KANSAS CITY — A massive outbreak of African swine fever (A.S.F.) in China, with the disease spreading to other Southeast Asia countries as well, has reduced the source of protein for humans in China and has reduced the flow of feed ingredients going into China. Meanwhile, the United States remains highly vigilant to keep A.S.F. at bay, in what some say is a matter of when, not if, the disease reaches North America.
China accounts for about half of the world’s pork production and consumption with a herd estimated at 710 million (compared with a U.S. hog inventory of 74 million on March 1) prior to the A.S.F. outbreak that was first reported in 2018. The country reports that 21% of its total herd has been lost to the disease as of April, but other estimates put the loss much higher.
“Last August when the first cases of African swine fever were announced in Northeast China, it was immediately clear that the global pork sector — and every industry that competes with, or supplies, it — would be affected,” CoBank’s Knowledge Exchange Division said in a recent report.
CoBank noted that every Chinese province now has A.S.F., as well as Cambodia, Thailand, Vietnam and North Korea. Two cases also have been reported in Hong Kong slaughter houses involving live hogs shipped from mainland China, according to the U.S. Department of Agriculture. China has since suspended all live hog shipments to Hong Kong.
“Given the drastic shortage of fresh pork, retail prices have spiked between 60% to 100% in various (Hong Kong) districts,” the U.S.D.A. said, “and consumers have switched to buying chilled/frozen meats.”
A.S.F. has adversely affected global hog herds for about a century, with Eastern Europe and Russia struggling to control it in recent years. It is thought that wild boars in those regions may have brought the disease to China. Heavy reliance on “backyard” production, which makes up an estimated 30% to 40% of hog farms in China, makes control difficult because feed often includes waste materials that may transmit the disease, although it should be noted that A.S.F. is not transmittable to humans.
“Losses are challenging to quantify, and the estimates range widely, but most projections call for China to lose roughly one-third of its hog production over the next 12 to 18 months,” CoBank said.
Demand for protein, especially pork, has grown along with China’s economy as diets improve. CoBank noted that Chinese consumers already are switching from pork to chicken and to a lesser extent to beef, but domestic production of those meats will “struggle to fill the void” because the average consumer in China eats about 3 lbs of pork for each 1 lb of chicken and beef.
“The region will have a massive shortfall in animal protein supply in 2019, 2020 and possibly for years to come,” CoBank said. The report suggested Chinese consumers will buy more imported pork and domestic and/or imported beef, poultry and fish.
“Imports will play a big role in helping to keep animal protein available to China’s 1.4 billion consumers,” CoBank said.
The U.S. meat and poultry sectors are in a “strong position to be a major beneficiary as China and other Asian markets ramp up their imports of all proteins,” the report said. “But even with the 7 million tons of protein the U.S. exports each year, it can’t keep pace with the supply gap caused by A.S.F.”
U.S. exports also may be hindered by the trade war between the United States and China, with Chinese tariffs on U.S. pork currently at 62%, CoBank said, which will “clearly dampen the upside trade potential” for U.S. pork exports.
Another limit to export growth is China’s ban on U.S. poultry, which has been in place since the outbreak of highly pathogenic avian influenza in the United States in 2015.
Finally, CoBank noted, “An outbreak of A.S.F. in the U.S. pork industry would bring with it a shuttering of the trade flows.”
While it’s thought an outbreak of A.S.F. in the United States would be much less devastating than in China, CoBank contends it would be “far more damaging” to the U.S. pork sector than the outbreak of bovine spongiform encephalopathy (mad cow disease) was to the beef industry 15 year ago, because a much larger percentage of U.S. pork is exported than is beef (about 12% of beef versus about 23% of pork is exported).
The sharp drop in China’s hog herd will negatively impact the U.S. grain and feed market, CoBank said, as “elevators, feed mills and soybean crushers focused on feed exports to China will be hurt directly.” The precipitous drop in U.S. soybean exports to China (by far the largest buyer of U.S. and world soybeans), meanwhile, has been attributed to the trade war rather than to A.S.F.
The U.S.D.A. has for several weeks noted reduced exports of U.S. dry whey and lactose to China, both of which also are used to boost protein in hog feed.
There has never been an outbreak of A.S.F. in the United States, and presence of the viral disease in the Western Hemisphere has been eradicated in South America and the Caribbean, according to Iowa State University (32% of U.S. hogs are in Iowa). But the disease is nearly everywhere else.
The National Pork Producers Council in April canceled its World Pork Expo originally scheduled to be in Des Moines, Iowa, this month “out of an abundance of caution” to limit international traffic (expo attendance typically is around 20,000) that may have brought the disease (for which there is no vaccine) into the United States.