Don Close of Rabo AgriFinance Tells Ron Hays African Swine Fever Continues to Reshape the Global Protein MarketTue, 19 Nov 2019 06:43:14 CST
Radio Oklahoma Ag Network Farm Director Ron Hays caught up with Don Close, Animal Protein Analyst of Rabo Agri-finance, at the National Association of Farm Broadcasters in Kansas City to talk about the impact of African Swine Fever on the beef cattle industry here in the US and globally. African Swine Fever remains a big topic for producers and has had a big impact on not just the pork industry, but for all the meat complex including our beef cattle producers.
There have been reports from 50 to 60 percent of the swine herd being gone, but Close believes the rate of erosion has leveled off “Once you get to 55% or greater of your live hog inventory gone there’s less there to lose, but we are also starting to see efforts to repopulate those facilities in China.” However, the disease is still spreading in places like Indonesia. Close says, “It continues to spread, and its going to continue to be the central focal point of the market through 2020.” Close goes onto say that while we are not seeing that much additional loss in hog numbers, but it is all the countries that have the potential to export pork, “So many of those countries are starting to be in over-subscribed position that they have over sold what they can sell so that leaves the U.S. as about the only supplier left in a global market that has a supply capable of export. That supply side is becoming much tighter.”
So how long will we continue to see the repercussions of African Swine Fever? Close believes it will be closer to 2025, “We had been looking at it from probably a 5-year view, and clearly in that time span we will have seen the Chinese pork industry totally restructured. When this started, we were estimating that 45% of that production was back yard hog production, those guys will essential be taken out of the market over this rebuild and it will be with new facilities, new construction, and a new location. So, it will totally restructure China’s pork industry.”
Close believes that the U.S. has always been very Independent and a big leader in imports of protein and exports of protein. He says, “Now as the global trade has expanded, the U.S has happened to recalibrate and readjust on how we think about price forecasting. So you take all us analysts that typically think about U.S. markets from a U.S. base and we are having to re-think how we do our job because these global prices are so influential and can be such a big impact so fast that that is a new development for us.”
Click on the LISTEN BAR below to hear more from Don Close as he talks with Ron Hays in today's Beef Buzz.
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Network and is a regular audio feature found on this website as well. Click on the LISTEN BAR below for today's show and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.
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