Current methods of keeping foreign animal diseases out of the US likely are adequate to keep African Swine Fever at bay, said David Miller, chief economist for Decision Innovation Solutions, which provides economic analysis and business development services to businesses, in an interview.
Many hog market analysts and producers fear the introduction of African Swine Fever, a deadly hog disease, into the US, but Miller said the current approach to blocking ASF’s introduction into the US is similar to that which has kept Foot and Mouth Disease out of the country. And the protocols have worked, since the US has not seen a case of FMD since 1927.
Miller said good border controls were in place to prevent the spread of foreign animal diseases to US herds. In the case of FMD and ASF, he said ASF was easier to transmit, but FMD was more prevalent in the world.
ASF EFFECT UNDERESTIMATED?
Jennifer Shike of Farm Journal’s Pork wrote an article earlier this month quoting Rabobank analysts who said ASF’s effect on world pork markets was underestimated.
China’s herd loss alone could reach 55% by the end of the year. And for a country with the largest hog herd in the world, that’s a big blow.
What’s more, Rabobank’s Senior Protein Analyst Christine McCracken told attendees at the 2019 Leman Swine Conference that at least 75% of the world’s pork production was at risk of ASF, opening more potential sources of ASF for the US.
Rabobank estimated China’s 2019 pork output could be cut by 25%, the Pork article said. This could lead to more production cuts next year.
Asia certainly has seen its share of ASF outbreaks. China has been well publicized, but Vietnam, the Philippines and South Korea have reported outbreaks as well. Some analysts have said that North Korea also could be infected because of its close proximity to China and South Korea.
US PORK EXPORTS STRONG
China recently made a 1.18 million tonne purchase of US pork, some for delivery this year and some for next year, despite high tariff rates. Some think the US export market would expand greatly if China would remove its tariffs altogether.
Whatever the case for China, Miller said Vietnam, the Philippines and South Korea will import more pork. What will make the difference is how much money each country has to spend on the product.
China can’t import enough, Miller said.
“They would need six times the whole world’s trade last year” to fill the gap in their own production this year, Miller said.
And the rest of the world won’t kick up production enough to feed China, maybe a 10% increase.
CATTLE, BEEF RECAP
Cash cattle trading took place Wednesday at $112 per cwt on a live basis, up $1 to $4 from last week. Dressed-basis trading was reported last week at $174 to $175 per cwt, steady to up $1 from the previous week.
The USDA choice cutout Wednesday was down $0.50 per cwt at $230.05, while select was up $3.10 at $206.67. The choice/select spread narrowed to $23.38 from $26.98 with 77 loads of fabricated product sold into the spot market.
No cattle were tendered for delivery at zero against the Oct live cattle futures contract Wednesday. Two steer contracts were retendered at two, and two steer contracts were demanded at two.
The CME Feeder Cattle index for the seven days ended Tuesday was $145.08 per cwt, up $0.25 from the previous day. This compares with Wednesday’s Oct contract settlement of $146.02, up $0.60, and the Nov settlement of $147.87, up $2.40.