Reports of Chinese pork production returning to levels seen before the African Swine Fever crisis have the Australian red meat industry watching to see how exports may be affected.
With the price of pigs in China falling to five-year lows in 2023, a cheaper supply of domestic pork is available to Chinese consumers, with the nation determined to grow its national herd.
According to China's National Bureau of Statistics, during the first half year, the output of pork, beef, mutton and poultry was 46.82 million tons, up by 3.6 percent year on year.
The figures placed pork output specifically as up by 3.2pc, with 435.17 million pigs registered in stock at the end of the second quarter, reportedly up by 1.1 per cent, with 375.48 pigs slaughtered, up by 2.6pc.
With mutton having experienced increased demand while China sought out alternative protein sources, Mecardo analyst Angus Bown said it was likely that more readily available pork supplies could curb growth in what is Australia's biggest mutton export market.
While imported mutton makes up a small proportion of China's protein supplies, any decline in demand can have a major impact on Australian markets, Mr Brown said.
Mr Brown said while mutton exports to China for July and August were stronger than during the same months in 2022, they were down from May and June, despite strong supplies and low prices.
"Now the pig herd's back, it's combining with other production factors and having an affect on Australian sheepmeat," he said.
"The decline in pork production was a big reason why mutton prices spiked so hard.
"The beef side is a bit more protected, given there's so much competition in the market."
Mr Brown said during 2019 to 2021, the pork deficit in China was 36 million tonnes, compared to the previous three year period.
"Our exports were a drop in the ocean, but the demand no doubt helped support prices," he said.
During the height of the ASF crisis, local governments in southern China reportedly told restaurants to stop inflating the price of mutton in dishes such as Guizhou breakfast dish mutton noodles, according to the South China Morning Post.
According to a report from United States Department of Agriculture into growth potential for China's meat consumption, during the 2018-2019 period household data showed that alongside an 11pc decrease in pork purchases, there was a 3pc increase in beef and mutton purchases and a 20pc increase in poultry purchases as Chinese consumers looked to other meats amidst the pork crisis.
The USDA paper also points out that according to a monthly CPI report during November 2019, consumer meat prices had risen to see mutton 14.3pc higher than a year and beef 22.2pc higher, while pork was 110.2pc more expensive.
However, the USDA report points out that "the small reduction in Chinese household meat purchases seems inconsistent with the much larger decline in pork disappearance and raises questions about the validity of the data".
Global AgriTrends managing director for the USA Brett Stuart said the picture for pork production in China wasn't clear cut, with the nation's hog producers losing money over the last couple of years.
Mr Stuart said historically when Chinese hog farmers lose money they liquidate.
"My numbers show they have now lost money for 21 out of the last 25 months in China and so it's been a really tough situation," he said.
"The top 20 hog farming companies reported losses in excess of $7 billion in the first half of this year so with those kinds of losses you see liquidation.
"I would expect that the Chinese swine herd is much smaller than a year ago and that goes against what the Chinese government puts out.
"I think within the next few months we will probably see Chinese pork prices rising."
Global AgriTrends managing director for Australia Simon Quilty said within China, the different protein types such as beef, chicken and pork don't tend to be interchangeable.
"In China, they're almost mutually exclusive at time, whereby neither really tends to influence the other," he said.
"Chicken prices have not really moved much in 15 years... pork prices fluctuate quite considerably and then at the top of the tree, there's beef prices, which in recent times have fallen a little bit due to too much inventory and a sluggish economy.
"But overall, beef has remained remarkably strong at least since 2019 and there's no doubt that African swine fever helped a lot of consumers in China move across to beef."