Health officials in Hanoi, Vietnam, spray disinfectant on a dead pig at a farm before burying it in an isolated quarantined pit to stop the spread of African swine fever. Manan VatsyanyanaAFP/Getty Images

An outbreak of African swine fever, a highly contagious disease that’s been called “pig Ebola,” is ravaging Asia’s pig industry with no signs of letting up.

The current outbreak of the virus, which kills almost all animals it infects, began in China in August. Since then, some 22 percent of the country’s pig herd has been lost to the disease and to culling, Christine McCracken, an animal protein expert at Rabobank, told Vox.

African swine fever is also now spreading in several countries neighboring China, including Mongolia, Russia, Cambodia, and Vietnam. The map below shows current outbreaks in Asia, as reported to the World Organization for Animal Health, or OIE.

The disease, which was discovered a century ago in Kenya, is particularly deadly to pigs because it spreads easily and there is no treatment or vaccine. The only way for pig producers to prevent it is to kill all animals that have been infected or potentially exposed, or to put strict biosecurity measures in place.

Officials in China have tried in vain to get the outbreak under control to protect the country’s roughly 440 million pigs, which make up more than half of all pigs on earth. So far, it says it has culled 1.2 million pigs, putting thousands of small producers out of business. McCracken and others say that is a significant underestimate.

By the end of the year, she estimates China may lose as many as 200 million pigs. That’s an astonishingly high number, considering that a single pig can produce 200 pounds of food. It’s also remarkable when you compare it to the 250 million poultry in 63 countries that were culled following the outbreak of avian flu in China in 1996.

This African swine fever outbreak, in other words, is much worse than that avian flu outbreak in terms of livestock losses. “It’s historic; there’s never been anything like this in the history of modern animal production,” said McCracken. “And it’s a frightening situation only in that there is no current control.”

Though China is the epicenter and the worst-affected country, Vietnam has also been forced to cull 2 million of its 30 million pigs, according to Reuters. And tourists have brought the disease into several countries in Europe, including Poland and Romania, where it’s spreading among wild boar.

“This is the biggest animal disease outbreak we’ve ever had on the planet,” Dirk Pfeiffer, a veterinary epidemiologist at City University of Hong Kong and expert on African swine fever, told the Guardian. “It makes the foot and mouth disease and BSE [mad cow disease] outbreaks pale in comparison to the damage that is being done.”

African swine fever can’t be transmitted from pigs to humans and is not a food safety issue. But its recent spread in Asia is becoming a major economic problem for the region, where thousands of farmers raise pigs in their backyard and rely on them for their livelihood. “It’s a pretty fragile industry with a lot of potential risk,” McCracken said.

The United Nations Food and Agriculture Organization has said the disease could continue to spread across Southeast Asia. Thailand is now on “red alert,” the Guardian reported.

Before the current outbreak, veterinarians had been warning that the virus was a significant threat to the global pig industry. “Vaccine development against ASF has been hampered by large gaps in knowledge concerning ASFV infection and immunity,” according to a March 2018 article in The Veterinary Journal.

The attempts to control the current outbreak in Asia have failed for a number of reasons, including “rampant smuggling of pork products,” according to researchers writing in February in the journal Antiviral Research:

New outbreaks are still ongoing due to complex factors, including difficult control of long borders, frequent exchanges of personnel and products with affected countries, rampant smuggling of pork products, large populations and high densities of domestic pigs and wild boars, high numbers of backyard and small pig farms with poor biosecurity, difficult control of long-distance, trans-region transportation of live pigs and pork products, and the difficulty of early detection of ASF, due to confusion of early clinical signs with other diseases.

So far, there’s no sign that African swine fever has infected pigs or wild hogs in the United States. But the US Department of Agriculture said in May that it would begin testing for the virus to keep the disease out. “The more countries that it’s in, the more risk there is that it can spread globally through travelers carrying processed meat that’s been infected,” said McCracken.

In an email to Vox, Pfeiffer added, “Any pig producing country in the world is at risk, and how high that depends on each country’s border inspection and veterinary service capability and the structure of each country’s pig industry.”

While the outbreak hasn’t significantly affected the price of pork, eventually the massive losses in China and Vietnam may impact consumers around the world.

“Prices are still at acceptable levels because China still has inventories of frozen pork,” says McCracken. “But eventually those inventories will be worked down later this year and prices will move higher. It will be global.”

McDonald’s, which sells a lot of bacon, said it’s already feeling the impact. “African swine fever hurts us a little on the pork,” McDonalds CEO Steve Easterbrook said in a recent interview with CNBC. “That limits the movements of pork and pushes it up here in the US.”

Source: https://www.vox.com/2019/6/6/18655460/china-african-swine-fever-pig-ebola

The post “Pig Ebola” is spreading uncontrollably in China and Vietnam first appeared on Garner Ted Armstrong Evangelistic Association.

What started with a few dozen dead pigs in northeastern China is sending shock waves through the global food chain.

Last August, a farm with fewer than 400 hogs on the outskirts of Shenyang was found to harbor African swine fever, the first ever occurrence of the contagious viral disease in the country with half the world’s pigs. Forty-seven head had died, triggering emergency measures including mass culling and a blockade to stop the transportation of livestock. Within days, a government notice proclaimed the outbreak “effectively controlled.”

Read More: The Deadly African Virus That’s Killing Asia’s Pigs

A worker disinfects pigs at a farm in Zhejiang province in August 2018.  Photographer: VCG via Getty Images

It was too late. By then, the disease had literally gone viral, dispersed across hundreds of miles in sickened animals, contaminated food, and in dirt and dust on truck tires and clothing. Nine months later, the contagion has spread nationwide, crossed borders to Mongolia, Vietnam and Cambodia, and bolstered meat markets globally.

While official estimates count 1 million culled hogs, slaughter data suggest 100 times more will be removed from China’s 440 million-strong swine herd in 2019, the Chinese zodiac’s “year of the pig.” The U.S. Department of Agriculture forecast in April a decline of 134 million head — equivalent to the entire annual output of American pigs — and the worst slump since the department began counting China’s pigs in the mid 1970s.

Pig Out

China’s hog output is predicted to slide 20% in 2019 to a 17-year low

“This is an unprecedented situation,” said Arlan Suderman, chief economist for INTL FCStone Inc., who has been analyzing commodity markets for almost four decades. “This will impact food prices globally.”

Like Ebola

The strain of African swine fever spreading in Asia is undeniably nasty, killing virtually every pig it infects by a hemorrhagic illness reminiscent of Ebola in humans. It’s not known to sicken people, however.

The harm to pigs is especially critical for China, with a $128 billion pork industry and the world’s third-highest per-capita consumption.

Pork Lovers

China’s 2017 per-capita pork consumption was almost triple the global average

China’s hog herd may decline as much as 30 percent, said Juan R. Luciano, chief executive officer of Archer-Daniels-Midland Co., one of the biggest agricultural commodity traders.

“China will clearly need to import substantial amounts of pork and likely other meat and poultry to satisfy demand,” Luciano told analysts on an April 26 conference call. Chinese meat purchases may also boost sales of soybean meal, a source of livestock feed, in North America, Brazil, and Europe, he said.

Wholesale pork prices in China are already 21 percent higher than a year ago, and have risen in the U.S. and EU after processors sent more of their product to China. The price of bacon in Spain jumped about 20 percent during March, while pork shoulders climbed 17 percent in Germany, according to Interporc, a Madrid-based industry group.

Needing Meat

China will boost its imports to plug a domestic pork shortage

“The potential quantum of this is huge,” said Angus Gidley-Baird, a commodities analyst with Rabobank in Sydney. “It’s the biggest thing to affect the animal-protein market this year, and will probably have a lasting effect for a number of years. It will move markets and possibly influence geopolitical situations.”

The rally has spread to other meats. Australia’s beef exports to China surged 67 percent in the first quarter. In Brazil, shares in meatpackers such as JBS SA and Minerva SA have soared amid optimism of stronger sales to China.

Contagion Effect

Increased Chinese meat imports will result in higher food costs that impact on economies across the globe. The extent of those ripple effects depends on how quickly the epidemic can be stopped. Official data show a slowdown in the number of pigs affected since late 2018, supporting the government’s assessment that the disease is “under effective control.”

Analysts from Morgan Stanley to Citigroup Inc. to the U.S. Department of Agriculture aren’t convinced that the disease isn’t still spreading.

Pork is the largest component of China’s consumer price basket, and its influence on other meat prices means that a doubling of pork prices in China would boost the country’s inflation by 5.4 percent, all other things being equal, according to Citigroup, which is forecasting a 2.6 percent inflation rate for the country in 2019.

The Chinese government will likely treat any pork-related inflation as an extraordinary event separate from general cost increases, said Liu Ligang, chief China economist at Citigroup. in Hong Kong. Still, if rising pork prices elevate inflation beyond a ceiling rate of 3 percent, it could constrain the People’s Bank of China from taking aggressive measures to boost the economy.

Supply Shock

“The more field studies people tend to do, the more fear they tend to have,” Liu said. “This is a supply shock, not a demand shock, and as a result this could be transitory. But this could be a prolonged supply shock given the severity of the disease.”

The epidemic could have political repercussions as well. Xi Jinping may want to finalize trade negotiations with U.S. President Donald Trump to both ease the importation of much-needed pork, poultry and beef supplies, and to enable Chinese lawmakers to focus solely on quelling outbreaks, said INTL FCStone’s Suderman.

The contagion is also highlighting the urgent need for government investment in outbreak preparedness, said Amanda Glassman, chief operating officer at the Center for Global Development.

African swine fever in China shows that “animal and human disease surveillance systems are not working as well as they should,” she said. “This should concern everyone given that the potential economic impact of large-scale outbreaks is huge.”

— With assistance by Jason Gale, Irene Garcia Perez, and Hannah Dormido

Source: https://www.bloomberg.com/news/articles/2019-05-02/pig-ebola-virus-sends-shock-waves-through-global-food-chain

The post Pig ‘Ebola’ Virus Sends Shock Waves Through Global Food Chain first appeared on Garner Ted Armstrong Evangelistic Association.

zeljkosantrac | iStock | Getty Images

With African swine fever ravaging China’s hog industry, U.S. experts are expecting pork prices to go higher and likely stay elevated well into 2020.

“If I really like bacon, I’d be kind of stocking up,” said Steve Meyer, an industry economist with Kerns & Associates in Iowa. “I’ve got about 12 pounds already in the freezer.”

At least 129 cases of African swine fever have been reported in China since the first case was confirmed last August. The incurable disease also has spread to other parts of Asia, including Vietnam.

“African swine fever in China could result in an extended period of elevated pork pricing in the U.S.,” wrote J.P. Morgan analyst Thomas Palmer in a research note last week. He said there’s still no containment of the swine virus, and the replacement of the herd in China is likely to take “a minimum of 20 months,” meaning “elevated demand for non-domestic pork will continue into 2020, at the least.”

A jump in wholesale pork and bacon prices could potentially impact profit margins for restaurants serving up BLTs, bacon cheeseburgers and pork belly sandwiches. As for American consumers, experts say supermarkets are likely to absorb some of the price increases in the short run for competitive reasons.

“When you have a bacon cheeseburger, if bacon price doubles, you might have another 30 to 40 cents on that sandwich,” said David Maloni, executive vice president of analytics for ArrowStream, a Chicago commodity researcher for the restaurant industry.

And restaurants are closely watching the price of pork bellies these days because bellies are used to make one of America’s favorite foods: bacon.

Maloni forecasts “belly prices may rise more than 40% from yesterday’s close before they seasonally peak later this year.” Also, he said there’s a chance they “could move even higher in 2020.”

Restaurant chains, particularly those in the fast-food sector, typically use hedging or forward contracting to mitigate any price spikes in meats, including bacon. Pork belly futures no longer trade on the Chicago market, but the lean hog futures are used by some companies to hedge risk on bacon.

According to Maloni, there’s been a gradual increase in demand for bacon to the point where the “running total of pork-belly disappearance” is tracking up 3.9% on a year-over-year basis, or the best growth since the summer of 2017.

He said domestic trends, when combined with the possibility of strong pork carcass exports to China, appear to show that pork belly supplies could be much tighter later this year and into 2020. He also believes the situation in China will have consequences for the poultry market, too.

On Wednesday, Chicago-traded June lean hogs rallied 3.4%. The most-active lean hogs contract has risen more than 60% since the start of March, although it still is below recent highs.

“We’re firmer today because the market got deeply oversold, technically,” said Don Roose, president of Iowa broker U.S. Commodities. “There’s also anticipation that Thursday’s weekly export sales report will show pork sales to China.”

The U.S.-China trading war has included retaliatory tariffs Beijing slapped on American pork, resulting in the product having a total import tax exceeding 60%. Other world pork suppliers have pushed to increase trade with Beijing, but there are signs China is starting to resume major U.S. pork purchases.

Visual China Group | Getty Images

Pigs raised by farmers are seen at Linquan county on December 5, 2018 in Fuyang, Anhui Province of China. A total of 81 cases of the African swine fever had been reported in 21 provincial regions in China by Monday, according to Xinhua.

“We’ve got some Chinese buyers that have been talking to U.S. packers,” said Meyer. “In the short run, the Chinese are going to take some more and drive our domestic prices higher. But in the long run, we will increase output to the degree we can do so responsibly, and we’ll supply what the world wants to buy.”

Beijing hasn’t divulged the exact number of hogs lost to swine fever, but Rabobank estimates up to 200 million animals could be affectedand production could decline by 30%. That compares with about 75 million hogs and pigs in the total U.S. inventory.

“In China, what we’ve seen over the winter was producers that had pigs near market weight hurry those to market before they got sick,” said Meyer. “There’s a ‘let’s beat this thing’ mentality in the early days of this. That will maintain pork supplies in the short run.”

China is believed to have a large reserve of pork supplies and significant supplies in cold storage. As pork supplies shrink, China may need to rely more on imported proteins, including poultry and beef.

Then again, while pork is a staple meat in the world’s most populous nation, the swine fever appears to have softened demand for the protein by Chinese consumers. But experts say the swine fever doesn’t pose a risk to humans.

“You’re going to see some negative impacts on demand,” said Meyer. “We think you’re seeing some of that over there. But eventually they will realize that no people are getting sick and nobody’s dying of this.”

— Graphics by CNBC’s John Schoen

Source: https://www.cnbc.com/2019/05/01/pork-could-jump-this-year-stay-elevated-into-2020-due-to-china-crisis.html

The post Pork prices could jump this year, stay elevated into 2020 due to China’s pig crisis first appeared on Garner Ted Armstrong Evangelistic Association.