China's Strategic Pork Reserve Produces Consequences

China recently set up a strategic pork reserve (really!) to feed the middle class' growing hunger for meat and to prevent the kind of crisis in pork supply that occurred after the outbreak of porcine blue-ear pig disease (PRRS) back in 2008. The outbreak required Chinese pig farmers to slaughter millions of pigs and the ensuing downturn in the nation’s supply caused pork prices to skyrocket.

This spurred the Chinese government into action to try and gain more command over the means of pork production because as Greg Lindsay of Fast Company  points out, “Since Deng Xiaoping, China’s leaders have been obsessed with ‘food security’ the same way America’s are haunted by not having enough oil.” In fact, China already has plans to open up and utilize part of their 200,000 metric ton pork reserve supply, as pork prices have shot up 38 percent in China’s large cities in 2011.  With pork being half the meat China consumes and with demand and prices rising, China is taking their previous swine shortage debacle seriously.
So what prompted this pork craze in China? Due to economic reforms implemented by Deng Xiaoping, industrial agriculture became favored over small farms, making it much easier for China to produce boatloads of cheap pork. While China is nowhere close to having America’s numbers on industrial pig feedlots (which account for 97 percent of U.S. pork production), China has approached 22 percent of their pork production taking place in such factory farms. Up until 2009, most of China’s reserve pork came from the U.S. -- 60 million pounds from Smithfield Foods. Thus, meat consumption of the Chinese middle class has grown four-fold since 1980 and pork consumption has doubled in the last 20 years.

The government’s attempt to grab the reigns of pork production has come with environmental as well as international relations consequences. China has had to significantly increase corn and soybean imports, mainly from the U.S. and Brazil, in order to produce pig feed. In 2010 alone, China imported 50 million tons of soybeans, which makes up over half of soy’s global market while China’s corn imports make up one-third of the growth in world corn trade.

Brazil has quadrupled soybean production from 1995 to 2009, causing the destruction of one million square kilometers of the Cerrado, what is known as some of the most biologically diverse savannah on the planet. Last year, China’s state-owned Chongqing Grain made a $2.5 million contract to produce soybeans in the Bahia state of Brazil and has made similar monolithic deals in other countries ascending from development. China’s soybean imports for animal feed are only expected to grow, by over 50 percent by 2020 says the USDA. Only time will tell what impact this kind of massive projected growth will have on earth's bio-diverse hotspots.

With China’s mounting need for feed-producing land, anxieties grow among countries like Brazil which have become concerned over their increasing economic dependence on China. As Fast Company speculates, “China's attempts to control the means of production in other countries just rising out of developing world is causing tension with its natural allies, and could be just the first step in an ever-escalating series of resource-based conflicts.” Meanwhile, at home, China has lost 20 million acres of farmland since the late 1990s through urban development and natural disasters, further catalyzing the government to look to outside their borders for farmland to grow feed crops.