Lyle Jones, Director of Sales, Genesus China
ASF continues to make headlines in China as the as the first major outbreak was recently reported in Heilongjiang province. This farms total inventory was 73,000 pigs, of which 4,686 pigs contracted the disease and 3,766 pigs died. This is the largest reported ASF case with the biggest losses so far in China.
The Chinese General Office of the Ministry of Agriculture and Rural Affairs has been very active in its response to the spread of ASF and has undertaken a number of steps aimed at controlling the disease including new policies regulating pig movements, illegal slaughterhouses and transportation of pork.
We are told that the government is encouraging producers to build slaughterhouses for their own production systems to minimize the transportation of live animals and risk of contracting or spreading the disease. Plans are to build more large-scale slaughterhouses and crack down on illegal hog slaughtering. No doubt these steps will accelerate consolidation within the pork industry in china.
The disruption of live pig and pork meat movements continues to have a profound effect upon local pig pricing from one region to another. We see prices in the Northeast of China region as low as $ 0.55 per pound. However, pricing is much more favorable for producers within the East of China region with some markets such as in Zhejiang Province as high as $1.20 per pound.
Not only is their currently a wide variation of pig prices from region to region, but we note with interest the range within each province can also vary widely. For example within Fujian Province in Southern China near Hong Kong, the price ranges from $0.87- $1.53 per pound.
It is obvious that ASF is having significant effects upon the market in China. We expect that the consolidation of the Swine Industry in China will only be accelerated by the pressures to move from smaller farms to large-scale vertically integrated production systems.
All this, reminds me of the consolidation that occurred within the USA during the 1990’s but at a much greater scale and magnitude. There will be opportunities for those who are able to adapt. Hang on, it should be an interesting next several months in the New Year 2019 ahead.
This post was written by Genesus