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China’s Ban On U.S. Pork Is ‘Game Changer’ For Market
A Recent License Vaccine May Aid In The Control PEDv In Swine
7th In A Series
JOHN LAROSE
BETTY VALLE GEGG-NAEGER
MidAmerica Farmer Grower
PERRYVILLE, MO.
United States pork producers are beginning to feel the impact of China’s ban on U.S. pork products which it imposed on May 7. China, the world’s largest pork consumer, banned hog imports from the United States to prevent the deadly Porcine Epidemic Diarrhea virus (PEDv) from spreading to its pig farms.
No new import permits will be issued until the two countries reach an agreement on a protocol for testing animals for PEDv. That creates concern for U.S. swine exporters because it adds to the price burden the United States already faces.
The United States exported $20 million worth of U.S. breeding hogs in 2013 to China, one of its largest export markets. Japan and Mexico are also among the top purchasers of U.S. pork.
U.S. hog supplies have tightened as the PEDv has spread to farms in 30 states, killing millions of piglets since it was first identified in April 2013. One producer reports losing 30,000 piglets in the six-week outbreak last year. While the China ban helps ease the already tight supply of pork here, it is boosting prices in the $9 billion U.S. hog-futures market.
U.S. pork exports will fall by 190,000 tons to 2.2 million tons this year, according to an April forecast by the USDA. U.S. exports were up 11 percent through April, fueled in part by foreign buyers seeking to secure inventories amid fears that supplies will continue to tighten.
A USDA report issued in February listed the United States as China’s largest live swine supplier and also the largest pork exporter. However the United States’ share of China’s imports fell last year to 21 percent from 54 percent in 2011.
China faced frequent pork shortages and rising pork prices in the 1990s; to ease the shortage, the country imported breeding pigs in large quantities in 2007. Every year since, the number of foreign pig breeds has soared there.
Last year China imported 173,000 breeding pigs from the world market. That number is up 13.8 percent from 2012, hitting a new record.
According to a report by the college of animal sciences and technology at Wuhan-based Huazhong Agricultural University in China, that country maintains a cultivation scale of 50 million sows per year to ensure pork supply and demand are in balance. They mainly purchases five types of breeding pigs every year, including the Large White, Duroc and Berkshire from the United States, Canada, Denmark, France and the UK.
Joel Haggard, senior vice president of the U.S. Meat Export Federation for the
Asia Pacific region. He said China took in almost 300,000 tons of pork in 2013.
China’s pork production amounted to 54.93 million tons in 2013, a 2.8 percent rise from a year earlier, data from the National Bureau of Statistics shows. That makes it the world’s biggest pork producer and consumer. To tackle food inflation, the nation’s pork imports totaled 584,000 metric tons last year, a notable 12 percent increase over 2012. Yu Chuanzhou, a professor at Huazhond Agricultural University, said Chinese native pigs are gradually disappearing. Native species account for around 10 percent of the 50 million sows in China.
The Chinese government has placed 34 species under state protection, to avoid extinction and develop native species. These animals cannot be slaughtered.
China’s intense domestic pork trading market has driven at least one Chinese company to secure pork supplies in the United States. Chinese pork producer Shuanghui International Holdings Ltd, a subsidiary of Luohe-based Shuanghui Group, closed on a $4.7 billion purchase of U.S. pork giant, Smithfield Foods Inc. The combined company now is renamed WH Group Ltd. One reason for the purchase was for China to gain greater access to U.S. pork supplies.
China’s demand for meat is soaring and exports to the country are growing rapidly, according to the U.S. Meat Export Federation (USMEF)
Joe Haggard, USMEF senior vice president, Asia Pacific, said China continued to make waves in the international meat market. He said China took in almost 300,000 tons of pork in 2013; that amounts to an increase of 375 percent over the previous year.
The situation is smoother on the pork side than the beef. China’s pork production last year was up 2.8 percent. The country harvested more than 700 million head of animals and produced 55 million tons of pork, while their prices have been very low.
“The United States has done very well for the first quarter, given our prices and despite very strong European competition and China’s increasing production,” Haggard said. “China’s hog prices have surged upwards in recent weeks so we remain optimistic about our exports to China, although we’re predicting growth will be flat, because of the competition from Europe.”
While swine-disease outbreaks in the United States and Europe are starting to reshape global trade, enabling Brazil and other big pork producers to grab market share, solutions may be within reach. The USDA’s Animal and Plant Health Inspection Service (APHIS) issued a conditional license on June 16 to Harrisvaccines, Inc. of Ames, Iowa for a vaccine that may aid in the control of PEDv in swine. This is the first licensed vaccine for PEDv, and it will be used to vaccinate sows so they can build antibodies and transmit that through their milk to newborn piglets to protect them from PEDv.
Preliminary studies have been promising, showing sufficient data that proves effectiveness. Harrisvaccines will continue working toward completing the requirements for a full license, however, there are no restrictions at this time on vaccine use under the conditional license.
APHIS recently announced the availability of $26.2 million in funding to combat these diseases and issued a Federal Order requiring the reporting of new detections of PEDv and other new swine enteric coronavirus disease to APHIS or State animal health officials. Operations reporting these viruses must work with their veterinarian, USDA or state animal health officials to develop and implement a reasonable management plan to address the detected virus and prevent its spread. Plans will be based on industry-recommended best practices, and include disease monitoring through testing and biosecurity measures. These steps will help to reduce virus spread, and enable continued movement of animals for production and processing.
U.S. exports to China dropped sharply in April, falling 13 percent from the year-earlier period, and 37 percent from March. The country, the world’s largest consumer of pork, was the third biggest importer of U.S. pork by volume in the year up until April.
Experts say the PEDv is a “game-changer” for the pork industry this season and will last into the 2014-15 season, although it could recover quicker. ∆
The six previously published articles on US China Trade can be viewed at www.mafg.net.
JOHN M. LAROSE: Publisher, MidAmerica Farmer Grower
BETTY VALLE GEGG-NAEGER: Senior Staff Writer, MidAmerica Farmer Grower
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