African Swine Fever to impact global protein markets for years
Wednesday, October 23, 2019
African Swine Fever is likely to have significant effects on global protein markets for the foreseeable future, but while some may be seeing the news as having a silver lining for American pork producers, that is true only if the disease stays abroad.
“The United States began to see direct impacts from the African Swine Fever outbreak in China with a 479 percent jump in pork exports to the country in July and August,” said Derrell Peel, Oklahoma State University Cooperative Extension livestock marketing specialist.
African Swine Fever has been devastating protein markets in Asia – especially China – and other parts of the world for some time and continues to spread.
“The latest data from the U.S. Department of Agriculture’s Foreign Agricultural Service shows the pattern of impacts is beginning to be revealed,” Peel said. “The rebuilding of the global pork industry will take years.”
African Swine Fever is not controlled in most countries where it is currently active. The disease is difficult to eradicate and restocking of animals is typically unsuccessful if it is not completely controlled.
“A point of concern is what happens if the disease does not stay abroad,” said Roy Lee Lindsey, Oklahoma Pork Council executive director. “Oklahoma will be affected if African Swine Fever gains a foothold anywhere in the United States. First, a stop-movement order will be issued for all swine in the country to give USDA and state officials time to investigate and determine how far the disease has spread. We also expect all our export markets to close immediately.”
The resulting loss of export capability would mean about a 25 percent increase in American pork product entering the domestic marketplace. A cascade effect would occur, affecting prices for not only pork but other meats such as beef and chicken as well.
“It is important to note that African Swine Fever is not a food safety threat nor a human health threat,” Lindsey said. “The virus only affects swine. The issue is the disease is highly contagious in swine and has a mortality rate up to 95 percent. It can devastate pork operations for years, causing severe economic hardship to producers and related agribusinesses.”
The current epicenter of the African Swine Fever problem is China which, as recently as 2018, produced nearly half of the world’s pork.
“Estimates of Chinese hog losses since 2018 that have been attributed to the disease range widely,” Peel said. “Most put the number at more than half of total hogs with some estimates coming in at 70 to 80 percent hog mortality.”
Pork production in China is projected to decrease 14 percent in 2019 from 2018 levels, with another 25.3 percent drop year-over-year in 2020.
“That implies a 35.7 percent decrease in Chinese pork production in two years, contributing to a 15.7 percent decrease in global pork production from 2018 to 2020,” Peel said. “It would not surprise anyone if losses in China exceed these estimates.”
In 2018, pork consumption accounted for 74 percent of total Chinese beef, pork and poultry consumption. Losses to African Swine Fever are creating a major protein deficit in China that is affecting protein markets globally as China attempts to mitigate reduced meat supplies.
Total Chinese consumption of pork, poultry and beef is projected to decrease by 14.9 percent from 2018 to 2020, with pork dropping to a 59.8 percent share of total meat consumption. Pork imports are projected to increase 66.6 percent in 2019 compared to 2018 and another 34.6 percent year-over-year in 2020.
USDA data suggests global pork imports will increase 13.5 percent year-over-year in 2019 and another 11 percent in 2020 as China’s share of global pork imports grows from 19.7 percent in 2018 to 35.1 percent in 2020. Global pork exports are expected to increase 11.3 percent year-over-year in 2019 and another 10.4 percent in 2020.
“China is looking to other proteins as well,” Peel said. “Chinese imports of poultry meat are projected to increase 82.7 percent year-over-year in 2019 and another 20 percent in 2020, leading to a two-year increase of 119.3 percent in poultry meat imports in China.”
China’s share of global poultry imports are projected to increase from 3.7 percent in 2018 to 7.3 percent in 2020. World poultry meat exports in 2019 are projected to increase 6.1 percent year-over-year and another 4.4 percent in 2020.
What about other meats? Peel said beef imports to augment protein supplies in China will add to the rapid pace of beef import growth in the country since 2013.
Chinese beef imports are expected to increase 63.6 percent year-over-year in 2019 and another 20.8 next year. China’s share of global beef imports is projected to be 30 percent in 2020, up from 8.6 percent as recently as 2015. Total world beef exports are projected to grow 4.3 percent in 2019 compared to 2018 and another 4.4 percent year-over-year in 2020.
“Worldwide, total global production of beef, pork and poultry is projected to decline by 1.5 percent year-over-year in 2019 and decrease another 2.4 percent in 2020 as a result of decreased pork production caused by African Swine Fever,” Peel said.
At the same time, global meat exports are expected to increase 6.9 percent in 2019 compared to 2018 and grow another 6.1 percent in 2020. As a result, global meat exports are projected to expand from 11.2 percent of total production to 13.2 percent in just two years.
The Oklahoma Cooperative Extension Service is one of two state agencies administered by OSU’s Division of Agricultural Sciences and Natural Resources, and is a key part of the university’s state and federally mandated teaching, research and Extension land-grant mission.
The Oklahoma Pork Council is a producer organization that uses federally collected Checkoff monies to promote pork and pork products, fund research and provide consumers with current food safety information, nutritional value and preparation tips relative to pork products.