WITH the unprecedented outbreak of a deadly pig disease sweeping through Asia and parts of Europe, North American hog producers like David Herring are taking every precaution to keep the scourge out of their borders.
Herring won’t allow international travelers to enter his farms in North Carolina, Indiana and Illinois for at least five days after they arrive in the United States. And then, like all farm visitors, they have to shower before walking into a barn. The goal is to keep out African swine fever, the contagious viral disease that’s forced China’s farmers to cull more than 1 million animals since August.
For Herring and other American farmers, it’s a precarious balancing act. The pig pandemic means big demand for North American exports as hog herds are decimated in China, the world’s largest pork producer and consumer. But if even one pig is infected in the US, foreign buyers likely would quickly ban pork shipments, potentially causing prices to plunge.
“When they announced the first case, it was a whole new world for pig farming,” said Herring, who produces about 700,000 hogs annually and is also the president of the National Pork Producers Council. Now, “it’s in half the world’s pigs. It will create a lot of opportunity for US pork to sell more product, but it does put all of our pork producers at risk.”
Humans can’t be infected, but pig populations can be wiped out from African swine fever, known as ASF. The disease has been around since the early 1900s, but there’s never been a reported US case. So far, American pork producers have seen a boon.
Chicago hog futures for June delivery have surged more than 30 percent since August 1. Shares of Brazil’s meat giant JBS SA more than doubled in that time. Meanwhile, Matt Riddleberger, vice president of supply chain for US sandwich restaurant Firehouse Subs, said he’s already locked in ham needs for the year and is considering hedging 2020 prices earlier than normal as increased shipments to China could make domestic supplies more expensive. Earlier this month, China made its biggest-ever purchase of American pork. “We could be looking at some pretty hefty increases next year if we don’t get our arms around this,” Riddleberger said.
Risk
FORTUNES could quickly reverse if the disease comes to the Americas. The risk of spread into the US has now more than doubled, most likely by passengers bringing pork in luggage to airports in California, New York or Texas, according to the Swine Health Information Center.
The first year of a US outbreak would mean revenue losses of $8 billion for pork producers, $4 billion for the corn industry and $1.5 billion for soybeans, according to a study led by Dermot Hayes, an Iowa State University economics professor. Corn and soybean meal are principal feeds for hogs.
“If we got ASF, within a week our export markets will close,” said farmer Herring. That would leave the US market flooded with 25 percent more supply than usual, he said.
Last month, federal agents seized 1 million pounds (454 metric tons) of pork smuggled from China to a port in New Jersey—it was the largest-ever US seizure of agricultural products.
An illegal import of pork products “is probably our highest risk,” said Patrick Webb, director of swine health programs for the US National Pork Board. Feed grain and supplements also pose a threat.
The National Pork Producers Council this month canceled its annual World Pork Expo that was scheduled for June in Iowa, the biggest US hog producer.
Image credits: Daniel Acker/Bloomberg