so statistical testing is not possible. The sample appears to be 

chosen in an ad hoc manner by county price bureau offices that are instructed to choose a few farms 

that are representative of different types of farms in their local area. 

Surveyed farmers record their sales, income, and expenses for the year on a form submitted to the 

county office. The data are compiled at the county, provincial, and national level and then published 

by CNDRC once a year.6 The data from the 1980s and early 1990s fluctuate widely, which could 

reflect errors or misreporting, but data for 1998-2015 appear to be relatively consistent. This report 

analyzes data for 2000-15 in order to discern recent trends. The analysis includes data for backyard 

and above-scale farms and reports the weighted average of several productivity indicators for the 

two farm types to illustrate how the shift toward larger-scale operations affects overall performance 

of the sector. 

The analysis begins by summarizing trends in Chinese pork prices and costs from 2000 to 2015. 

Trends in average unit values of hogs, feed, piglets, and wages calculated from the CNDRC data 

characterize the growth in input and output prices in China during the years when it became a pork 

importer. A second part of the analysis compares major components of hog production costs in the 

United States and China from 2000 to 2015. This analysis is based on similar U.S. and China hogproduction cost estimates from CNDRC data and the USDA Agricultural Resource Management 

Survey (ARMS) reported by U.S. Department of Agriculture (2016). 

The third part of the analysis tracks several indicators that reflect production efficiency and changes 

in production systems from 2000 to 2015. Indicators were calculated separately for above-scale and 

backyard farms, and weighted averages were calculated to assess how structural change from backyard to larger-scale production systems affects the sector’s performance. Indicators were compared 

with estimates from a large sample of U.S. producers tracked during 2007-14 by Stadler (2015).

6Some county and township offices prepare brief reports on an ad hoc basis based on small local samples, which are 

available at http://www.npcs.gov.cn and local government websites.
10

China’s Pork Imports Rise Along with Production Costs, LDPM-271-01

Economic Research Service/USDA

Prices and Production Costs

The average Chinese retail pork price for 2000-16 is compared with CNDRC hog production costs 

per pound of live weight for 2000-15 to illustrate the relationship between pork prices and production costs (fig. 5). The main cost components for producing a live hog are shown separately: the 

costs of a piglet, labor, and feed. Per-head costs were divided by average weight of a finished 

hog. The difference between the retail pork price and hog production cost reflects profits/losses 

by farmers, margins added by processors and traders, and the removal of low-value parts of the 

live animal such as bones, skin, and offal that are not included in the retail price. All values were 

converted to U.S. dollars at the official exchange rate.

The chart shows that the retail price of pork and the production costs of hogs have fluctuated from year 

to year since 2000, but a rising trend is evident in both. Hog production costs constitute about 50-60 

percent of the retail price of pork. Escalating costs place a rising floor under the cyclical fluctuations, 

as the low point of each price cycle moves steadily higher (Gale, Marti, and Hu, 2012). The retail price 

rose to a record high during 2016 (production cost data are not yet available for 2016). 

Feed is the largest component of hog production cost in China. The cost of feed per pound of hog 

live weight equaled about 35 to 40 percent of the retail pork price from 2009 to 2015. Feed’s share 

of the cost of producing a market hog is actually somewhat higher than reported here. Although the 

feed cost of producing piglets in the farrowing and nursery stages of production should be reflected 

by the cost of the piglet, the cost of feed in that stage of production is not shown explicitly in the 

Dollars per lb

Figure 5

China pork price and hog production cost

Note: Hog production costs are for above-scale farms reported by production cost surveys. 2016 retail pork price is 

January-November average.

Source: USDA, Economic Research Service analysis of data from CNDRC and National Bureau of Statistics.

0.00

0.50

1.00

1.50

2.00

2.50

1990 1995 2000 2005 2010 2015

Retail pork price 

Other

Piglet

Feed
11

China’s Pork Imports Rise Along with Production Costs, LDPM-271-01

Economic Research Service/USDA

CNDRC data.7 Labor—including the imputed opportunity cost of unpaid operators and hired labor 

expense—accounts for a relatively small share of production cost for above-scale producers, but 

labor’s share is higher for labor-intensive backyard producers, as will be discussed below. 

The contribution of rising input prices and appreciation of China’s currency were investigated by 

calculating indexes based on unit prices of hogs, feeder pigs, feed, and labor derived from CNDRC 

data. Indexes for these indicators were calculated using their values for year 2000 as a base. These 

indexes were calculated using prices in Chinese currency. A separate index showing the value of the 

Chinese currency against the U.S. dollar was calculated to show the impact of currency appreciation 

on the U.S.-dollar price of Chinese pork. Figure 6 displays indexes of the hog price, piglet price, 

feed price, and currency value for 2000 to 2015. A hog-farm wage index was calculated, but it is not 

displayed in the chart because it grew so much faster than the other indexes.

Like the retail pork price, China’s hog and piglet prices fluctuated from year to year, but they also 

followed a rising trend from 2000 to 2015. In 2015, the average hog price was 253 percent of its 

value in 2000. The hog price never fell below its value in the base year. The index peaked in 2011 

at 281 percent of the 2000 level. The piglet price fluctuated to an even greater degree. Piglet prices 

tend to rise sharply when the industry is expanding faster than the industry can supply them in the 

short run—due to biological constraints. Piglet prices can also fall sharply when breeding programs 

are not immediately curtailed when demand slows. The piglet price index rose to 350 percent of its 

2000 value during 2008, 2011, and 2012. It was 321 percent during 2015. 

7China has no comprehensive statistical data on costs of farrowing and nursery stages of swine production.

Index (2000=100)

Figure 6

China hog farms: feed, piglet, and hog price indexes, 2000-2015

Note: Unit values in Chinese currency for expense items were derived from production cost estimates. Indexes were 

calculated by dividing by values for year 2000. The currency value reflects the U.S.-dollar value of the Chinese yuan using 

the official exchange rate. 

Source: ERS calculations using data from China National Development and Reform Commission and People’s Bank of 

China.

0

50

100

150

200

250

300

350

400

2000 2005 2010 2015

Feed price

Piglet

Hog price

Currency value
12

China’s Pork Imports Rise Along with Production Costs, LDPM-271-01

Economic Research Service/USDA

The average price of feed—the largest component of production cost—increased each year during 

2000-14 before falling slightly in 2015. The 2014 feed price was 280 percent of the price in 2000. 

Most of the growth in feed price occurred from 2006 to 2013. Rising feed prices place a rising 

floor under hog prices, since more costly feed raises the break-even price for hog producers. 

Nevertheless, during 2012-14 hog prices in China fell each year while feed prices continued to rise. 

Wages grew much faster than hog prices. The daily wage paid to hired laborers by hog farms in 

China rose eight-fold during 2000-15. In view of the difference in labor intensity and higher labor 

expense for small farms, the rapid rise in wages is consistent with the rapid withdrawal of labor 

from backyard production.

China’s hog and piglet prices rose faster than the rate of general inflation in China. The consumer 

price index (CPI) in China rose an average of 2.2 percent annually during 2000-15.8 Growth in 

the CPI exceeded 5 percent only 2 years—2008 and 2011 (which were also years of rapid growth 

in retail pork prices). The cumulative increase in China’s CPI was approximately 42 percent from 

2000 to 2015. By comparison, the average hog price rose 153 percent during 2000-15. The hog 

price in U.S. dollars grew even faster—233 percent—after factoring in the cumulative 32-percent 

appreciation of the Chinese currency during 2000-2015. 

Wages in rural China remain very low compared with U.S. wages, despite their rapid rate of growth. 

In 2000, Chinese above-scale hog farms paid hired workers the equivalent of just $0.15 per hour, 

while the wage for hired farm labor in the United States averaged $8.10 per hour that year (table 

2). Chinese wages reported by hog farms doubled every 4 years from 2000 to 2012 and grew 33 

percent from 2012 to 2015. Still, the average Chinese wage reached only $1.76 per hour in 2015. 

The average wage for U.S. hired farmworkers grew to $12.54 per hour in 2015, so the difference 

between U.S. and Chinese farm wages appears to have grown even wider.

In contrast, China’s feed ingredient prices are much higher than in the United States. The difference 

between China and U.S. prices for corn and soybean meal (the main ingredients in hog feed) was 

calculated for each year from 2000 to 2015. Prices are from regions in each country that produce 

hogs, corn, and soybean meal (Shandong, China; Illinois, United States). China’s price of soybean 

meal was consistently 20- to 40-percent higher than in the United States (fig. 7). The higher price of 

soybean meal in China reflects the cost of importing soybeans--the predominant raw material used 

to produce soybean meal in China. The difference in prices is consistent with the cost of freight, a 

3-percent import duty, and a 13-percent value-added tax assessed on imported soybeans. 

The China-U.S. difference in corn prices was larger and more variable. China has a quota that limits 

imports of corn, and the price of corn in China varies independently of international prices. In many 

years, the China corn price was 30-40 percent higher than in the United States. The difference 

widened to 120 percent in 2013 and 180 percent in 2014 when U.S. prices fell but China supported 

prices at a relatively high level. The difference narrowed to 140 percent in 2015 as China reduced its 

support price for corn that year. These price comparisons confirm that hog producers in China face 

much higher feed costs than producers in the United States.

8Average growth in China’s industrial producer price index was even lower, averaging 1.7 percent during 2000-14.
13

China’s Pork Imports Rise Along with Production Costs, LDPM-271-01

Economic Research Service/USDA

Table 2

Hired farm labor wages, China and United States, 2000-2015

Year China U.S. Difference

Dollars per hour

2000 0.15 8.10 -7.95

2001 0.16 8.45 -8.29

2002 0.17 8.81 -8.64

2003 0.17 9.08 -8.91

2004 0.30 9.23 -8.93

2005 0.31 9.50 -9.19

2006 0.38 9.87 -9.49

2007 0.50 10.23 -9.73

2008 0.65 10.60 -9.95

2009 0.73 10.83 -10.10

2010 0.86 10.95 -10.09

2011 1.12 11.07 -9.95

2012 1.32 11.51 -10.19

2013 1.52 11.87 -10.35

2014 1.67 12.07 -10.40

2015 1.76 12.54 -10.78

Note: U.S. wage is for all farm laborers; China is wage paid by above-scale hog farms.

Source: USDA, National Agricultural Statistics Service; China National Development and Reform Commission. 

Percent

Figure 7

Difference between China and U.S. feed ingredient prices, 2000-15

Note: Chart shows percentage difference between China and U.S. price for each commodity. China prices are wholesale 

corn price and ex-factory soybean meal price in Shandong Province; U.S. prices for Illinois.

Source: ERS analysis of data from China National Grain and Oils Information Center; USDA, National Agricultural 

Statistics Service and Agricultural Marketing Service.

0

20

40

60

80

100

120

140

160

180

2000 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15

Corn Soybean meal
14

China’s Pork Imports Rise Along with Production Costs, LDPM-271-01

Economic Research Service/USDA

China-U.S. Production Cost Comparison

In this section, the three main components of hog production costs are estimated over 2000-2015 

for China and U.S. hog farms. Changes in production costs reflect changes in input prices as well 

as the productivity of inputs. 

The CNDRC costs were converted to U.S. dollars at the official exchange rate to compare with 

U.S. hog production costs during 2000-15. U.S. estimates derived from the USDA Agricultural 

Resources Management Survey were obtained from the USDA, Economic Research Service 

(McBride and Key, 2013; U.S. Department of Agriculture, 2016). No adjustments for inflation 

were made to data from either country. Since the CNDRC survey focuses on the finishing stage of 

hog production in which a 15- to 17-kg feeder pig is raised to a market weight of 100-120 kg, the 

CNDRC data were compared with costs for U.S. “feeder-to-finish” farms.9

The CNDRC expenses were converted to values per 100 lb of weight gain in the finishing stage for 

comparability with the U.S. estimates. The following formula was used for calculations: 

Cost

lb

Production expense

Finished hog weight - Pig

$

100−





 



= let weight

x 100

The costs of feed, piglets, and labor—the predominant cost components—were compared for 

China and U.S. feeder-to-finish hog farms each year from 2000 to 2015. The comparisons used 

data for above-scale producers (30 or more head) Chinese farms which now account for most 

production in China.10

Consistent with the growth in feed prices observed above, Chinese feed costs steadily rose above 

those of U.S. farms from 2002 to 2014 before declining in 2015 (fig. 8). Feed cost for China’s hog 

farms more than doubled from $21 to $70 per 100 lb during 2006-2014. U.S. costs rose at a slower 

and more variable pace. U.S. feed costs increased from about $17 to $40 per 100 lb during 2006-

2014. Feed costs declined slightly in both countries during 2015, but the Chinese feed cost was still 

75 percent higher than the U.S. feed cost that year. 

The cost of a feeder pig was calculated by dividing the piglet’s purchase cost by the weight gained 

in the animal’s finishing stage as it grows to market weight (fig. 9). From 2000 to 2006, China’s 

feeder pig cost was consistently less than the feeder pig cost for U.S. producers. The apparent cost 

advantage for China’s feeder pigs until 2006 is consistent with an assessment by Fabiosa et al. 

(2005) that low wages might give Chinese farms a cost advantage in this labor-intensive segment 

of production. However, the China feeder pig cost rose above the U.S. cost during 2007 and 2008 

after a disease epidemic curtailed supplies of feeder pigs in China. Since then, neither country has 

had a clear cost advantage as feeder pig costs became more volatile in both countries. Chinese 

feeder pig costs rose as high as $35 per 100 lb in 2008 but fell to $20 per 100 lb in 2010. The China 

feeder pig cost returned to $75 during another disease epidemic that reportedly caused high piglet 

mortality in 2011 and remained at a similar level until falling to $30 per 100 lb in 2014. U.S. feeder 

9The farrowing and nursery stages are focal points for concern in discussion of productivity problems in the Chinese 

industry. However, no statistical information was available to analyze those stages of production. 

10Note that USDA’s survey excludes hog operations with fewer than 25 head in inventory, a scale comparable to 

China’s backyard producers. According to the U.S. agricultural census, these farms supplied less than 1 percent of U.S. 

hogs and pigs in 2012. In China, operations selling less than 50 head supply over 50 percent of hogs. 
15

China’s Pork Imports Rise Along with Production Costs, LDPM-271-01

Economic Research Service/USDA

$/100-lb weight gain

Figure 8

Feed costs per 100-lb weight gain: China and U.S. hog farms

Note: China costs are calculated based on raising feeder pigs from 16-17 kg to finished hogs of over 100 kg. China cost 

converted to dollars per 100 lb at official exchange rate. Feed expense includes purchased feed, farm-supplied feed, and 

milling charges. Above-scale farms have an inventory of 30 or more hogs. U.S. data are for operations with an inventory 

of 25 or more hogs (see McBride and Key, p. 1). 

Source: China National Development and Reform Commission; USDA, Economic Research Service (2016). 

0

10

20

30

40

50

60

70

80

2000 2005 2010 2015

China "above scale" farms

U.S.

$/100-lb weight gain

Figure 9

Feeder pig costs per 100-lb weight gain: China and U.S. hog farms

Note: Chart shows ratio of feeder pig cost to weight gained in finishing stage of production.

Source: China National Development and Reform Commission; USDA, Economic Research Service (2016).

0

5

10

15

20

25

30

35

40

45

50

2000 2005 2010 2015

China “above scale” farms

U.S.
16

China’s Pork Imports Rise Along with Production Costs, LDPM-271-01

Economic Research Service/USDA

pig costs surged to near $45 per 100 lb during 2014 due to a U.S. epidemic that curtailed piglet 

supplies. U.S. feeder pig costs declined to less than $20 per 100 lb in 2015 after the epidemic was 

curtailed. China’s feeder pig cost rose to $33 that year. 

Despite low wages in China, labor costs per unit of output for China’s hog farms are now much 

higher than in the United States because labor productivity is also very low. From 2000 to 2003, 

China’s above-scale and U.S. farm-labor costs per unit of weight gain were similar, at about $3-4 

per 100 lb (fig. 10). Labor costs in the two countries diverged beginning in 2004. U.S. labor cost fell 

slightly to $2-3 per 100 lb during 2004-2015—reflecting growth in labor productivity—but China’s 

labor cost soared to $16 per 100 lb in 2014-15. The labor cost of China’s backyard farms was even 

higher than that for above-scale farms shown in fig. 10.11

The share of hog production cost attributed to feed, feeder pigs, labor, and other items was calculated for China and U.S. farms for 2000-2015 to show the differing composition of costs in the 

two countries (fig. 11).12 Feed was the predominant component of cost for Chinese hog producers, 

accounting for an average of 57.2 percent of hog production cost. In the United States, feed 

accounted for 40.1 percent of hog production cost, much lower than the share in China. In both 

countries, the feeder pig was the second-largest component of cost for a finishing hog.13 The feeder 

pig cost share was 28.2 percent in China and 35.7 percent in the United States. Labor contributed 

more to cost in China than in the United States, but labor accounted for a relatively minor share 

of cost in both countries. Labor accounted for 7.8 percent of cost in China and 4.3 percent in the 

United States. Finally, “other” cost played a larger role in U.S. hog production than in China, 

reflecting larger investment in facilities, capital, and equipment on U.S. farms. However, anecdotal 

reports suggest that many large-scale, capital-intensive farms are being constructed in China that 

have facilities similar to those in the United States and Europe.

11The labor cost for backyard farms was over $37 per 100-lb weight gain during 2012-15.

12Feed and feeder-pig cost shares varied from year to year, largely due to fluctuations in feeder pig prices. China’s 

“other” cost share and the U.S. labor-cost share both declined from 2000 to 2014.

13The share of feed cost is understated since feed is also a cost of producing feeder pigs. However, no data were 

available to estimate the composition of costs for feeder pig production. 
17

China’s Pork Imports Rise Along with Production Costs, LDPM-271-01

Economic Research Service/USDA

$/100-lb weight gain

Figure 10

Labor costs per 100-lb weight gain: China and U.S. hog farms

Note: China costs are calculated based on raising feeder pigs from 16-17 kg to market weight of over 100 kg. China cost 

converted to dollars at official exchange rate. Labor expense includes hired labor and imputed cost of unpaid family labor. 

Above-scale farms have inventory or 30 or more hogs. 

Source: China National Development and Reform Commission; USDA, Economic Research Service (2016). 

0

2

4

6

8

10

12

14

16

18

2000 2005 2010 2015

China "above-scale" farms

U.S.

Percent

Figure 11

Hog production cost shares, China and United States, 2000-2015 average

Note: Chart is based on cost per 100-lb weight gain. A simple average was calculated for 2000-2015.

Source: ERS analysis of data from China National Development and Reform Commission; USDA, Economic Research 

Service (2016). 

57.2

40.1

28.2

35.7

7.8

4.3

6.8

19.9

0

10

20

30

40

50

60

70

80

90

100

China United States

Feed

Feeder pig 

Labor

Other
18

China’s Pork Imports Rise Along with Production Costs, LDPM-271-01

Economic Research Service/USDA

Efficiency Indicators for China Hog Producers

This section provides further insight about the divergence between China and U.S. hog production costs by assessing indicators of production efficiency for Chinese producers available from the 

CNDRC data for 2000-15. The indexes are shown for backyard and above-scale farms to show the 

difference in efficiency between the two types of farms. A weighted average is also displayed for 

each index as an indicator of how the shift from backyard to above-scale farms has influenced the 

growth in the sector’s efficiency. The indicators were compared with similar indicators from U.S. 

hog surveys by Stadler (2015) and McBride and Key (2013) where available. 

Average daily weight gain

Hogs’ average daily weight gain rose during 2000-15 but remained lower than the U.S. average. In 

2000, the average daily weight gain of China hogs was 1.1-1.2 lb/day. The weight gain improved to 

1.37 lb/day for backyard farms and 1.47 lb/day for above-scale farms by 2015 (fig. 12). The faster 

weight gain in recent years reflects a shift toward “lean-type” swine breeds that add muscle faster, a 

diet richer in protein and energy, improved animal health, and better management.14

14A description in the 1986 China Agricultural Yearbook (p. 81) reported that a sample of “lean-type” hogs gained 

an average of 0.6 kg (1.32 lb) per day. The article claimed that faster weight gain and lower proportion of body fat were 

achievements of the “lean-type hog production base” initiative. 

Pounds per day

Figure 12

Average daily weight gain

Note: Average daily weight gain = (finished hog weight – piglet weight)/(days in finishing stage). U.S. average is for 

conventional finishers. The standard deviation reported by Stadler (2015) was used to calculate an interval to show the 

variation in the U.S. average.

Source: ERS analysis of data from China National Development and Reform Commission and Stadler (2015).

0.0

0.5

1.0

1.5

2.0

2.5

2000 2005 2010 2015

China backyard farms

China above-scale farms

U.S. average (± 1 sd)

Weighted average
19

China’s Pork Imports Rise Along with Production Costs, LDPM-271-01

Economic Research Service/USDA

Faster weight gain corresponds to the shortening of the production cycle. It took about 300 days for 

backyard producers to raise a pig to a market weight of 100-110 kg in 1980. In 2000, the average 

production cycle was 181 days for backyard farms and 151 days for above-scale farms. The production cycle was further reduced to 145 days for above-scale producers during 2014-15.15

Weight gain for U.S. farms reported by Stadler increased from 1.7 lb/day in 2007 to 1.85 lb/day in 

2014. The 2014 U.S. weight gain was 24-percent faster than that of above-scale Chinese producers 

and 39 percent faster than that of backyard producers. The average weight gain for above-scale 

Chinese producers was about two standard deviations below the average reported by U.S. producers 

during 2014.16 The slower rate of weight gain achieved by producers in China may contribute to 

their higher feed cost compared with those in the United States shown earlier in figure 8. 

Feed composition

One of the factors promoting faster weight gain for Chinese hogs is a shift toward use of feed 

concentrates in place of coarse fodder.17 The CNDRC data reports the volume of feed concentrate 

used per hog and expenses for feed concentrates and fodders (table 3). Concentrates, such as grains, 

oilseed meals, brans, beans, and commercial feeds, have high concentrations of energy, protein, and 

other nutrients. Fodders include byproducts of crop production and food processing, food scraps, 

vegetables, and other materials that add bulk to the diet with lower and varying concentrations of 

energy and protein. Fodders were traditionally predominant sources of feed for swine in China 

because they could be procured locally at minimal cost. Use of concentrates has increased as hog 

production became a more commercially oriented activity with greater emphasis on rapid weight 

gain. Anecdotal reports in news media suggest that many farmers in China make cyclical adjustments by substituting less-costly fodders for concentrates during periods of low hog prices. No U.S. 

data on use of fodders is available for comparison; most commercial U.S. hog farms use concentrates as their primary feed.

In 2000, backyard farms used an average of 3 lb of feed concentrates daily per hog, while abovescale farms used 4 lb (fig. 13). The volume used by backyard farms began to increase in 2005, 

and reached 4.28 lb in 2015. Concentrate use by above-scale farms increased to 4.5 lb per day by 

15Zhou, Tian, and Liu (1998) reported average days on feed ranging from 130 to 140 in Henan, Jilin, and Zhejiang 

provinces. They reported a much shorter production cycle of 111 days for backyard producers in Sichuan, which they 

attributed to the use of relatively heavy feeder pigs in that region. 

16The CNDRC data does not report standard deviations nor any other measure of variability in the data, so statistical 

tests cannot be performed.

17A study by Fuller et al. (2001) reported that faster weight gain in Shandong (1.03 lb/day) and Jilin (0.95 lb/day) 

corresponded to a higher proportion of concentrate feeds used in those provinces compared with Sichuan (0.75 lb/day) and 

Chongqing (0.84 lb/day).

Table 3

Two major categories of swine feeds used in China

Type Description

Concentrates (精饲料) Grains, beans, commercial feed, brans, hulls, oilseed meals, and additives

Fodders (青粗饲料) Stalks, vines, tubers, aquatic plants, alfalfa, vegetables, silkworm cocoons, 

food scraps, and byproducts of food processing and distilling

Source: Compiled by ERS from CNDRC.
20

China’s Pork Imports Rise Along with Production Costs, LDPM-271-01

Economic Research Service/USDA

2008 but changed little during 2009-15.18 The 25-percent difference in daily concentrate feed use 

between backyard and above-scale farms narrowed to 5 percent in 2015.

The increase in concentrate use by backyard farms reflects largely a substitution of concentrates 

for fodders. In 2000, concentrates accounted for 82 percent for backyard farms of feed expense 

for backyard farms; fodder accounted for 18 percent (fig. 14).19 (Fodder’s share of volume of feed 

was larger than its share of cost, since fodders have lower prices than concentrate feed—however, 

no information was available to measure the volume of fodder used.) The concentrate share was 

already 95 percent for above-scale farms in 2000. The concentrate share of feed expense for backyard farms increased rapidly and surpassed 95 percent in 2012. The concentrate share of feed 

expense for above-scale farms was near 100 percent during 2010-15.

18The acceleration of concentrate use coincided with a Ministry of Agriculture campaign to “modernize” hog 

production during the 2006-10 five-year plan. 

19Concentrates accounted for less than 60 percent of feed expense during the early 1980s.

Pounds

Figure 13

Daily consumption of feed concentrates per head, 2000-2015

Note: Chart shows ratio of feed consumed to number of days hogs were fed; thus, the ratio is the average daily 

consumption over the life cycle of hogs.

Source: ERS analysis of data from China National Development and Reform Commission.

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

2000 2005 2010 2015

China above-scale farms

China backyard farms

Weighted average
21

China’s Pork Imports Rise Along with Production Costs, LDPM-271-01

Economic Research Service/USDA

Feed conversion ratio

As observed above, weight gain of hogs accelerated over time, but consumption of feed concentrates also increased. The feed conversion ratio (FCR) is an indicator of the efficiency of feed use, 

which shows the pounds of feed concentrates consumed per pound of weight gained in the finishing 

stage of production:20

FCR

Volume of feed concentrates consumed lb

Finished hog =  

( )

weight lb Piglet weight lb . ( ) − ( )

A lower ratio implies greater efficiency. The analysis here reports only the feed conversion for 

concentrates; fodder is not included since CNDRC data do not report quantities of fodder consumed. 

Fodders have a much higher ratio of feed input to weight gain, so the trend in the concentrate feed 

conversion ratio may understate the overall improvement in feed conversion due to the increased 

share of concentrates in feed discussed above. 

Other studies found that FCRs vary widely by stage of production and type of feed used. Earlier 

surveys of China hog farms found values between 3:1 and 4:1 (Zhang and Lu, 1997; Shi, 2003; 

Zhou, Tian, and Liu, 2003). Studies from the 1970s and 1980s found much higher ratios that 

reflected less-efficient breeds and use of large volumes of low-value feeds at that time. Zhou, Tian, 

20The CNDRC data only reports the average weight of marketed hogs and does not reveal whether feed was used for 

sows, boars, or gilts. The inventory of animals is not reported either. 

Percent

Figure 14

Concentrate share of feed expense, 2000-2015

Note: share = concentrate feed expense/(concentrate expense + coarse feed expense) x 100.

Source: USDA, Economic Research Service analysis of data from China National Development and Reform Commission.

40

50

60

70

80

90

100

2000 2005 2010 2015

China backyard farms

China above-scale farms

Weighted average
22

China’s Pork Imports Rise Along with Production Costs, LDPM-271-01

Economic Research Service/USDA

and Liu (2003) attributed surprisingly low FCRs for feed concentrates to the use of large volumes of 

coarse feeds. No previous studies tracked feed conversion ratios over time.

The CNDRC data reveal a decline in the FCR for above-scale farms from about 3.3 in 2000 to 3.0 

to 3.1 during 2006-15, which reflects a moderate improvement in the efficiency of feed use (fig. 15). 

About 7- to 8-percent less feed concentrates are used to produce each pound of weight gain in 2015 

than in 2000. In contrast, the feed concentrate FCR increased for backyard farms from 2.6 in 2001 

to 3.1 in 2015. During 2007-14, the FCR for backyard farms was nearly identical to that of abovescale farms. The increase in backyard FCR likely reflects the shift in feed composition from coarse 

fodder to concentrates reflected in figures 13 and 14. Considering that backyard farms supplemented 

concentrates with more coarse fodder than did above-scale farms, the nearly equal FCR for feed 

concentrates between the two farm types implies that backyard farms are overall less efficient than 

above-scale farms. 

The FCRs for U.S. producers reported by Stadler (2015) were less than those for Chinese producers 

during 2006-2014, indicating that U.S. producers are more efficient at converting feed to weight 

gain than are Chinese producers. The U.S. producers reported slight improvement from 2.82 in 

2008 to 2.66 in 2013. In 2008, Chinese FCRs were about 11 percent higher than the U.S. ratios, but 

the margin between Chinese and U.S. FCRs grew to 14-15 percent in 2013-14. During 2007-10, 

the average Chinese FCR was within one standard deviation of the U.S. average, but in 2014 the 

Chinese average exceeded the U.S. average by 1.4 standard deviations. The data suggest that U.S. 

Ratio

Figure 15

Feed conversion ratios, 2000-15

Note: Feed conversion ratio = (feed concentrate used)/(finished hog weight – piglet weight). U.S. average is for 

conventional finishers. The standard deviation reported by Stadler (2015) was used to calculate an interval to show the 

variation in the U.S. average.

Source: ERS analysis of data from China National Development and Reform Commission and Stadler (2015).

1.0

1.5

2.0

2.5

3.0

3.5

2000 2005 2010 2015

China backyard farms

China above-scale farms

U.S. average

(± 1 sd)
23

China’s Pork Imports Rise Along with Production Costs, LDPM-271-01

Economic Research Service/USDA

producers increased their efficiency advantage over Chinese producers in recent years.21 The 11- to 

15-percent U.S.-China difference in FCR is much less than the 24- to 39-percent U.S.-China difference in daily weight gain shown above in figure 12, suggesting that the faster U.S. weight gain is 

achieved partly by using larger amounts of feed than Chinese farms use.

Labor productivity

Rising labor costs spurred structural change in the North American hog sector during the 20th 

century (Fredeen and Harmon, 1983; McBride and Key, 2013), and labor costs appear to play a 

similar role in China’s hog sector. The labor efficiency of hog production in China has increased as 

production shifted to larger-scale operations with a lower ratio of laborers to hogs. 

A measure of labor input per unit of output was calculated from the CNDRC data to gauge the 

improvement: 

Labor Efficiency

days

lb

Labor per hog days

Weight

 

100





 



= ( )

 . of finished hog lb Piglet weight lb

x

( ) - ( )

100

This measure reflects the average days of labor input during the finishing stage of production. Like 

the FCR, a lower value reflects higher labor productivity.

Labor input in Chinese hog production has fallen dramatically. Backyard farms used 6.6 days of 

labor for each 100 lb of weight gain in 2000, but only 3 days in 2015 (fig. 16). The labor used by 

above-scale farms dropped from 2.4 days in 2000 to 1 day in 2015. Above-scale farms consistently 

used less than half as much labor as backyard farms. Thus, the sector boosted overall efficiency of 

labor use by raising a larger share of pigs on above-scale farms, where labor is more productive than 

on backyard operations. 

Indexes of labor input per 100 lb of weight gain for U.S. hog producers estimated by McBride and 

Key (2013) were much lower than China’s. McBride and Key estimated that U.S. feeder-to-finish 

hog producers used only 0.12 hours per 100-lb weight gain in 2009. China’s labor use (assuming 

8 hours per labor-day) in 2009 was 9.6 hours per 100 lb for above-scale farms and 30.4 hours for 

backyard Chinese farms. The difference reflects larger housing facilities and automated equipment 

on U.S. farms that permit a single worker to handle thousands of hogs (see box, “Verifying Labor 

Productivity Differences”).

21McBride and Key (2013) reported rapid improvement in FCR and lower values than Stadler (2015). They reported 

that the FCR for U.S. feeder-finish producers declined from 3.8 in 1992 to 2.07 in 2009.
24

China’s Pork Imports Rise Along with Production Costs, LDPM-271-01

Economic Research Service/USDA

Labor-days per 100 lb

Figure 16

Hog farm labor efficiency, 2000-15

Note: Feed conversion ratio = (feed concentrate used)/(finished hog weight – piglet weight). U.S. average is for 

conventional finishers. The standard deviation reported by Stadler (2015) was used to calculate an interval to show the 

variation in the U.S. average.

Source: ERS analysis of data from China National Development and Reform Commission and Stadler (2015).

0

1

2

3

4

5

6

7

2000 2005 2010 2015

China above-scale farms

China backyard farms

Weighted average

Verifying Labor Productivity Differences

Calculations using other data confirm that the difference in labor productivity on hog farms in 

China and the United States is quite large. 

The 2012 U.S. agricultural census reported that U.S. farms predominantly engaged in swine 

production produced 179 million hogs and employed 70,800 workers (including both hired 

and unpaid workers), an average of 2,520 head sold per worker.1 China has no statistics on 

employment in hog production. CNDRC data reported an average of 4.8 days of labor was used 

per finished hog, and China produced 698 million hogs in 2012. That implies labor requirement 

of 13.4 million full-time-equivalent workers, assuming full-time employment of 250 days of 

labor per year. 

In fact, hog production is predominantly a part-time activity in China, so a much larger 

number of people are engaged in producing hogs. In 2012, the Ministry of Agriculture 

reported that China had 55 million farms producing hogs. The national output of 698 

million hogs implies less than 13 hogs per farm. Multiplying 13 hogs per farm by the labor 

requirement of 4.8 days of labor per hog implies an average of 62 days of labor per farm 

devoted to producing hogs annually. 

1Data for farms classified in North American Industrial Classification category 1122, “swine farms.”
25

China’s Pork Imports Rise Along with Production Costs, LDPM-271-01

Economic Research Service/USDA

Conclusion

China’s emergence as a pork importer reflects growing resource scarcity as the nature of hog 

production there undergoes dramatic change. As China’s pork prices rise above global prices, 

imported pork and other types of animal protein are becoming more attractive to consumers, processors, and food-service buyers in China. Rising production costs prevent Chinese pork prices from 

declining to become competitive with international prices. 

During the 20th century, China became the world’s leading pork producer by dispersing hogs in 

the backyards of rural households, a production model that utilized China’s abundant rural labor 

supply. As economic growth accelerated, labor was drawn out of the countryside, and falling birth 

rates further tightened the rural labor supply. Improved off-farm employment prospects prompted 

exit from backyard hog production, and the scale and specialization of hog farms increased. Rapid 

improvement in labor efficiency on China’s hog farms is a reflection of the rising opportunity cost 

of rural labor. China’s hog industry is now in an era of rapid consolidation similar to that experienced by the United States during the 20th century (see Van Arsdall, 1978; Fredeen and Harmon, 

1983). Labor efficiency of China’s hog farms is still much lower than that of their U.S. counterparts, 

and McBride and Key (2013) found that labor efficiency on U.S. hog farms continued to improve 

rapidly from 1992 to 2009. While wages are also much lower in China than in the United States, the 

withdrawal of labor from hog farming and consolidation of farms in China is likely to continue. 

Feed is the largest component of production costs for China’s hog farms. Concentrates like grains, 

oilseed meals, and commercial feeds have now largely displaced low-cost fodders traditionally used 

to raise hogs. This study found that feed costs for China’s hog producers were about 20 percent higher 

than those incurred by U.S. producers during 2000, but the difference grew to 77 percent in 2014. 

As a net importer of feed ingredients, growth in feed demand has prompted China to reduce barriers 

to imports of oilseeds and several other feed ingredients since the 1990s (Gale, 2015). Nevertheless, 

China’s feed costs are still higher than those of pork producers in countries like the United States, 

where grain and oilseed prices are lower. The impact of higher production costs on pork prices in 

China may prompt China to import pork from countries with lower production costs, an outcome 

anticipated by Hayes and Clemens (1997). 

Meade et al. (2016) estimated that shipping soybeans from production regions in the United States 

and Brazil added 17- to 29 percent to the landed cost of soybeans arriving in China. This differential 

is consistent with the 20- to 30-percent difference in China-U.S. soybean meal prices found in the 

current study. China exerts stronger control over corn by limiting imports with a tariff rate quota. 

A support-price policy prevented domestic corn prices from falling during years of low global corn 

prices. The China-U.S. differential in corn prices was much larger: 30- to 40 percent in many years 

and 180 percent in 2014. 

Chinese authorities are now allowing China’s corn price to decline, a policy change that could 

reduce cost pressure on the country’s hog producers. Feed costs for China’s hog producers fell 

slightly during 2015, when the support price for domestic corn was reduced by 10 percent. During 

2016, authorities announced that the country’s price floor for corn would be eliminated, and corn 

prices began to fall as that year’s crop was harvested. However, China’s feed costs will likely 

remain higher than in countries with lower grain and oilseed prices despite elimination of the price 
26

China’s Pork Imports Rise Along with Production Costs, LDPM-271-01

Economic Research Service/USDA

floor. For example, China’s soybean meal prices remained higher than U.S. prices, despite elimination of a similar floor price program for soybeans in 2014.

Raising productivity to improve the swine industry’s competitiveness is one of the themes of the 

2016-20 5-year plan for swine production (China Ministry of Agriculture, 2016). The plan calls 

for increasing mechanization and automation on swine farms, shifting pork production to grainabundant regions, and upgrading supporting industries that supply breeding stock, feed, and veterinary drugs. The plan set objectives that include raising the share of hogs produced by farms of 500 

or more head from 42 percent in 2014 to 52 percent in 2020. Exit of small-scale farms with low 

productivity and high production costs is likely to continue. Expansion by larger farms with high 

productivity may be constrained by land scarcity, costs of complying with environmental regulations, and limited supplies of investment capital and skilled farm managers.

This study found rising costs of feeder pigs for Chinese farms in recent years, but it was not able to 

examine productivity in the important farrowing and nursery stages of production. Commentaries 

in Chinese animal science publications often emphasize the low ratio of finished hogs to sows in 

China, which reflects high mortality, short productive lives for sows, and vulnerability to disease 

in this segment of the production chain.22 Increasing the number of finished hogs per sow and 

strengthening disease control and prevention are also objectives of the 2016-20 5-year plan that 

reflect these concerns. More productive and long-lived sows reduce the cost and feed requirements 

of supporting a large sow population and holding back female pigs to become replacement gilts. 

Officials subsidize artificial insemination to upgrade and standardize breeds and reduce the inventory of boars needed to service the sow herd (Tan, 2015).

Other costs may be more significant than they appeared in the data examined by this study. For 

example, the data showed very low expenses for land and capital investment, but acquiring tracts of 

land and constructing modern facilities for large farms is clearly much more costly than rudimentary structures used by small-scale producers to house animals. Large farms have greater needs for 

working capital to finance feed purchases and wages that small farms often finance with cash flow 

or borrowing from informal sources. Anecdotal information suggests that small-scale farms often 

invest little in facilities for waste treatment and disposal, but large farms are more likely to make 

such investments given the volume of waste they produce. Large farms are less able to avoid attention from inspectors and regulators than are small, dispersed farms. More stringent regulation of hog 

production will reduce external costs of water pollution, disease, and other nuisances, but will raise 

costs for producers and constrain the expansion of the hog sector.

The 5-year plan specifically targets improvements in feed conversion and labor productivity. 

Improvements in feed efficiency can be achieved through various measures that include better 

design of facilities such as better heating, cooling, and ventilation; mixing feed to balance protein, 

energy, and micronutrients appropriate to the stage of production; reducing mycotoxins and other 

impurities in feed through better quality control; and better disease management. The large shortfall 

in China’s labor productivity likely reflects more extensive use of labor due to low wages, but low 

labor productivity could also result from lack of training and high worker turnover. Johnson (2015) 

and Ellerman (2016) identified several avenues for improving management of Chinese hog farms, 

such as reducing employee turnover; optimizing temperature, lighting, and sanitation in barns; better 

22Zhang (2015) reported that most farms he visited during 2014-15 were experiencing financial losses, but some were 

profitable because they managed sows well. He advised farms to focus on preventing several diseases and disorders that 

reduced conception rates, increased stillbirths, and piglet mortality.
27

China’s Pork Imports Rise Along with Production Costs, LDPM-271-01

Economic Research Service/USDA

monitoring and management of sows; improvements in the way vaccines are supplied and administered; and screening diseased animals. 

China’s national 5-year plan for 2016-2020 advocates strict controls on use of cropland that may 

restrain growth of hog production. The 5-year plan orders officials to restrict conversion of cropland to livestock farms and other uses in order to maintain production of staple food crops viewed 

as essential to national food security. A reform of grain subsidies announced in 2016 calls for 

withholding subsidy payments for cropland that has been converted to livestock farms (Central 

Government Web Portal, 2016). 

Environmental concerns may also constrain growth in China’s hog farms. China’s 5-year plan 

for hog production calls for removing farms from major urban areas and southern regions that are 

vulnerable to water pollution. The plan targets the northeastern grain-producing region and traditional hog-raising areas of southwestern provinces for growth. The plan may raise costs for Chinese 

producers by requiring treatment facilities for manure and investment in biogas equipment. 
28

China’s Pork Imports Rise Along with Production Costs, LDPM-271-01

Economic Research Service/USDA

References

Buck, J.L. 1937. Land Utilization in China. New York: The Council on Economic and Cultural Affairs.

Central Government Web Portal (China). 2016. “Nongye ‘San Xiang Bu Tie’ Gaige Quanmian 

Tuikuai [Reform of agricultural ‘three subsidies’ pushed nationwide],” April 26. http://www.gov.

cn/xinwen/2016-04/26/content_5067841.htm (accessed August 2016).

Chen, J., and S. Rozelle. 2003. “Market Emergence and the Rise and Fall of Backyard Hog 

Production in China.” Paper presented at American Agricultural Economics Association meeting, 

Montreal, Canada, 27-30 July. 

China Ministry of Agriculture. 2014. Livestock Industry Yearbook. Beijing: China Agricultural Press.

China Ministry of Agriculture. 2015. “Han Changfu Buzhang he Yu Kangzhen Fubuzhang zai 

Quanguo Xiandai Xumuye Jianshe Gongzuo Huiyi Shangde Jianghua [Address by Minister 

Han Changfu and Vice Minister Yu Kangzhen to National Meeting on Livestock Modernization 

Work],” bulletin no. 32, released July 7. http://www.moa.gov.cn/govpublic/XMYS/201507/

t20150703_4731095.htm (accessed August 2016).

China Ministry of Agriculture. 2016. Quan Guo Sheng Zhu Fazhan Guihua (2016-2020) [National 

Hog Production Development Plan 2016-2020]. Nong Mu Fa (2015) no. 6. 

China Ministry of Agriculture Press Office. 2016. “Nongye Bu Jie Du ‘Quan Guo Sheng Zhu 

Shengchan Fazhan Guihua 2016-2020’ [Ministry of Agriculture Explains ‘National Hog 

Production Development Plan 2016-2020’],” April 21. http://www.moa.gov.cn/zwllm/

zwdt/201604/t20160421_5102287.htm (accessed August 2016).

China Ministry of Commerce. 2013. 2012 Nian Sheng Zhu Tuzai Hangye Fenxi Baogao

[2012 Hog Slaughter Industry Analysis Report]. http://images.mofcom.gov.cn/

scyxs/201305/20130531172349338.doc (accessed July 2016).

China National Bureau of Statistics. 2000. “Sheng Chu Siyang Shuliang, Guimo he Jiegou 

[Numbers, Scale, and Structure of Livestock Raising],” in Nongcun Jiben Guoqing Guoli 

he Shequ Fazhan Yanjiu [Research on Rural Features, National Strengths, and Community 

Development], Beijing: China Statistics Press, pp. 13-15.

China National Bureau of Statistics. 2008. Unpublished tabulations of livestock production from 

China’s second agricultural census.

China National Development and Reform Commission (CNDRC). 2015. Quan Guo Nongchanpin 

Chengben Shouyi Ziliao Huibian [Compilation of Materials on National Agricultural Product 

Cost and Returns]. Beijing: China Statistics Press.

De la Merced, M.J., and D. Barboza. 2013. “Needing Pork, China Is to Buy a U.S. Supplier,” The 

New York Times Dealbook, May 29. http://dealbook.nytimes.com/2013/05/29/smithfield-to-besold-to-shuanghui-group-of-china/?_r=0 (accessed August 2016).

Devendra, C., and D. Thomas. 2002. Crop-Animal Systems in Asia: Importance of Livestock and 

Characterisation of Agro-ecological Zones, Agricultural Systems, vol. 71, issues 1-2, pp. 5-15.
29

China’s Pork Imports Rise Along with Production Costs, LDPM-271-01

Economic Research Service/USDA

Ellermann, M. 2016. “Top 5 Breeding Challenges in China,” Pig Progress, vol. 32 (July). http://

www.pigprogress.net/Sows/Articles/2016/7/Top-five-breeding-challenges-in-China-2844412W/

Fabiosa, J.F., D. Hu, and C. Fang. 2005. Case Study of China’s Commercial Pork Value Chain.

MATRIC 05- research paper MRP 11, Iowa State University. http://lib.dr.iastate.edu/matric_

researchpapers/2/, accessed December 9, 2015. 

Fang, C., F. Fuller, M. Lopez, and F. Tuan. 2000. “Livestock Production Slowly Evolving From 

Sideline to Principal Occupation,” in H.-H. Hsu and M. Lopez, China: Situation and Outlook 

Series, International Agriculture and Trade Reports, WRS-99-4. https://www.ers.usda.gov/

webdocs/publications/wrs994/54066_wrs99-4.pdf (accessed December 2016).

Fredeen, H.T., and B.G. Harmon. 1983. “The Swine Industry: Changes and Challenges,” Journal of 

Animal Science, vol. 57, pp. 100-118.

Fuller, F., D.J. Hayes, and D. Smith. 2000. “Reconciling Chinese Meat Production and 

Consumption Data,” Economic Development and Cultural Change, 49(1):23-43.

Fuller, F., D. Hu, J. Huang, and D.J. Hayes. 2001. Livestock Production and Feed Use by Rural 

Households in China: A Survey Report. Staff Report 01 SR-96, Iowa State University Center 

for Agricultural and Rural Development. http://lib.dr.iastate.edu/card_staffreports/20/ (accessed 

August 2016).

Gale, F. 2015. Development of China’s Feed Industry and Demand for Imported Commodities, 

USDA, Economic Research Service. FDS-15K-01. https://www.ers.usda.gov/webdocs/publications/fds15k01/55490_fds-15k-01.pdf (accessed December 2016).

Gale, F., D. Marti, and D. Hu. 2012. China’s Volatile Pork Industry. USDA, Economic Research 

Service. LDP-M-211-01. http://usda.mannlib.cornell.edu/usda/ers/LDP-M/2010s/2012/LDP-M02-07-2012_Special_Report.pdf (accessed December 2016).

Hayes, D., and R. Clemens. 1997. The Chinese Market for U.S. Pork Exports. Iowa State University 

Center for Agriculture and Rural Development, Briefing paper 97-BP 14. http://www.card.

iastate.edu/products/publications/synopsis/?p=194 (accessed August 2016).

Henan Daily. 2011. “Ziji Yang Zhu Jiu Neng Chi Shang ‘Fangxin Rou’ [Meat Can Be Eaten with 

Assurance if We Raise Pigs Ourselves].” March 31.

Johnson, E.W. 2015. Major Pig Diseases in China. Pig International, January/February, pp. 24-27. 

http://www.wattagnet.com/articles/25251-major-pig-diseases-in-china (accessed August 2015).

Key, N., and W. McBride. 2007. The Changing Economics of U.S. Hog Production. USDA 

Economic Research Service, ERR-52. https://www.ers.usda.gov/webdocs/publications/

err52/12767_err52.pdf (accessed December 2016).

McBride, W.D., and N. Key. 2013. U.S. Hog Production From 1992 to 2009: Technology, 

Restructuring, and Productivity Growth. USDA Economic Research Service, ERR-158. https://

www.ers.usda.gov/webdocs/publications/err158/40364_err158.pdf (accessed December 2016).

Meade, B., E. Puricelli, W.D. McBride, C. Valdes, L. Hoffman, L. Foreman, and E. Dohlman. 

2016. Corn and Soybean Production Costs and Export Competitiveness in Argentina, Brazil, 
30

China’s Pork Imports Rise Along with Production Costs, LDPM-271-01

Economic Research Service/USDA

and the United States. EIB-154. USDA/ERS. https://www.ers.usda.gov/webdocs/publications/

eib154/59672_eib-154_errata.pd. (accessed December 2016).

Rae, A.N., H. Ma, J. Huang, and S. Rozelle. 2006. “Livestock in China: Commodity-Specific Total 

Factor Productivity Decomposition Using New Panel Data,” American Journal of Agricultural 

Economics, vol. 88, No. 3, pp. 680-695. 

Rae, A.N., and X. Zhang. 2009. “China’s Booming Livestock Industry: Household Income, 

Specialization, and Exit,” Agricultural Economics, vol. 40, pp. 603-616.

Shi, Z. 2003. China’s Livestock Structural Changes and Feed Efficiency. University of Arkansas 

Master of Science thesis. 

Somwaru, A., X.H. Zhang, and F. Tuan. 2003. “China’s Hog Production Structure and Efficiency,” 

Paper presented at AAEA meeting, Montreal, Canada, 27-30 July.

Stadler, K.J. 2015. U.S. Pork Industry Productivity Analysis. National Pork Board Research Grant 

Report, 2015 (earlier years also available). http://www.pork.org/wp-content/uploads/2010/04/

pork-industry-productivity-analysis-2015-summary.pdf (accessed December 2015).

Tan, Y. 2015. A Study on Perfecting the Subsidy Policy of China’s Hog Industry. Beijing: China 

Economic Publishing House.

U.S. Department of Agriculture, Economic Research Service. 2016. “Commodity Costs and 

Returns.” http://www.ers.usda.gov/data-products/commodity-costs-and-returns.aspx (accessed 

November 2016).

Van Arsdall, R.N. 1978. Structural Characteristics of the U.S. Hog Production Industry. 

Agricultural Economic Report No. 415. U.S. Department of Agriculture, Economics, Statistics 

and Cooperatives Service. http://naldc.nal.usda.gov/naldc/download.xhtml?id=CAT79708653&c

ontent=PDF (accessed December 11, 2015).

Yu, X., and D. Abler. 2014. “Where Have All the Pigs Gone? Inconsistencies in Pork Statistics in 

China,” China Economic Review 30: 469-484.

Zhang, X. 2006. “Zhongguo Xiao Nonghu Xumuye Fazhan Qushi Yanjiu [Animal Husbandry 

Trend of Chinese Peasant Household],” Nongye Zhanwang [Agricultural Outlook] issue 12.

Zhang, X., and M. Lu. 1997. Wo Guo Nonghu Sheng Zhu Siyang Guimo ji Siliao Zhuanhua Lu 

Bianhua Qushi Tantao [Discussion of Trends in Hog Farming Scale and Feed Conversion in Our 

Country]. China Rural Economy 5:53-55.

Zhang Z. 2015. “Yang Zhu Zhuan Qian Cong Mu Zhu Kaishi [Profitable Hog-Raising Starts with 

Sows]. China Animal Husbandry no. 23. http://www.cav.net.cn/news/201510/30/3020.html 

(accessed August 2016).

Zhong, F. 1997. “Guanyu Roulei Shangchan Tongji Shuzi Zhong de Shuifen ji qi Yuanyi de Fenxi 

[Analysis of Exaggeration in Meat Production Statistics and Reasons for It],” Chinese Rural 

Economy, no. 10, pp. 63-66.
31

China’s Pork Imports Rise Along with Production Costs, LDPM-271-01

Economic Research Service/USDA

Zhou, Z.-Y., W. Tian, and X.-A. Liu. 2003. Developments and Trends in Household AnimalRaising Practice in China: A Survey Report, in Z.-Y. Zhou and W.-M. Tian, China’s Regional 

Feedgrain Markets: Development and Prospects. Sydney: Grains Research & Development 

Corporation.