UPDATE 1-China's pig herd falls 38.7% in August vs year ago - ag ministry

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BEIJING, Sept 16 (Reuters) - China’s pig herd fell by 38.7% in August versus a year ago, according to data published by China’s Ministry of Agriculture and Rural Affairs last week, marking another record drop as the impact of a year-long epidemic continues to emerge.

The country’s sow herd declined by 37.4% versus a year ago, said the ministry.

The huge drop, larger than the prior month’s 32.3% fall, comes after African swine fever, a deadly and incurable disease, spread to every province of the world’s top pork producer.

Pork prices are soaring as a result of the shrinking of the herd, with retail prices hitting a record 40.5 yuan ($5.74) per kg by Sept. 4, according to agriculture ministry data, a 78% jump compared with the same time a year ago.

That has driven the country’s food price index to the highest since January 2012, with surging pork prices spilling over into other proteins.

Beijing has rolled out a series of policies to encourage farmers to expand production to ensure the quick recovery of supplies but in the meantime, it plans to release frozen pork from reserves to help stabilise supplies and prices.

Speaking to reporters at a briefing last week, Vice Agriculture Minister Yu Kangzhen said the African swine fever situation is still “severe”.

Many in the industry believe the impact on the herd is much larger than official data suggest.

($1 = 7.0612 Chinese yuan renminbi)

Reporting by Dominique Patton, editing by Louise Heavens