DENVER – Outbreaks of the deadly African Swine Fever (ASF) coupled with trade tensions between the United States and China are potent ingredients for a shakeup in the global market for pork, CoBank’s Knowledge Exchange Division said in a new report.
A recent Reuters report stated China has culled nearly 200,000 swine since the ASF outbreak began earlier this year. Culling has had a negligible impact on China’s swineherd, which represents 50 to 55 percent of the global swineherd. But prices for pork in China have increased 25 percent since July because the ASF outbreak forced the Chinese to implement control measures that constrain the country’s supply chain of pork, CoBank said.
Additionally, Chinese consumers aren’t substituting cheaper proteins — like poultry — for pork even as pork prices climb. “Consumers are concerned about the potential for human deaths caused by avian influenza,” the report stated. “They are also worried about the negative health effects associated with fast-growing birds.”
Finally, higher prices for soybeans and soybean meal, primary feed ingredients, driven by the trade war between China and the US also are impacting protein producers in China.
All of these factors combined could potentially force China to increase imports of pork — but with fewer options for sourcing. “There is a 62 percent tariff on US pork amid the ongoing trade dispute,” the report said. “Also, ASF is threatening to take a toll on European pork producers.”
Ultimately, as pork producers in the European Union, Canada and Brazil move to fill supply gaps, US producers could benefit from reduced global trade competition, especially in Japan and South Korea, according to the report.
CoBank is a $131 billion cooperative bank serving agribusinesses and rural power, water and communications providers across the United States.