Prices for exported American pork climb as China battles African swine fever

EVANSVILLE, Ind., April 23 (UPI) -- Prices for American pork are climbing as China battles a widespread epidemic of African swine fever that is decimating that nation's hog population and threatening the entire Pacific Rim.

"It's been several years since we've seen prices this high," said Bob Utterback, an agricultural economist and the president of Utterback Marketing Services.

Before March, wholesale pork prices hovered between 50 cents and 60 cents per pound, according to the U.S. Department of Agriculture. Since then, prices have shot up as China pushed to import more pork from the United States. U.S. prices have now reached about 90 cents per pound.

 

As of this month, U.S. pork sales to China totaled 166,000 metric tons, compared with 20,000 metric tons last year at this time, said Minghao Li, a postdoctoral research associate at the Center for Agricultural and Rural Development at Iowa State University.

"The sale of U.S. pork to China this year is the highest we've seen in history," Li said.

Economists predict the price for pork from the United States and other pork producing countries will continue to climb in coming years as China's herd collapses.

It will take some time for American consumers to notice the price difference at the grocery store. As of Friday, there was no change in supermarket pork prices compared with this time last year, according to the U.S. Department of Agriculture.

But that will likely change.

"They'll have to," Utterback said. "There will be a time period where grocery stores will absorb that price increase. But, eventually, prices will rise. I don't think it will be a drastic, big surge. But it will happen."

Since the African swine fever outbreak began in August, China has reported culling some 1 million hogs. But experts say the losses are probably far greater. The nation is predicted to lose between 25 and 35 percent of its herd from the disease and culling this year alone, according to the food and agribusiness bank and research firm Rabobank.

China has the world's largest hog population -- by far. Thirty percent equates to some 200 million hogs -- more animals than the entire U.S. and Canadian herds combined.

With losses quickly mounting, the price of pork in China already is up 40 percent. And Rabobank predicts it will increase 70 percent by the end of this year.

The massive spike in U.S. purchases notwithstanding, China currently is importing most of its pork from Europe, Canada and Brazil -- not the U.S. The reason is China maintains high trade war tariffs on U.S. pork. American industry groups warn that unless the trade war tariffs are removed, U.S. farmers face an uphill battle accessing the massive new market.

"China will be looking for reliable sources of pork," said Joe Monroe, a spokesman for the National Pork Producers Council. "It creates opportunity for the U.S., but unfortunately, we are currently facing trade retaliations by China in the form of 65 percent punitive tariffs on U.S. pork."

But China is not the only country that will need to import protein to offset swine fever losses in the coming year. The disease already has spread beyond China into neighboring Vietnam, Mongolia and Cambodia, and experts worry it will continue border-hopping until it affects all of Southeast Asia -- and beyond.

Nearly every animal that contracts African swine fever -- which is not harmful to humans -- will perish from the disease. There is no treatment or vaccine, leaving culling and biosecurity measures as the only methods for combating the virus' spread.

"Many of these countries will be less able than China to control the spread of this infectious disease," said Dirk Pfeiffer, the chair professor of One Health at City University of Hong Kong's Jockey Club College of Veterinary Medicine and Life Sciences.

With pork-producing countries stretched thin to meet China's demand, those markets will be left open for American producers, said Joseph Kerns, an agriculture risk management consultant with Iowa-based Kerns and Associates Partners for Production Agriculture.

Estimates differ on how long it will take the region to recover for the outbreak, but most experts guess it will be at least three years -- probably more. During that time, demand for pork and other protein from countries not infected with the virus will remain high, as will prices.

However, American producers are not rushing to increase production.

"The U.S. is not immune to this disease," Kerns said. "We have the benefit of having an ocean on either side of us, and that helps. But we're not immune."

An outbreak of African swine fever in the U.S. would immediately halt all exports until the disease is contained. Agricultural economists across the country agree this would be disastrous for the industry, which exports roughly 25 percent of its pork.

"With that cloud hanging over our head, we don't have the giddy excitement to expand production," Kerns said.