Beef Buzz News
China's African Swine Fever Problem Largely Seen as a Positive for US Ag- But What's the DownsideFri, 31 May 2019 10:20:15 CDT
A lot of attention is being paid outside of China to the ongoing African Swine Fever situation. It has been a major topic of discussion among ag industry stakeholders, not just in the pork segments but beef and poultry as well. All those concerned have speculated on the impact this disease outbreak and the resulting destruction of the Chinese hog herd will have as its effects ripple out across the global ag trade. As the world’s largest pork producer, historically responsible for 50 percent of the world’s total pork production, Oklahoma State University Extension Livestock Market Economist Dr. Derrell Peel says the impact will certainly be felt and potentially offer some profitable opportunities for US livestock producers.
“They’re going to be in the market for protein. They’ll be looking for pork. If not from us, from other places,” Peel said. “They’ll probably still buy some pork from us, in fact they are buying some despite the tariffs. But, whether it’s here or there, it’s still going to create that demand effect and it won’t just be pork protein that the Chinese will be looking for. They will also be looking at beef and poultry as well. How much of that might be directly from the US in terms of beef is hard to say at this point but certainly in total - the entire protein complex stands to see some increased demand as a result of this vacuum that’s happening because of the loss in pork production in China.”
Erin Borror of the US Meat Export Federation concurs with Peel’s assessment, asserting that there will be fundamental changes that occur in the consumption patterns of China’s consumers.
“We at USMEF have thought that Chinese consumption would continue to diversify as incomes grew. I think this whole ASF situation could really exacerbate that,” she said. “Chinese consumption of pork will rebound after this, but this is a long-term game and the ability to rebound after ASF could likely take a while. And so, you’re looking at the possibility of a transformation of Chinese consumption.”
However, CoBank’s Lead Animal Protein Economist Will Sawyer says that this situation will also facilitate a negative impact on the US ag economy. In a recent report, Sawyer explained how China’s reduced animal production would lower the demand for US feed grain. Although a number of things will factor into the actual impact this has on the US grain industry, Sawyer says the US is still well positioned as a low cost protein exporter, particularly now as China and other Asian countries like Vietnam ramp up their imports. But, he says that if the Chinese trade dispute continues to go unresolved, the upside trade potential for the US meat sectors may not be fully realized.
Listen to Radio Oklahoma Ag Network Farm Director Ron Hays visit with Peel, Borror and Sawyer as they discuss the potential impact that China’s ASF outbreak may have on the US ag industry, on today’s Beef Buzz.
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