How Will Pork Industry Survive Trying Times?

 

Jennifer Shike, FarmJournal's Pork

March 12, 2019

 

The future belongs to those who can adapt to change and gain the best market access, said Brett Stuart of Global AgriTrends at the 2019 American Association of Swine Veterinarians annual meeting in Orlando on Monday. With global population rising by 78 million per year, the U.S. pork industry has a great opportunity to help meet the protein needs of a growing world population.

 

More food is needed.

 

In the next 100 years, more food will be needed than was consumed in the last 7,000 years. More than 815 million people are considered food insecure now. Every day, more than 6,000 children die of malnourishment. This is unacceptable, Stuart said.

 

“Food shortage is not an issue of productive capacity, however. It’s more of an issue of AK-47s and greedy dictators,” Stuart said. “I have done the math. World resources will be adequate to feed 9 billion if technology and productivity are allowed to spread globally.”

 

Currently, U.S. pork is not the largest global producer or exporter. But with $6.2 billion in exports last year, Stuart said the industry is globally-significant.

 

Week-in, week-out, U.S. pork is often the most affordable pork on the planet, based on comparable hog prices. While China holds more than half of the world’s hogs, and is the world’s “low-cost” manufacturer of many consumer products, they are nearly always higher cost hog producers than the U.S.

 

“Think of it this way: U.S. agriculture is generally the ‘China’ of the agriculture world,” he said. “We are typically the ‘low-cost’ producer of corn, wheat, pork, poultry, beef, rice, and soybeans; but particularly pork.”

 

This significant cost advantage suggests that U.S. pork should dominate markets everywhere, but Stuart said it’s more complex than that. An actual hindrance to being the low-cost supplier is just that: the fact that U.S. pork can undercut domestic prices in foreign lands.

 

“This works fine for consumers, but what about foreign producers? Farmers are strategically important in any country and thus politically protected,” he said. “Affordable U.S. pork is a threat to countries seeking to maintain self-sufficiency goals. And this ‘trade policy’ arena is where it gets complicated.”

 

So, what about China?

 

As the world’s worst hog disease ravages the world’s largest hog herd, pork shortages and a pull on global pork supplies are expected.

 

“This is a big deal. It’s a global pork ‘black swan’ event,” Stuart said. “African swine fever is like molten lava. It spreads slowly, but everything it hits, dies.”

 

U.S. opportunities in China require patience and continued pressure toward global standards, as well as continued market development, he added.

 

“My take on African swine fever in China is that the spread is very vast and deep,” Stuart said. “Greater than 15% of China’s sow herd has been liquidated already. Conservatively, I believe production will be down over 30% after liquidation stops.”

 

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