African Swine Fever continues to decimate the world’s largest hog herd, and the implications and danger affect US hog and soybean markets, said a story in the Illinois Farm Policy News.
Reporter Laura Reiley reported earlier this month in The Washington Post that, “affected animals have now been reported in every province in China, and the disease has spread to neighboring Mongolia, Vietnam and Cambodia.”
The Post article stated that, “At least 129 outbreaks have been reported since African swine fever was first identified in August, according to China’s National Bureau of Statistics. It estimates that 1 million exposed animals have been exterminated and that the interruption in production has reduced the country’s overall hog population by 40 million.”
The Farm Policy News quoted Dermot Hayes, an economist at Iowa State University who runs a small center that studies Chinese agriculture, as saying, “it’s so much more than 1 million pigs, but no one knows for sure.” China penalizes the “provinces that report the disease, so reporting is not a good measurement.”
Reiley pointed out that, “in March, the USDA announced enhanced biosecurity measures to prevent the disease from spreading to the United States. The agency also expanded its Beagle Brigade, which patrols US ports of entry, to 179 teams across key air and sea ports, where the dogs and their handlers screen new arrivals and check for illegal pork and pork products.”
NO MEAN THREAT
The highly contagious and deadly disease affects domestic and feral pigs and there is no treatment or vaccine available.
Financial Times writer Gregory Meyer reported earlier this month that, “The head of meatpacking company Tyson Foods has warned the ‘threat is real’ that African swine fever could enter the US for the first time, a nightmare scenario for pork exporters.”
Noel White, Tyson’s chief executive, said the disease could spread to the 74.3 million pigs on US farms, which would shut off American pork exports immediately.
In its biannual report on global food markets, the Food and Agriculture Organization of the United Nations said this month that, with the sharp decline in pig inventories, China’s exponentially rising import trend, especially of soybeans, over the past two decades could come to an abrupt halt. And the first signs of a slowdown in soybean imports were already evident in 2018.
Meanwhile, a report earlier this month from USDA’s Foreign Agricultural Service said, “China’s soybean imports are estimated to fall to 84 million tonnes in the 2018-19 marketing year and 83 million tonnes in 2019-20, compared with 94.1 million in 2017-18.”
The sizable decrease in 2018-19 and 2019-20 soybean imports is because of reduced feed demand as a result of in China beginning in August 2018, FAS said. The disease has caused a significant decline in sow and hog inventories, thereby reducing demand for soybean meal for feed. This situation is expected to continue through 2019 and into 2020.
In a separate update this month, FAS explained that, ASF in China will be a game changer for the global oilseed complex, and soybeans in particular, in coming years.
“With declines in China’s imports and crush for 2018-19 and little recovery in demand expected in the coming year, there will be limited opportunity for US producers to see any appreciable draw-down in soybean stocks,” FAS said. “And with a recovery in Argentina’s soybean output, Chinese buyers will have additional supplies to access outside of the US, compared to last year.
“Consequently, large global supplies and lower demand in China will continue to pressure soybean prices; a situation that will likely continue as the industry adjusts to ASF.
CATTLE, BEEF RECAP
Cash cattle trading took place last week in the Plains at $117 to $118 per cwt, down $3 from the previous week. Dressed-basis trade took place at $190 per cwt, down $3 to $5.
The USDA choice cutout Tuesday was down $1.87 per cwt at $219.58, while select was down $1.45 at $206.58. The choice/select spread narrowed to $13.00 from $13.42 with 112 loads of fabricated product sold into the spot market.
The CME Feeder Cattle index for the seven days ended Monday was $132.15 per cwt, up $0.33 from the previous day. This compares with Tuesday’s May contract settlement of $134.37, up $0.22.