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CoBank outlines Swine Fever implications
(Posted on 21/06/19)
A May 2019 report from CoBank forecasts feed demand from China and Southeast Asia will drop significantly due to African Swine Fever, trimming U.S. feed and grain exports.
The report, “African Swine Fever Implications for U.S. Ag,” notes that it is yet unknown how much and for how long China’s pork industry will contract, but “it’s certain there will be significant implications for the U.S. animal protein and feed sectors.”
“ASF demand destruction will be especially painful for elevators, crushers, and feed mills that are focused on Chinese markets,” wrote report authors Will Sawyer, CoBank lead economist for animal protein, and Will Secor, CoBank economist for grain and farm supply. “Exports may not decline as severely for those companies that can pivot to the European Union and other markets outside China.”
Citing April figures from China’s Ministry of Agriculture, the report says China’s hog breeding herd is down 22 percent and the overall hog herd is down 21 percent compared to last year. Projections call for China to lose roughly one-third of its hog production over the next 12 to 18 months. If China’s hog herd declines as projected, the report predicts soybean meal consumption to decline by roughly 9 million metric tons (MMT) and corn consumption to drop by about 28 MMT.
Mitigating some of the negative impacts on feed demand are projections that Chinese consumers will be buying more imported pork and more poultry, beef and fish, CoBank said. In addition, demand for U.S. animal protein will grow, resulting in an increase in domestic feed demand. Elevators, crush facilities and feed mills positioned to fill domestic demand likely will benefit from this increase, the authors noted.
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