USA

Dark scenario for the US pork industry

Pork

An ASF outbreak could wipe out between $15 billion to $50 billion in revenues.

Posted on Apr 13 ,10:56

Dark scenario for the US pork industry

A recent study published by Iowa University on ASFImpact.com platform presents the risks associated with an African swine fever (ASF) outbreak in the US. Pork exports will be immediately hit, generating considerable losses for the industry, says the report. There are two scenarios taken into consideration, one with a horizon time of two years and the other one with at least 10 years of the disease confirmed in the US pig herd.
If ASF were identified in the US, export markets would immediately close to US pork, including ASF-positive countries such as China and the Philippines, which prohibit the importation of pork from any country with the ASF virus. US live hog prices would drop by 40 to 50 percent to sell the surplus of pork intended for export. The oversupply of pork in the domestic market would lead to price reductions of other proteins, according to the report. Fr the mild scenario (2 years), losses resulted in export markets are expected to reach $15 billion, based on the current data reported by the US pork industry.
"Pork production in the US exceeds domestic consumption by 25 to 30 percent, so it’s important to have export markets open as they are imperative to the vitality of the American pig farmer. Ensuring a two-year scenario versus the all-years scenario means a $35 billion difference to the industry because we avoid downsizing", considers one of the authors of the study, Dr. Dermot Hayes, Iowa State University.
For the two-years scenario, losses are estimated at $15 billion, while in the long-term scenario it could reach $50 billion due to the decline in the hog herd across the US. Besides that, containment measures are adding huge costs for the industry and authorities. "At any point in time, we have more than one million pigs on the road being transported in the United States. We need a method to quickly identify infected pigs and the pigs that have been in contact with infected pigs, so they can be euthanized. This would allow the industry to regain export markets before downsizing occurs, thus saving billions in losses,", added Dr. Hill.
The US Department of Agriculture and the industry are on high alert since the beginning of the ASF crisis in Asia. Last year, World Pork Expo, the main event fr the US pork industry has been canceled due to fear of an ASF outbreak and stricter control measures have been initiated at borders.
The ASF outbreak in China, the world's largest pig producer in the world (50%), has wiped out almost 50% of the national swine inventory. Since the decline of the Chinese herd, prices have exploded all over the world and the Asian country accounts for 35% of the global meat trade in a bid to offset the animal protein deficit in the market.

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