Tag Archives: China

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.

Factors still moving the markets include China as we move 7 days into that 30 day agreement.  Not a lot of movement talked about to this point.  Kind of leaves us on the fence & following technical.  Wheat continues to trek higher until today-but why is it going higher.  Current status of South American weather & crop progress.  Livestock market…Chinese holiday-sickness…people moving through the country.  ASF-is there concern with the week long holiday coming up for China?

 

Quiet start with the livestock.  Tone of the beef is just okay…macro’s have Brad concerned just a bit.  Cash cattle.  Average weights are disturbing.  Year on year comparisons come in higher.  Is the market tired for the cattle?  Hogs continue to torment.   New virus in China-how is that going to affect the markets & heading into the Chinese New Year Celebration.  Beans took it in the shorts-is it weather in South America, corn did better but problems talked about it in a variety including wheat.

 

Crazy week of reports.  From the January 10th report, Phase One, USMCA…but still beans had a rough week.  Shows volatility & one needs to be prepared.  Last 60 days we have been in a tight range.   Ethanol margins remain tight…China even mentioned ethanol in Phase One.  South American weather & current harvest.  Hogs could see the boost from the trade deals.  There is money to be made in the cattle market right now.

Why have the markets been down so much since the phase one trade deal came out? What are some of the details of the trade deal that you found encouraging? Are there parts of the trade deal that concern you? What does the market focus on now going forward?
How does the corn export demand look? How does the corn ethanol demand look? What does it take to turn the market back higher?

Phase One is signed.  What is the market direction for the next few months pushing through winter.  Beyond the trade deal USMCA would be the next big push.  Brazil real vs. U.S. dollar. We will have better demand going into 2020, but don’t expect it first quarter.  Feeder cattle charts.  Could we see stabilization in the hog market?  Current livestock demand.

U.S. Secretary Perdue issued the following statement after President Donald J. Trump signed the historic Phase One Trade Agreement between the United States and China:
“This agreement is proof President Trump’s negotiating strategy is working. While it took China a long time to realize President Trump was serious, this China Phase I Deal is a huge success for the entire economy. This agreement finally levels the playing field for U.S. agriculture and will be a bonanza for America’s farmers, ranchers, and producers,” said Secretary Perdue. “China has not played by the rules for too long, and I thank President Trump for standing up to their unfair trading practices and for putting America first. We look forward to exporting to Chinese customers hungry for American products.”

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The United States and China are set to take a step toward trade peace after 18 months of economic skirmishing. President Donald Trump and China’s chief trade negotiator plan to sign a modest agreement Wednesday that would ease some U.S. economic sanctions on China and have Beijing step up purchases of American farm products and other goods.

The deal would lower tensions in a fight that has slowed global growth, hurt American manufacturers and weighed on the Chinese economy.  But the “Phase 1” agreement would do little to force China to make the major economic changes such as reducing unfair subsidies for its own companies.

President Donald Trump signed a trade agreement with China Wednesday. The phase one deal, according to the Trump administration, is worth an extra $40-50 billion annually over the next two years in U.S. agricultural sales to China.

However, Senate Minority Leader Chuck Schumer earlier this week called the deal weak, suggesting Trump reached a watered-down agreement to claim a “win” during his reelection campaign. Further information suggests the figure may be $32 billion in increased ag purchases, not $40-50 billion.

Senator Chuck Grassley, a Republican from Iowa, attended the ceremony. Grassley welcomes the agreement but says, “Not only must China follow through with its commitments in this phase one deal, but also work toward a comprehensive agreement.”

President Trump says the agreement removes trade barriers for U.S. agricultural products, particularly for beef. Meanwhile, Agriculture Secretary Sonny Perdue says the agreement will benefit many different U.S. farm commodities.

The agreement should be implemented within 30 days, according to the Trump Administration.