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Fresh-raw-red-meat-at-the-butcher-2
Fresh-raw-red-meat-at-the-butcher-2

Swine Fever Roils Global Meat Supplies

May 7, 2019
The outbreak of African swine fever in China will have a profound worldwide impact.

The outbreak of African swine fever in China will have a profound worldwide impact, cutting the total global meat supply by up to 5% and driving up prices for all kinds of meat and possibly other proteins, according to meat industry players and observers.

The contagious viral disease has had a catastrophic effect on pork supplies in China, host to the world’s largest hog population. Up to 200 million Chinese hogs are estimated to have been killed as a direct result of the disease, which is not harmful to humans. Wholesale pork prices have risen 21% in China, where per-capita pork consumption, at 67 pounds per year, is third highest in the world.

The effects are already being felt globally, as producers of pork and other meats throughout the world are stepping up exports to China. Australia, for example, has increased beef exports to China by 67 percent in the first quarter of this year. Pork prices have risen sharply in Spain, Germany and other nations. According to USDA estimates, China will step up its share of global imports of pork from 20% last year to 25% this year. It will also increase its share of global beef imports from 17% to 19%, and chicken from 3.7% to 6%.

African swine fever, for which no cure now exists, has yet to appear in North America. The situation in China presents American and other meat processors with some opportunities. Tyson Foods reported a 35% increase in profit in the first quarter. CEO Noel White told stock analysts recently that Tyson expects stronger profits in its processing operations for pork, chicken and beef, although this may be partially offset by higher hog prices.

The situation is complicated by the prospect of increased trade tensions with China. President Trump tweeted on May 5 that he intends to raise the tariff on $200 billion worth of Chinese goods from 10% to 25% by May 10.

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