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New Hope joins China's hog expansion frenzy even as pork prices sink
August 29, 2017 / 11:49 AM / 3 months ago

New Hope joins China's hog expansion frenzy even as pork prices sink

BEIJING (Reuters) - New Hope Liuhe Co Ltd has expanded its hog herd this year, it said on Tuesday, the latest meat producer in the world’s top pork consumer to boost output even as a domestic glut grows and prices languish at two-year lows.

The news came as the listed unit of China’s top animal feed producer New Hope Group said first-half profit fell 20.9 percent to 1.1 billion yuan ($166.8 million) as fears about bird flu hurt business.

New Hope Liuhe said it will have more hog production going online in the next two years in provinces including Sichuan, Shandong and Jiangsu, after increasing its herd by more than 2.6 million hogs in the first half, according to the filing.

It did not give further details about the strategy.

The company managed to keep its profit in the first half of the year from hog products around last year’s level by expanding herds to offset falling pork prices, according to the filing.

H7N9 bird flu affected poultry farming and weighed on profit from poultry products, and was the main reason for the drop in the company’s interim net profit, the filing said.

To alleviate impact from bird flu, New Hope Liuhe has pushed into processed meat and fresh meat in the first half, it said.

Earlier this month, China’s top hog farmer Guangdong Wens Foodstuff Group Co Ltd also reported the expansion of its hog herds and processed meat sector as it reported a 75-percent of fall interim profits.

Wens increased its hog herd by 2.74 million in the first half. It produced 17 million hogs in 2016.

Pork belly prices in China have languished at two-year lows of around 27 yuan per kg since June as suppliers rushed to cash in on last year’s record prices for the meat, a staple form of protein at the heart of Chinese cuisine.

Concerns also linger about slowing demand for meat as China’s growing middle class eat more beef and fish.

Reporting by Hallie Gu and Josephine Mason, editing by Louise Heavens

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