Not sure the market gets it,” is how hog commentator Jim Long described what is going on as a result of the enormous hog loss due to the African Swine Fever horrific disaster in China, other Asian and European countries.
“We sure wonder if the U.S. lean futures markets get what’s coming from the unprecedented liquidation of China’s sow herd,” exclaimed Long. “While we were in China, we heard Rabobank executive tell us that China’s pork shortfall in 2019 would be in the 16 million tonne range. The U.S. produced a total of 11.942 tonnes in 2018. We understand that a U.S. packer is about to start sending 50,000 hog carcasses a week to China. We were surprised in our two weeks travels in China that most we talked to believe that the China sow herd has declined in the 50 per cent range.
A foreign veterinarian that works in China wrote last week;
“This is the time we must work together. They will need to replace 20 to 30 million sows! Note the Chinese eat the whole United Kingdom herd in a week (6 days to be precise).”
In a news article by Michael Hirtzerin in Bloomberg May 18, ‘The Mystery of Just How Much U.S. Pork Is Going to China,’ Hirtzer wrote, “U.S. pork exporters are getting quite a boost as a massive outbreak of African swine fever decimates hog herds in China. But just how big that boost may be is a bit of a mystery.”
Two different U.S. agencies report on pork exports in different ways covering different periods, and the findings can offer widely disparate results, analysts say. At the same time, a push by China’s buyers toward whole or half carcasses, rather than the individual cuts the data traditionally focuses on, may be skewing the findings.

Another international vet and livestock consultant Dr. John Carr who noted regarding that article in an email, “China owns Smithfield – surely the owners (Chinese) will take as many as they need – maybe all of them? And why would the Chinese pay a tariff on their pigs? Interesting question.”
“I read somewhere that China imports 70 per cent of the worlds’ soybeans. If China production declines 200 million head, the need for soybeans will decrease greatly. Also the need for corn, premix, vitamins etc. China is near self-sufficiency on corn so the current drop in hog production all but guarantees that China may not need any corn imports,” said Long. “The Chinese strategy we believe is strategic. The facts on African Swine Fever (AFS) elimination are spotty. In China, all say no one knows for sure what liquidation is. It’s all industry conjecture. This, in itself, has kept a lid on global prices. We expect the Chinese as good capitalists wish to use lower global cash hog markets to lock in pork supply quietly. The amount of pork needed is mind-boggling.”
Long said more than one Chinese industry person told him it would take five years for the Chinese pork industry to recover.
“I expect 2019 is Chinas’ 1998. 1998 was when U.S. hog prices dropped to 8 ¢ lb. When the dust settled many of the larger hog producing companies had new ownership or consolidated into other companies. We expect that ASF could do the same to China,” he said. “We understand some of Chinas largest companies have lost up to and over 50 per cent of their sow herds. The financial impact could be mind-boggling.”
Long expects China’s hog prices will soar after the cold storage supply gets emptied due to coming ASF testing, the timing of sow herd liquidations to market hogs (about August), and seasonal pork demand. Most in China expect hog prices in the 23-28 RMB range kilo ($1.54-$2.00 U.S. lb. live weight) yet this year.
“If that happens our expectation that all Hog Prices in the world will set new record highs is a no brainer.” •
— By Harry Siemens