Rabobank: ASF impacts becoming clear
By: Erica Shaffer, August 27,2019
UTRECHT, The Netherlands – Structural change is coming to the flow of animal proteins throughout the world as countries in Europe and Asia struggle to mitigate the impacts of African Swine Fever (ASF) on swine herds and pork production, a new report by Rabobank reveals.
It will take at least five years for the worst-affected countries to rebuild swine herds and for pork production to recover in those countries, Justin Sherrard, global strategist – Animal Protein, RaboResearch Food & Agribusiness, said in “African Swine Fever: A Global Update.”
The situation in China has worsened. Rabobank expects production losses of 25 percent in China in 2019 and losses of 15 percent to 20 percent in Vietnam. Herd loss is forecast at 50 percent for the whole year.
“ASF has swept the whole country, but its impacts vary from region to region,” Sherrard wrote. “In the northeast and north, the regions hit first by the disease, the loss has been severe due to lack of experience, a slow reaction and week biosecurity.
“In the south, which was exposed to the disease at a later stage, culling of affected herds and panic liquidation jointly contributed to a sharp decline.”
Declines in pork production have been slower due to the herd liquidation during the first half of the year. “Given the declining sow herd, pig supply in 2020 will be lower than 2019,” Sherrard said in the report. “We expect a further 10 percent to 15 percent drop in pork production in 2020.”
August live hog and pork meat prices have reached record highs in China as a result of declining production levels and an overall shortage of supplies of pork.
To fill the void left by tightening supplies of pork, production of other proteins such as poultry, eggs, seafood and beef are rising, according to Rabobank. Poultry especially will likely see strong growth in production, and momentum is forecast to continue into 2020.
“All other proteins will likely increase production,” Sherrard said, “but at different paces. Due to limited resources, environmental policy and weather, seafood, beef and sheepmeat will all see modest growth.”
Also, China is increasing imports of pork, beef and poultry. Despite the trade war between the United States and China, US exports of pork to China are recording strong volumes despite high tariffs, Sherrard noted.
The European Union, led by Spain, is the leading exporter of pork to China. However, high prices and producers’ cautious approach to production expansion are challenges to the competitiveness of EU pork, according to Rabobank.
Beef exports to China have jumped by more than 50 percent in the first half of 2019 led by Argentina. Brazil, Uruguay and Australia all have seen growth in exports of beef.
In poultry, Brazil dominates poultry exports to China while the EU and Thailand are growing their poultry exports. Russia also has started shipping poultry to China, according to Rabobank.