It’s impossible to tell how China’s discovery of African Swine Fever in its hog herd will affect US/China trade in pork, corn or soybeans, but market analysts said it seems likely that something will change.
As China deals with its third case of ASF, some US commodities traders and analysts responded to email questions about its effect on trade.
The effect on US/China trade will “depend on the extent of the outbreak there in China and how quickly – assuming they can – get it under control,” said Dan Norcini, an off-the-floor commodities trader.
“I would think, however, that it is certainly not a friendly development for corn and bean demand if we see more cases of it popping up,” Norcini said. “The more hogs they have to put down, the less mouths to feed that grain and meal to.”
But in the near term, Norcini said he was “of the view that traders will not focus on it all much.”
Another analyst said China would have to cull a lot of hogs to make much of a difference in the country’s corn and soybean import demand.
“Clearly, China is not finding success in containing this (per the third case reported over the weekend),” said Nevil Speer of Turkey Track Consulting Services. It would seem their appetite for corn and soybeans to feed the domestic swine herd will have to decline.”
“Meanwhile, though, this would seemingly have some major implications for their need to import pork (from the US). And one has to wonder if it doesn’t have some bearing on their willingness to re-enter trade negotiations,” Speer said.
Speer added that from his work on Foot and Mouth Disease, that the first thing to go if consumers can’t purchase product is confidence/trust in the government, and the Chinese government does not want that to happen.
ABOUT ASF
ASF is not quite as contagious as FMD, but it’s harder to eradicate, according to an internet survey of scientific papers. It causes death in almost 100% of hogs that contract the disease, and there is no effective vaccine for control.
It is caused by a DNA virus and is considered a List A disease by the Office International des Epizooties (OIE) because of its potential for rapid dissemination and significant socioeconomic consequences, said the book Diseases of Swine.
ASF was first described in Kenya in 1921 and now is known to be endemic in several sub-Saharan countries where it resides in wild hogs, often without symptoms. Soft ticks have been shown to be the vector that transmits the disease.
Diseases of Swine said ASF has been introduced into other parts of the world by feeding contaminated pork products collected from international airports and seaports, the book said.
An intensive eradication program is needed in China.
CATTLE, BEEF RECAP
Cash cattle traded last week at $109 to $110.50 per cwt on a live basis, down $0.50 to $1.00, and at $173 to $174 dressed, down $2 to $5.
No fed cattle sales were reported Wednesday on the Livestock Exchange Video Auction. Two weeks earlier, 851 head sold at an average price of $110.07 per cwt, versus the last sale at $112 two weeks previous.
The USDA choice cutout Monday was up $2.60 per cwt at $213.98, while select was up $1.37 at $202.29. The choice/select spread widened to $11.69 from $10.46 with 80 loads of fabricated product sold into the spot market.
The CME Feeder Cattle index for the seven days ended Friday, was $149.66 per cwt, up $0.07. This compares with Monday’s Aug settlement of $149.62, down $1.32.