A world bacon shortage? ‘Pig Ebola’ slams Asian Big Pork industry, leading to inflation fears

A world bacon shortage? ‘Pig Ebola’ slams Asian Big Pork industry, leading to inflation fears

The world is looking at a potential shortage of bacon and other pork products as African Swine Fever, nicknamed ‘Pig Ebola’, has spread through Asia.

Last August, a farm with fewer than 400 hogs on the outskirts of Shenyang was found to harbor African swine fever, the first ever occurrence of the contagious viral disease in the country with half the world’s pigs. Forty-seven head had died, triggering emergency measures including mass culling and a blockade to stop the transportation of livestock. Within days, a government notice proclaimed the outbreak “effectively controlled.”

It was too late. By then, the disease had literally gone viral, dispersed across hundreds of miles in sickened animals, contaminated food, and in dirt and dust on truck tires and clothing. Nine months later, the contagion has spread nationwide, crossed borders to Mongolia, Vietnam and Cambodia, and bolstered meat markets globally.

While official estimates count 1 million culled hogs, slaughter data suggest 100 times more will be removed from China’s 440 million-strong swine herd in 2019, the Chinese zodiac’s “year of the pig.” The U.S. Department of Agriculture forecast in April a decline of 134 million head — equivalent to the entire annual output of American pigs — and the worst slump since the department began counting China’s pigs in the mid 1970s.

Thailand has now banned the import of pigs from Myanmar, in hopes to stop the spread of the highly contagious virus any further in Asia.

There is no vaccination for African swine fever, which causes pigs to internally hemorrhage until they die.

The only option to contain the disease is to kill any contaminated animals.

Some estimates say that in China up to 200m animals may eventually be slaughtered.

The virus can last for several weeks on anything from clothes to vehicles. Allowing for it to easily travel long distances.

Eastern Europe has also been battling ‘Pig Ebola’, with the most recent cases being reported in Serbia.

While most affected countries in the region aren’t major pork producers, they remain in close proximity to key exporters further west. African swine fever has leaped into the global spotlight, as China — home to half the world’s hogs — and other Asian nations lost millions of pigs from outbreaks that began a year ago.

“The outbreak situation in eastern member states remains pressing,” Rabobank analysts said in a July report. Risks of the disease’s spread have spurred “pessimism” among producers in northern Europe and discouraged herd expansion.

If there is any good news to be had in this story, it is that American farmers may benefit from meeting the global pork demands.

… China is a willing buyer of American animal protein despite the ongoing trade war between Washington and Beijing.

“I am not sure how much more serious the trade war will get, but my expectation is that China will continue to buy U.S. pork,” said McCracken. “There is currently not enough pork (or other protein) available in the rest of the world to fully meet China’s protein needs. We expect U.S. pork, beef, and poultry to help fill the void until China can rebuild its internal supplies.”

Meanwhile, economists are worried that the escalation in meat prices in Asia could drive inflation.

“The most obvious channel through which this will impact (emerging markets) is via higher inflation,” James Swanston, assistant economist at Capital Economics, wrote in a note last week.

“If the disease spreads and increases in severity, it would probably make a notable contribution to inflation in parts of Asia … and Eastern Europe,” he said.

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