ASF may impact global meat markets

LEFT: Rabobank analyst Blake Holgate says China’s ASF cases could rock global meat trade. (Photo: Rabobank)

AFRICAN swine fever has the potential to cause waves in the global meat trade, agricultural banker Rabobank says in a new report.

It says the continued spread of ASF through China’s pig population is resulting in increased slaughter, transport bans and volatile prices.

Rabobank animal proteins analyst Blake Holgate says there have been more than 60 confirmed ASF cases scattered across all of China’s major pork-producing provinces.

“While the majority of cases are in small-sized farms, several larger-scale farms have also been impacted,” he says.

“Given the sheer size of production and the fragmented structure, it will be a great challenge for China to control the disease spreading in the coming year.”

Holgate says while a decline in China’s pork production is clear, Chinese pork consumption is also expected to drop, giving rise to increases in the consumption and import of other animal proteins, including eggs, poultry, beef, mutton and seafood.

“Beef is not a major substitute for pork, however the pork supply shortage in China will likely also push up beef consumption,” Holgate says.

“Given China is already an important and growing im-porter of beef, depending on how pork production and prices develop, there could be increased demand from China for beef imports over the coming months,” he said.

New Zealand has sign-

ificantly increased beef exports to China in recent times – exports jumped 34 per cent in vol-ume and 38

per cent in value during the 2017/18 season and Rabobank says it is well-placed to supply China should there be any increase in demand for imported beef.

Rabobank expects cattle prices to face further downward pressure for the remainder of 2018, and into early 2019, as the New Zealand cattle slaughter begins to gain pace against the backdrop of weaker US demand.

To limit the extent of any price declines, exporters will be looking to redirect increasing volumes of product into China, where the short-medium demand outlook remains positive.

New Zealand beef production for the 2018/19 season is forecast to be down three per cent. Export volumes should decline marginally over the next 12 months.

While national herd numbers will remain stable, Rabobank says, cow slaughter is expected to be lower than in 2017/18, when the culling of a maturing New Zealand dairy herd led to an eight per cent lift in overall beef production.

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