“We are far from the end of this,” says Arlan Suderman of INTL FC Stone.
Those are the words many in the livestock industry don't want to hear when it comes to hogs and African swine fever (ASF), but could the concern cause prices to rise here at home?
Suderman expects higher pork prices to eventually make its way to the United States due to the ripple effect of ASF.
“China just made the largest purchase by any buyer of U.S. pork on record [earlier this month],” said Suderman. “We can expect them to come back and that’s going to raise retail prices in the United States and support beef and poultry prices as well.”
The expected lift in prices is because of the ASF outbreak and its large number of reported cases.
“Our [sources in China] indicate to us that we’re probably looking at hog numbers down 60% to 70%,” says Suderman.
He says producers need at least 6 months to rid the farms from the disease. Even then, producers aren’t done with the disease yet.
“With those kinds of margins, [China’s producers] are rushing back within a month after having an 80% to 90% re-hit rate,” says Suderman. “So, there are a lot of problems.”
Suderman says Chinese producers are feeding hogs which don’t have the disease more to increase weights.
As far as the current markets in the United States, most of the lean hog contracts traded in the green during Monday’s trading session on the CME Board of Trade.