Swine disease further erodes soybean demand04/25/2019 | Soybean Exports, Transportation, Livestock, Ag Awareness, Economics
By Bethany Baratta, ISA senior writer
African swine fever (ASF) is decimating China’s hog herd, further eroding U.S. soybean prices and raising questions about the safety of amino acids and other ingredients used in pork production being imported from China.
Reported cases of African swine fever in China alone have forced farmers to cull more than 1 million pigs in an effort to control the spread of the disease. Industry experts say, however, that the number of cases is largely underreported.
ASF has spread to all 31 of China’s mainland provinces, municipalities and autonomous regions since August 2018, according to Farm Journal’s Pork. It’s also been spreading throughout certain regions in Asia, Africa and Europe. There is currently no vaccine or treatment available for the disease.
By the end of 2019, China’s total swine inventory will be down 13 percent to 374 million head, according to the USDA Foreign Agricultural Service’s Global Agricultural Information Network (GAIN) report on April 19.
While ASF has driven up global pork prices, it’s bad news for soybean exporters, according to Minghao Li, a post-doctorate research associate at the Center for Agricultural and Rural Development (CARD) at Iowa State University.
“According to our estimation, a 14 percent decrease in pork production would lead to a 10 percent decrease in soybean import demand,” Li said. He was part of a team of researchers who put together an ASF impact study.
Soybean prices have dipped an additional 3 percent in the past couple of months, and there could be a further decline in prices in the near future, said Chad Hart, crops market specialist at Iowa State University.
Though it’s difficult to separate the drop in demand for soybeans as it relates to the trade war versus ASF, it is affecting soybean shipments, Hart said.
“The Chinese market is about 500 million to 600 million bushels behind in soybean demand over the past 4 to 5 months compared to the previous year,” Hart said.
That further erodes prices for Iowa soybean farmers like Iowa Soybean Association (ISA) President Lindsay Greiner of Keota.
“You take all the trade disputes going on and add in African swine fever, it definitely impacts our prices,” Greiner said. “We lost a lot of market because there aren’t as many hogs to feed.”
It’s added insult to injury, said ISA CEO Kirk Leeds.
“The last thing U.S. soybean farmers needed was another reason to put doubt in the marketplace about demand,” Leeds said.
Pig farmers on the defense
As a pig farmer, Greiner said he’s taking extra precautions to keep ASF out of his herd. He’s working with his integrator, Eichelberger Farms, to monitor feed ingredients and limit traffic on and off the farm. He’s also keeping in close contact with his veterinarian to monitor herd health.
That’s always a good practice, but even more so with the threat of a foreign animal disease threat, said Chris Rademacher, associate director of the Iowa Pork Industry Center and swine extension veterinarian at Iowa State University.
“It’s really important that swine producers get educated about this disease. They should be having conversations with their feed suppliers to talk about feed sources, the processing steps that are in place and the biosecurity that happens at feed manufacturing plants,” Rademacher said.
China may be one of the few suppliers of certain amino acids or other ingredients used in pig production, which creates a dilemma for producers. Rademacher said one option is to put in a voluntary quarantine to reduce the survivability of ASF in potentially contaminated ingredients coming from China from infecting pigs here in the United States.
“In some cases, holding ingredients for a time period allows for the pathogen survivability to be reduced over time, depending on the ingredient,” he said.
What to watch for
ASF is a viral disease which causes high death loss in domestic and wild pigs, according to Liz Wagstrom, chief veterinarian for the National Pork Producers Council. ASF spreads through close contact with infected animals or their excretions, or through feeding uncooked contaminated meat to susceptible pigs.
In Africa, it is also spread by warthogs and other native pigs that do not show clinical signs of the disease, as well as by soft-bodied ticks. ASF is very hardy in the environment. ASF virus does not infect other animals or humans, and there are no food safety implications. Find more information about African swine fever at the National Pork Producer’s Council website.
ISA takes precautions
Business and trade relationships with China are vitally important to the Iowa Soybean Association, said ISA’s Leeds. But the format of trips to the country looks a little different these days in light of ASF.
A recent ISA trade mission to the country shifted ISA members from visiting Chinese farms to instead meeting in corporate office buildings or other off-farm locations.
Greiner, who took part in the trip in March, said he put other precautions into place to protect his herd.
“The last time I went I wore shoes over there that I’ll never wear again. I took the clothes that I wore over there directly to the dry cleaner when I got home. I washed my clothes and dried them twice, as my veterinarian recommended,” he said.
He also stayed away from his hogs for an additional 10 days.
“We have to take every precaution we can because it’s devastating to the Chinese producers,” Greiner said.
The travel itinerary for an ISA trip to China and Japan this summer has been revised to take extra precaution.
“Even though part of the trip had been focused on soybean production in the northeast part of China, we have cancelled all farm visits. We want to make sure we don’t inadvertently cause the further spread of this disease,” Leeds said.
ISA is also adhering to the suggested travel protocols from the National Pork Producers Council, which cancelled the World Pork Expo this year due to the risk of ASF.
“We’re following suggested travel guidelines, and not touring any farms there, not even grain farms or aquaculture farms. Instead we’re focusing on meeting with industry folks at corporate headquarters and being overly cautious,” Leeds said.
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