In the first quarter, the country marketed 170 million pigs, while corn imports surged by fourfold—and farm profitability plummeted by more than 50%!

In the first quarter, thanks to the positive impact of various policies aimed at supporting agriculture, benefiting farmers, and ensuring an effective supply of agricultural products, China's agricultural economy continued its steady improvement, while farmers' incomes saw a consistent rise.

　　Specifically, agricultural production has grown steadily, with significant recovery in hog production capacity. Agricultural trade continues to improve, while agricultural investment is surging, leading to a substantial rise in farmers' incomes. At the same time, it's important to recognize that imbalances and inadequacies in agricultural development remain prominent, and there is still a need to continuously enhance quality, efficiency, and competitiveness.

　　In the first quarter, China’s agricultural production got off to a strong start and has generally returned to pre-pandemic levels. Looking ahead, the agricultural and rural economy is on an upward trajectory, with expectations of a bumper summer grain harvest and a recovery in hog production capacity to near-normal levels. Meanwhile, as efforts to consolidate poverty alleviation achievements continue, the rural revitalization strategy is being comprehensively advanced, while structural reforms on the agricultural supply side deepen further. This ongoing transformation is driving continuous upgrades across the agricultural industry chain and supply network, ensuring that agricultural prospects remain positive. However, given the higher comparison base from the same period last year, the agricultural prosperity index is expected to see a slight decline.

　　According to model calculations, the agricultural economic prosperity index for the second and third quarters of 2021 was 103.2 and 102.6, respectively, while the agricultural economic early warning index remained steady at 96.7 in both periods. As a result, the early warning indicator continued to operate within the normal "green zone."

　　 Pork production showed the most significant growth rate.

　　In the first quarter, the added value of the primary sector reached 1.1332 trillion yuan, representing an 8.1% year-on-year increase and an average growth of 2.3% over the past two years—both showing steady growth momentum.

　　Livestock production capacity is rapidly recovering, with hog production expected to return to normal annual levels. In the first quarter, China’s total output of pork, beef, mutton, and poultry reached 22 million tons—up 3.87 million tons, or 21.4%, compared to the same period last year. Production of all major meat types increased, with pork showing the most significant growth rate. Hog production continues to rebound steadily: hog inventories have risen for six consecutive quarters on a quarterly basis, now reaching 94.2% of levels seen at the end of 2017. As of the end of the first quarter, the national hog inventory stood at 415.95 million heads—a substantial increase of 94.75 million heads, or 29.5% year-on-year, and up 2.3% from the previous quarter. Meanwhile, in the first quarter, China slaughtered 171.43 million hogs, an impressive 40.15 million more than in the same period last year, representing a 30.6% surge. Pork production also soared by 3.31 million tons, marking a robust 31.9% rise compared to the prior year. According to forecasts from the Ministry of Agriculture and Rural Affairs, hog inventories are projected to stabilize at normal yearly levels by June and July, while hog shipments are expected to gradually return to typical annual levels starting in October.

　　Pig farming profitability continues to decline. In the first quarter, the pig-to-feed ratio stood at 9.39:1, marking the second consecutive quarterly drop. Meanwhile, thanks to the effective implementation of policies aimed at stabilizing pig production and ensuring supply, the number of pigs marketed surged significantly, gradually easing market conditions. As a result, pork prices in the first quarter fell by 12.5% year-on-year. Looking at monthly averages, hog prices declined steadily across all three months: January saw prices at 36.0 yuan per kg, February dropped to 31.9 yuan, and March further fell to 28.8 yuan. At the same time that hog prices continued their downward trend, feed costs kept rising, putting further pressure on farmers' margins and driving down overall profitability. According to estimates from the Ministry of Agriculture and Rural Affairs, the expected profit per hog raised during the second week of April was 449 yuan—more than halved compared to the beginning of the year. In some regions, hog prices have already fallen close to the cost threshold, raising concerns about the sustainability of pig farming operations.

　　Poultry meat and milk production continued to rise, while egg production shifted from growth to decline. In the first quarter, the national cattle slaughter volume reached 11.01 million head, up 540,000 head—or 5.2%—compared to the same period last year. Beef production totaled 1.65 million tons, an increase of 90,000 tons, representing a 6.0% growth. Meanwhile, in the first quarter, the national sheep slaughter count stood at 70.59 million animals, up 4.86 million from the previous year—a 7.4% rise. Sheep meat output climbed to 1.04 million tons, marking an 8.3% increase year-on-year, or 80,000 tons more than in the same period last year. In the first quarter, the nationwide poultry slaughter tally hit 3.732 billion birds, up 254 million birds—or 7.3%—from a year earlier. Poultry meat production surged to 5.62 million tons, an increase of 390,000 tons, or 7.4% higher than the previous year. However, poultry egg production dipped slightly to 8.11 million tons, down 170,000 tons, or 2.1% lower compared to the same period last year.

　　 The export situation for competitive agricultural products continues to improve.

　　In the first quarter, China's agricultural product exports reached $18.1 billion, representing an 11.5% year-on-year increase and an average growth of 2.5% over the past two years—marking the end of a streak of consecutive year-on-year declines that had persisted since 2019. As COVID-19 vaccination rates continue to rise steadily, global market demand is gradually recovering. Meanwhile, China has been actively establishing more pilot zones for agricultural opening-up and cooperation, as well as high-quality international trade development bases, accelerating its efforts to deepen agricultural openness. As a result, exports of China’s key agricultural products remain robust: aquatic product exports surged by 15.9% year-on-year, while fresh or refrigerated vegetables continued their upward trend, growing by 3.3%. Additionally, exports of fresh, dried fruits, and nuts jumped by 22.6% compared to the same period last year—expanding by 7.9 percentage points from the previous quarter.

　　In the first quarter, China's imports of grains and grain-based products totaled $4.68 billion, representing a 2.1-fold increase year-on-year. This growth rate was 141.4 percentage points higher than in 2020, marking the fourth consecutive quarter of significant expansion. Notably, imports of wheat, barley, corn, paddy rice, and sorghum all surged substantially. Among these, corn imports saw the fastest growth, reaching 6.73 million tons with an import value of $1.66 billion—up 437.8% and 523.4% year-on-year, respectively. Meanwhile, imports of wheat, barley, paddy rice and milled rice, as well as sorghum, increased by 131.2%, 135.2%, 158.3%, and 222.3% year-on-year, respectively, while their import values rose by 138.5%, 143.5%, 135.0%, and 293.0%, respectively, compared to the same period last year. Soybean imports also showed relatively robust growth, rising 19.0% year-on-year in volume and 41.7% year-on-year in value during the quarter. The substantial rise in grain and grain product imports was primarily driven by the continued recovery of China's domestic livestock industry, particularly the growing demand for feed grains fueled by the rebound in hog production capacity.

　 　Agricultural product prices show a pattern of "three increases and one decrease."

　　In the first quarter, agricultural product producer prices rose 7.8% year-on-year, an increase of 5.9 percentage points compared to the previous quarter, reversing the trend of declining growth that had persisted for three consecutive quarters.

　　From the perspective of agricultural product composition, the four major categories—agriculture, forestry, animal husbandry, and fisheries—showed a "three rises and one fall" pattern: prices in agriculture, forestry, and fisheries increased, while animal husbandry prices declined. Specifically, in the first quarter, agricultural (crop) product prices rose by 17.9% year-on-year, a significant increase of 10.0 percentage points compared to the previous quarter. Meanwhile, forestry product prices climbed 1.5% year-on-year, though the growth rate edged down slightly by 0.2 percentage points. Fisheries product prices also surged by 4.4% year-on-year, marking an uptick of 3.0 percentage points. In contrast, animal husbandry product prices fell by 1.1% year-on-year, though the decline narrowed by 2.2 percentage points.

　　Looking at major agricultural products, as hog production capacity continues to recover, hog prices have continued their downward trend, falling 6.3% year-on-year in the first quarter— a decline that widened by 4.0 percentage points compared to the previous quarter. Meanwhile, beef and mutton prices rose, increasing by 14.9% and 8.5%, respectively, compared to the same period last year.

　　Looking at the three major staple grains, corn prices have surged significantly—driven by the recovery of hog production and rising demand for feed grain—spurring varying degrees of price increases in wheat and rice as well. Data shows that in the first quarter, corn prices rose 41.3% year-on-year, a 24-percentage-point increase compared to the previous quarter. Meanwhile, wheat and rice prices climbed by 7.8% and 6.8%, respectively.

　　Retail sales of grain, oil, and food products—reflecting final consumption—totaled 414.44 billion yuan in the first quarter, representing a year-on-year increase of 10.0%. This growth rate was slightly up by 0.1 percentage point compared to 2020, while the two-year average growth rate stood at 11.3%. As China continues to consolidate and expand its achievements in coordinating epidemic prevention and control with economic and social development, residents' food consumption has largely returned to normal growth levels.

　　 Agricultural fixed-asset investment grows rapidly.

　　In the first quarter, the value-added growth of the agricultural and sideline food processing industry reached 15.2% year-on-year, reversing the four consecutive quarters of year-on-year decline. This significant year-on-year increase in the sector’s value added was driven, on one hand, by the relatively low base from the same period last year, and on the other hand, by the expanding scale of sophisticated processing of agricultural products and the extended length of the agricultural industry chain.

　　Fixed-asset investment in the agriculture, forestry, animal husbandry, and fisheries sectors grew by 43.1% year-on-year, a significant increase of 24.0 percentage points compared to 2020, with an average growth rate of 12.2% over the past two years. Notably, investment in animal husbandry surged by 1.36 times, while investments in agriculture (crop cultivation), forestry, and fisheries rose by 14.8%, 13.4%, and 11.8%, respectively, compared to the same period last year. In the first quarter, fiscal spending on agriculture, forestry, and water-related projects totaled 380.9 billion yuan, representing a 5.5% decline year-on-year—primarily due to reduced spending on capital construction projects.

　　Additionally, in the first quarter, labor productivity in the primary sector reached 4,894.1 yuan per capita (in comparable prices), representing a year-on-year increase of 10.8%. This growth rate was 4.4 percentage points higher than the full-year pace in 2020, with an average two-year growth of 5.3%. Agricultural mechanization and modernization have played a key role in driving up labor productivity.

Source: Economic Daily