African Swine Fever Effects on U.S. Markets Linger

January 21, 2020

African Swine Fever Effects on U.S. Markets Linger

African swine fever (ASF) may not be an issue limiting pork production within the United States, but it certainly is an issue affecting pork and crop farmers alike within the nation.

That’s because the disease has already created global economic havoc and has become the demise of many international trade deals. Economists estimate its spread in China led to a 50 cent drop in soybean prices last year. Iowa State University economist Dermot Hayes adds if it was found in the U.S., losses could reach $8 billion for pork producers in one year with feed losses of $4 billion and $1.5 billion for corn and soybeans.

ASF has a devastating impact on swine herds, requiring liquidation. It was first discovered in the country of Georgia in 2007, and has since moved into Russia, the European Union, and China. It is also spreading into North and South Korea, the Philippines, Laos and other Asian countries.

There is little to stop ASF from expanding in many of these areas because there are not good biosecurity protocols in place. Farmers move infected pigs around and feed plate waste garbage that contains meat products with the virus. In fact, ASF may never be fully eradicated.

All Eyes on China

China is taking steps to control the disease, and slow sow herd rebuilding will occur at some point. But U.S. corn and soybeans farmers will see lingering negative effects on feed demand.

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On the other hand, it is possible U.S. pork producers and U.S. feed demand may see an uptick. China accounts for about half of the world’s pork consumption and nearly all of that pork is produced domestically. Any pork shortage in China could boost their imports creating various international trade deals.

Leading pork exporters to China include Canada, Germany, Spain and Denmark. If China’s demand were to increase, each of these country’s abilities to supply that pork will be assessed. Some of these suppliers also are battling ASF or are geographically near ASF-positive countries.

So, does that put U.S. pork in demand in China? The tariff increases from the U.S.-China trade war rendered U.S. pork products uncompetitive. However, if ASF goes out of control in China and Europe, there is a chance China may import from the United States even with the tariff.

USDA forecasts Chinese pork production declined 14 percent in 2019 compared with 2018. Chinese pork prices have already responded to reduced pork supplies by more than doubling year over year. China’s 2019 imports increased almost 67 percent compared with 2018.

Chart: Top pork-importing countries (2015-20)


U.S. pork producers can stand ready for any additional export demand, as 2020 pork production is expected to rise to a new record high. That will help support corn and soybean demand for feed as well. At the same time, the market will continue to assess the impact of ASF worldwide as pork-producing countries work to eliminate the disease and have pork available for sale.

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