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Special Commodity Statement
African Swine Fever
The food industry is bracing for higher protein prices as a result of the outbreak and spread of African Swine Fever (ASF). ASF now threatens the Pork industry across Asia and beyond. Over the past few months, AFS has spread rampantly throughout China. China’s agricultural industry is far less regulated and sophisticated compared to the United States, which puts them at a disadvantage in controlling the spread of the disease. What complicates matters is 90% of China’s pigs are raised by families with small herds. These family farms have zero biosecurity and are at the highest risk for their herds to be lost.
ASF can be spread by vehicles, clothing, humans (not in a way that causes illness in humans) and feeding techniques. The Chinese have a hard road ahead in trying to salvage their pork industry. It could take 5 to 7 years for the Chinese to rebuild their pork production. Pre-AFS, China grew more than 50% of the pigs world-wide. Current projections have China losing 200 million pigs out of a total population of 440 million. China’s loss will be equal to about 6% of the world’s total meat production for the year. Outside of China, AFS has spread to Cambodia, Russia, Vietnam, Mongolia, North Korea and South Africa.
ASF is significant to the U.S. food industry due to the lost protein, as a result of ASF, this loss will have to be filled by other proteins and prices of those products will be affected in the coming weeks and months. The markets have been fairly tame so far, but we do expect prices to move up as we get later into the year and begin to affect protein prices overall.
This weeks commodity report