… US-based industry analyst Len Steiner… “It’s a different approach to pork production than what has traditionally been seen in China. They are making rapid progress in recovery. The Chinese are obviously learning how to live with, and effectively manage for the disease”…
China making surprisingly rapid pork recovery after ASF, webinar told
Jon Condon, BEEF Central (Australia)
October 14, 2020
CHINA is making a surprisingly rapid recovery in pork production after the devastating effects of African Swine Fever last year, an international meat trade webinar was told this morning.
The annual Meat Import Council of America conference held every October normally attracts a large gathering of international exporters, importers and traders, including a contingent from Australia, but was held online this year due to COVID.
US-based industry analyst Len Steiner delivers a presentation to the conference each year outlining world meat supply and demand trends and a forecast on cattle and meat prices for the year ahead.
Among a broad range of topics he covered this year, he suggested Australian lean grinding beef exports to the US next year are likely to retain a price premium over both domestic US trim, and competing imported product from South America (more details below).
As part of an examination of the China market in global meat supply and demand, Mr Steiner said a year ago (after the onset of African Swine Fever) China was outbidding other import competitors for available beef supplies.
“But they don’t seem to be buying as much at this point in time, from Australia or New Zealand – despite leading the world in the recovery from COVID and the recession it caused,” he said.
“Part of that may be political – Australia has been vocal about some of the developments in Hong Kong, for example – and the Chinese have let Australia know that they do not appreciate those comments.”
New Zealand had also shifted a little. For a long time the US had been NZ’s biggest and most consistent customer. Last year that was not the case, as China exports grew, but this year, the US would again be NZ’s largest market, he said.
Rapid Swine Fever recovery
While China’s pig herd was decimated a year ago by African Swine Fever, recovery had been surprisingly swift, and this would potentially impact world meat trade in coming years.
Prior to 2018, China had somewhere around 55 percent of all the hogs on earth, Mr Steiner said.
While precise estimates were difficult to source, statistics suggested China had about 418 million pigs in July 2018, before falling by 37 percent to 264 million by September last year due to the direct and indirect impacts of Swine Fever.
By January this year, the Chinese pork herd had increased to around 283 million head, and Steiner Consulting’s current estimate is that the national herd has now recovered dramatically, to around 375 million head. That suggests Chinese pig numbers are now back to within 10pc of pre-ASF levels.
“They have made a lot of progress lately,” Mr Steiner told this morning’s webinar.
One of the reasons for this was the collapse in Chinese ‘smallfarmer’ pork production, replaced rapidly by large commercial-scale pork production enterprises which could practise bio-security to keep the disease at bay.
“The typical sow shed in the US is a low, flat building. In China, they are now building three-storey sow sheds. They look like a Holiday Inn,” he said.
“It’s a different approach to pork production than what has traditionally been seen in China. They are making rapid progress in recovery. The Chinese are obviously learning how to live with, and effectively manage for the disease.”
At the same time, another reason for the rapid headway in pork production was that pork prices in China had been so high. Retail pork prices are currently around 112pc of what they were a year ago; hog prices 136pc; and baby pigs 174pc higher – almost three times the price of a year ago, Mr Steiner said.
Despite recovery in the pig herd, beef imports to China continued to grow, with roughly 75pc of Argentina’s beef exports now destined for China; about 55pc of Uruguay’s; and 60pc of Brazil’s exports (when Hong Kong is included). A year ago, more than 50pc of NZ’s beef exports went to China, now back to 45pc, while Australian exports represented about 20pc of all exports.
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