Tag Archives: China

U.S. pork producers don’t seem optimistic about a potential trade deal with the European Union coming together anytime soon. Nick Giordano is the Vice President of Global Government Affairs for the National Pork Producers Council.

Giordano tells Politico that he’s “very skeptical” that the two sides will even reach a mini agreement in the weeks ahead. He feels the real goal should be a comprehensive trade pact covering all sectors of agriculture. “It’s outrageous that a market of that size, with that level of income, is so closed to us,” Giordano says. “They’re stealing jobs from us because of their protectionism and that’s unacceptable.”

The VP says there will be widespread support in the U.S. agriculture community for the Trump Administration to take tough action against the EU if there are no concessions regarding a more open EU market. Meantime, U.S. cattlemen might annually sell $4 billion worth of beef to China within the next five years.

Kent Baucus, Senior Director of International Affairs with the National Cattlemen’s Beef Association, says the Phase One trade deal and the meat shortage in China cause by African Swine Fever should drive U.S. beef exports higher. “We haven’t even scratched the surface on the Chinese market,” he says. “There is a tremendous amount of unmet protein demand in China.

Grains settled nearly opposite of Tuesday with soybeans higher, corn and wheat lower. Arlan Suderman, Chief Economist for INTL FC Stone, shares his thoughts on why the wheat bulls may have been a little overdone on Tuesday.  Suderman also shares INTL FC Stones thoughts on Friday’s USDA Forum.

Currencies play a significant factor in grain export competitiveness around the world.  Suderman looks into how the US Dollar is extremely strong against the Brazilian Real impacting soybean exports. The higher dollar though is not as big of a factor for US protein exports. Though there are logistical issues within in China limiting frozen meat exports from the US.

Suderman also updates on the latest happenings from China and the corona virus. As China looks to get its economy back on it’s feet that could mean a big stimulus package. Suderman explains how Chinese stimulus may be beneficial to US exports.

Troy:  Higher corn & wheat, lower soybeans after a 3 day weekend.  Coronavirus fund positions & markets.  Australia is short on wheat.  Eric-Cattle & demand. Australia and export movement.  Cold storage has a full freezer would give the U.S. an export opportunity.

 

The Livestock Marketing Information Center released Analysis and Comments on the American sheep flock this week and said two “unusual developments could factor into the lamb market calculus during the next 12 to 24 months.”

 

“First, the growth rate of American lamb and mutton imports might moderate significantly as the Australian flock has downsized due to drought, and China imports more-and-more of all animal-based proteins driven by the African Swine Fever epidemic inducing reductions in their pork production,” read the report. “However, in the near-term, the China story has a new dimension of uncertainty with the Novel coronavirus epicenter in Wuhan, China. Second, 2020 brings on line both opportunities and potential disruptions to the sector – the opening of a modern, federally inspected lamb packing plant in Colorado (Colorado Lamb Processors near the town of Brush). That state-of-the-art plant is scheduled to begin harvesting animals late in the first quarter of the year, or early in the second.”

 

“In the face of the developments listed above, for the next two years, annual changes in the supply of American lambs are expected to be rather modest. Importantly, the two unusual developments described above, provide uncertainty regarding how much U.S. prices increase and how volatile markets are.”

 

However, the report concludes with some promising news.

 

“Overall, for the first three quarters of 2020, look for lamb prices (slaughter and feeder) to be at or above 2019. For slaughter lambs, the largest percentage year-over-year gain is expected to be in the first quarter. The second quarter might bring the biggest gain from 2019 for feeder lambs. Note that the first quarter of 2019 had very low slaughter lamb prices compared to the balance of that year. Even though lamb supplies should remain tight during the fourth quarter, the LMIC price forecast incorporates some pressure from competing meats, especially huge pork supplies. Still, lamb prices that quarter might be very close to 2019.”

 

Markets continue to narrow.  Grains trade lower on a Thursday.  Commitments are down 26% from a year ago on corn.  Will we be able to move forward?  Beans were able to test $9.00.  Coronavirus continues to raise issues, and avian bird flu continues to be an issue. More spreading from hogs to cattle.  Hogs might have seen a new low.  Markets right now importing into China causing problems.

Turn around on the grains today.  Coronavirus continues to be the headline that is shaping the markets.  China has taken resources away from African Swine Fever to control Coronavirus.  Boots on the ground gives us a first hand look.  What does this mean for Phase One?  South American Weather.  How is harvest going?  Delay of planting in the U.S.

 

China is seeking more flexibility from the United States on promises made in the Phase One trade agreement. The agreement signed last month allows China and the U.S. to engage in dialog for changes “in the event that a natural disaster or other unforeseeable event” delays either country from complying with the trade deal.

Bloomberg News reports China is expected to seek consultation on that basis, as the nation grapples with the coronavirus outbreak. China may have trouble meeting the requirements of the trade agreement if the virus continues to disrupt demand. China’s Foreign Ministry Monday also claimed that “The U.S. government hasn’t provided any substantive assistance to us.”

Meanwhile, the U.S. Centers for Disease Control says its actions seek to stop the spread of the virus. The CDS warns more coronavirus cases are likely to be identified in the coming days, including more cases in the United States. It’s also likely that person-to-person spread will continue to occur.

Despite 2019 having been China’s official “Year of the Pig,” things could not have been much worse for the nation’s swine herd, its farmers or the country’s 1.4 billion consumers who have a strong preference for pork as a protein.

On a positive note, official reports of African swine fever (ASF) outbreaks in China were more of a trickle in the second half of last year compared with the prior nine or so months. However, many industry experts believe that the country has little hope to rebound its ability to produce more pork in 2020. The main reason? The breeding herd. Last year, every province officially became ASF-positive. This resulted in the country losing about half of its swine herd, which equates to roughly one-quarter of the world’s swine herd.

According to Dave Pyburn, the Pork Checkoff’s chief veterinarian, China’s ASF woes are many.

“We continue to monitor the situation closely here and hope that China will see some relief,” Pyburn said. “But it’s not looking very promising with reports of ongoing ASF outbreaks and no real sense that an overall control strategy is being adhered to in the country. Without a stringent control methodology that’s fully implemented, ASF will continue to plague China for years.”

In the run-up to the Chinese New Year, which starts on Jan. 25, the Chinese Ministry of Agriculture and Rural Affairs has organized nationwide ASF control measures focused on pork slaughter facilities. This entails implementing self-ASF detection and an official veterinarian station in slaughterhouses, conducting responsible meat quality inspection, not keeping “unqualified” products in inventory and stock management, and maintaining a safe meat production system to ensure safety and quality of meat.

In yet another blow to China’s pork situation, in December the nation’s official media outlets reported intentional ASF infection of healthy swine herds by criminal elements. The gambit is based partly on the buildup to China’s official Lunar New Year celebrations, which start Jan. 25. The criminals know that consumers stock up on pork, which increases demand and causes prices to soar. By successfully infecting healthy pig farms using technology such as drones laden with ASF-positive material, the outlaws then offer the farmers deeply discounted prices for their pigs and sell the pork on the black market for huge profits.

Vietnam Shows Some Promise
While it’s not time for celebration in Vietnam regarding ASF, there is a glimmer of hope. Along with the government’s collaboration on much-needed assistance from the outside to control the deadly disease, recent statistics show some promise, with only 152,000 pigs culled in November compared with last May when 1.2 million pigs were either culled or died.

First detected in February last year, ASF has spread to all 63 provinces of Vietnam. According to a report by USDA’s Foreign Agricultural Service, ASF in Vietnam led to the death and culling of about 5.9 million pigs, or about 22% of the total swine population, pushing prices to record highs. Although the end of the ASF outbreak can’t be known, the rate of reported ASF cases appears to be slowing.

With its ongoing work in Vietnam, the Swine Health information Center (SHIC) has continued to make headway on its USDA-funded research grant on several fronts. According to SHIC’s executive director, Paul Sundberg, the main benefit for U.S. producers is to learn how ASF acts on farms today and responds to various control measures so that they can be prepared to respond to it here if needed.

“This research is allowing us to see firsthand how ASF responds in pig populations of 500 or 1,000 at a time and not just 10 or 12 in a pen like we can do in our highly controlled research facilities in North America,” Sundberg said.

Last month, Vietnam’s ministry of agriculture released more rules concerning restocking of pig farms and selling of live pigs and pork. All pork producers received a letter advising them to minimize the risk of disease recurrence in accordance with current regulations on restocking. They also were advised to adhere to strict application of biosecurity, avoid hoarding to ensure price stability and to not be involved in illegal trading of pigs or slaughtered pigs across the Vietnam border.