Rabobank Expects Up to 50% Loss in World’s Largest Pig Herd

( National Pork Board and the Pork Checkoff )

All eyes are on the protein market and what’s happening in China with African swine fever (ASF). New cases of the deadly virus are continuing to spread through China and eastern Europe this week, a sign that this disease is still raging. 

A new report by Rabobank indicates that expected losses in the world’s largest hog herd may be up to 50% by the end of the year. 

“Half of the world’s pigs are in China and half of those are now eliminated, we think. Roughly a quarter of the world’s pigs have now perished,” Rabobank senior protein analyst Christine McCracken told Clinton Griffiths Tuesday on AgriTalk. “That is a huge loss. It will leave the world quite obviously short of protein. It’s something that should be a big factor as we move into 2020.”

McCracken said she has never seen anything like this in the protein industry and doesn’t expect to ever see anything like this again. 

“It hasn’t stopped. It’s been a year this week,” she said. “I think a lot of people thought of it as a one and done. It hit and then we've moved on. But in fact, we continue to see huge outbreaks and now in more pig-dense regions, which is a concern because they have not been able to keep it out, even in areas with tighter biosecurity.”

Why isn’t China buying pork?
It’s hard for U.S. producers to understand why China isn’t buying more pork. Although producers should dispose of pork properly during ASF outbreaks, McCracken said a lot of that meat is going into freezers in China. 

“All that pork needs to be consumed. The freezers are full, consumption of pork is down, and there are some concerns on their part with the safety of that pork. We just have a lot of pork in China and until all of that is consumed, we're not going to be shipping as much as you might expect,” she said.

She predicts more pork will be shipped in front of Chinese New Year and the first part of 2020 but admits those are just expectations. 

“I’ve heard the National Pork Producers Council say that this opportunity is one of the greatest opportunities for pork producers that they’ve ever seen,” Griffiths said.
McCracken agreed there’s definitely a hole that needs filled when it comes to the global protein supply. But she says it’s not just an opportunity for pork. It’s an opportunity for everyone – pork, chicken, aqua and plant-based protein to supply the need for protein. 

Will China repopulate?
Because over half of China’s breeding herd is gone and there is no cure or vaccine for ASF, it will be really hard to repopulate, McCracken said.

On pig farms where they've gone in and tried to put pigs back in those barns, they've actually broken with ASF again, she added. Without any control for ASF, there’s a lot of risk in rebuilding. 

“So, as much money as there might be, that would probably be a lot of good money wasted today if they were to go back in and rebuild,” she said. “I think it's going to be a few years until they can rebuild, but the issue is that they continue to lose pigs. Those numbers are going to get small, and the smaller they get, there's fewer pigs that they can lose at that point.”

Is more weight the answer?
Moving into fall, McCracken said there will be a lot of U.S. pork that needs moved into export markets. Trade barriers aren’t helping the issue.

“The labor situation at the plants is still a constraint. We're not going to be able to expand our herd very rapidly, but we might be able to put a little more weight on these pigs,” she said. “But in terms of wholesale expansion, we're really limited at this point by labor. There's not a lot that we or anyone else in the world can do to rapidly expand to meet that demand.”

Listen to the full audio report to hear more discussion about ASF with Christine McCracken and Clinton Griffiths.

Want to read more on ASF? Visit porkbusiness.com/ASF.

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