China reshapes global meat markets as swine fever rages

LONDON/BEIJING -- China is scouring the world for meat to replace the millions of pigs killed by African swine fever (ASF), boosting prices, business and profits for European and South American meatpackers as it re-shapes global markets for pork, beef and chicken.

The European Union, the world's second largest pork producer after China, has ramped up sales to the Asian giant although it can only fill part of the shortfall caused by ASF. Argentina and Brazil have approved new export plants to meet demand and are selling beef and chickens, as well as pork, to fill the gap. U.S. producers, however, have been hampered due to tariffs imposed by Beijing.

Other Asian countries are also ready to step up imports as they, too, deal with outbreaks of ASF. Vietnam, the Philippines, North and South Korea, Laos, Myanmar and Cambodia are all struggling to contain outbreaks of the disease, which is deadly to pigs although not harmful to humans.

"It is very good news for those involved in processing and have licenses for exports to China," said Justin Sherrard, global strategist, animal protein at Rabobank.

Major EU pork processors include Danish Crown, Tonnies Group and Vion Food Group although the market is fragmented with many small- and medium-size players.

Shortages in the world's top pork consumer have been exacerbated by the upcoming Lunar New Year celebrations in late January, when pork, and pork dumplings in particular, play a central role in the food on offer.

One of the biggest European players Danish Crown said there had been a very clear jump in demand from China in the run-up to the Lunar New Year and it was bullish on the outlook for 2020.

China's state-owned agriculture conglomerate COFCO said this week it had agreed to buy $100 million of pork from Danish Crown in 2020 to help ease the domestic shortage.

NEW PLANTS IN SOUTH AMERICA

Rabobank estimates that China's hog herd, the world's largest, fell by half in the first eight months of 2019 and will likely shrink by 55 percent by the end of the year.

Many more meat plants in Argentina and Brazil have recently been approved to export to China including beef and chicken as well as pork.

Nicholas Lafontaine, a cattle rancher from the town of Azul, 300 kilometers (186 miles) southwest of Buenos Aires, said China had traditionally taken cheap cuts with premium steaks destined for the EU.

China is now taking the whole carcass, reducing the amount of meat sold on the local market for Argentina peso, a currency which has lost around a third of its value this year.

As processing margins have improved, plants have reopened.

"The other benefit that comes from growing Chinese demand is the reopening of beef plants, he said, adding that when a factory opens its doors it is thinking about China.

Neighboring Brazil has also benefited.

According to Brazilian meat trade groups, in one go Beijing authorized Brazil to more than double the number of beef plants with permits to sell directly to mainland China -- to 33.

Brazil exported 1.64 million tonnes of beef in 2018 with China buying 19.3 percent of the volume, trailing only Hong Kong. The South American country's exports have been forecast to rise to 1.8 million tonnes this year.

"China is the market paying the highest premiums for Brazilian meatpackers," Luciano Pascon, chief executive of privately-owned meatpacker Frigol, told Reuters in an interview.

TRADE WAR HITS US PRODUCERS

Hefty tariffs on American pork imposed by China as part of the ongoing trade conflict are likely to mean that the US industry will benefit less than its rivals.

US-based meat packers such as Smithfield Foods have, however, been able to secure some direct sales. Tyson Foods expects to benefit from African swine fever by increasing sales to China or other countries as the outbreak redirects global meat trading.

Tyson Foods share price has risen about 50 percent so far this year.

Trent Thiele, a farmer who raises about 60,000 hogs a year in Elma, Iowa, said, however, the trade war is hurting American hog producers.

Thiele said he would prefer selling US pork to Chinese buyers than picking up residual business elsewhere in the world because China is a main buyer of products such as pigs' feet and organ meat that other countries have little appetite for.

"A lot of our other competitor countries are obtaining the market share that naturally would have been ours if we didn't have the retaliatory tariffs," said Thiele, president of the Iowa Pork Producers Association.

ASTRONOMICAL

Imported pork ribs currently cost around 40,000 yuan ($5,680) per ton, compared with 17,600 yuan in spring 2019, traders said, while prices for other cuts such as pig front leg and rib meat have roughly doubled in that period.

"Right now, prices are astronomical, and the risk is very high," said a Beijing-based beef importer, who was struggling to gauge the right volumes to meet demand and avoid being left with expensive stock at the end of the holiday period.

The United Nations Food and Agriculture Organization's Meat Price Index is up 12.5 percent so far this year and is at the highest level since January 2015.

The pork component has risen by more than 20 percent.

The high global pork prices are even sparking interest in pig farming in predominately Muslim Kazahkstan.

"Not a week goes by without someone visiting us who wants to get into pig farming," said Maksut Baktibayev, chairman of Kazakhstan's Meat Union, an industry lobby group.

source: news.abs-cbn.com

Pig farmers pessimistic as China tries to talk down swine fever

BEIJING - Sun Dawu sighs sadly when asked about the death of thousands of his pigs, killed by the African swine fever outbreak that has been decimating hog herds across China.

"The pig farm was completely destroyed," he says quietly, fanning himself from the heat and flies on his large Hebei province farm outside Beijing.

"It's a painful process, it's painful to watch them die. We buried all the dead pigs five meters (16 feet) underground."

More than a year since swine fever began to spread across the country, China's pig farmers are wary of replenishing their stock -- and the disease could become a political and economic liability for the government.

Frustrated after a month of official stonewalling, Sun posted pictures of the dead pigs on social media platform Weibo -- quickly attracting tens of millions of views and forcing the local government to respond.

Pigs that were not killed by the fever were culled.

Eight months later, his restocked herd is healthy, but under government restrictions his pig farm is still sealed off. 

His livestock is quarantined and can't be sold for consumption until at least the second half of next year.

China's swine herd is down by about 40 percent, and the shortage has pushed prices of the country's meat staple up by at least half.

A Rabobank report warned China could lose 200 million pigs during the epidemic, and Sun said he believed the number of those affected is higher than official estimates.

"Some pig farmers dare not declare sick pigs, so they quietly sell off even dead pigs," he said.

TRADE WAR FALLOUT 

By the time swine fever broke out on his farm and killed his herd of 15,000, Sun says "all the pigs of the other farms were dead".

But only one case of swine fever has been officially reported in Hebei, according to the agriculture ministry -- Sun Dawu's farm.

The province was declared free of the disease in April.

The shortage is being exacerbated by stuttering imports from the US in a painful trade war.

And as it wears on, it is not just a problem for farmers, but also for the country's leaders -- afraid of social repercussions and spiraling economic costs.

"Historically, high food inflation has triggered bouts of urban protests," says Victor Shih, the Hi Ho Miu Lam chair professor at University of California San Diego.

Beijing has implemented several measures to boost the pig population, including subsidies of up to five million yuan ($700,000) for breeders.

They also announced in September that new large-scale breeding bases were being built in southwest Sichuan province with the capacity to produce two million pigs a year.

But farmers contacted by AFP -- reluctant to be identified -- were afraid to raise new herds despite government subsidies, fearing that any trade deal between Beijing and Washington would undercut Chinese producers or that their hogs would be taken away again.

"When the trade war between China and the US ends, the government will start to import large quantities of foreign pork and Chinese farmers will have no profit," a Hebei farmer surnamed Zhang told AFP.

'LOST TOO MUCH' 

In a bid to keep a grip on escalating prices, the government auctioned 30,000 tonnes of pork from its strategic meat reserves ahead of the National Day holiday. 

Officials insisted in September that there was sufficient supply and prices would now be stable.

But given the slowing economy and the trade war, "pork-driven inflation has further limited the government's options", says Shih.

The government also toyed with encouraging citizens to eat less meat -- efforts met with mockery.

"We should just eat the pig feed, it will be healthier," wrote one social media user after a front-page article in the state-run People's Daily extolled a vegetarian lifestyle.

Farmers also accuse governments of not doing enough to tackle the crisis, particularly local authorities that don't want to fork out compensation to farmers.

Sun started as a farmer three decades ago with 50 pigs, but now runs a large business that he says can absorb the shock of his losses -- hundreds of millions of yuan in total.

But others are not so lucky.

"Some pig farms just lost too much to rebuild," Sun said. 

source: news.abs-cbn.com

Happy holidays? Not in China if frozen pork is on the table

* China has released 30,000 tons of reserve pork this month

* Aims to keep lid on soaring prices ahead of holidays

* Consumers say volumes too small, frozen meat not appetizing

BEIJING - China's supermarkets are topping up their meat counters with frozen pork from state reserves, after prices of the nation's favorite protein source surged to budget-busting levels, threatening to mar this week's National Day festivities.

Pork, which has a prominent place at nearly every Chinese dinner table, is in short supply after a deadly virus infected and killed millions of hogs across China over the last year.

Beijing has stepped in to try and quell prices that have jumped to almost double what they were a year ago and are still climbing, releasing 30,000 tons of pork in three batches over the last fortnight.

That appears to have dampened further price increases for now and helped sales, at least in the capital Beijing.

"Pork is selling much better compared with three weeks ago," said a butcher at the Qianxi Street branch of Yonghui Superstores in southwestern Beijing.

"Today we have very cheap frozen pork belly, it's only 17.98 yuan (per kg, or $2.52 per pound) compared with 35.98 yuan for fresh," he said. "We're not sure where the meat is from but it must be from Beijing's reserves."

Cheaper meat will be a relief to many ahead of the holidays. Chinese typically gather for elaborate meals during festivals, and most of the repasts will feature pork in some form.

Sufficient pork supply is a "most basic requirement" for the people's welfare, said Vice Premier Hu Chunhua in a televised message to officials in late August. He urged them to guarantee supplies and increase the scale of reserves.

Shoppers in Beijing said they will not skimp on meat during the National Day holiday, whatever the price, although they have been reducing their intake at regular mealtimes.

"Before I would buy four or five ribs, but now I only buy two or three, as long as it's enough for a meal," said a retiree surnamed Wang shopping at the Yonghui store.

Many people are substituting chicken, duck or beef for some of their pork intake, with pork so pricy that even more expensive meats now appear affordable.

For some, however, it is hard to stomach a change in diet.

"My family doesn't like beef, it's a heating food, so I can only buy pork," said Wang, referring to the classification of foods as either "heating" or "cooling" in traditional Chinese medicine.

DROP IN THE OCEAN

State sales will have limited impact on prices overall, said Miranda Zhou, an analyst at Euromonitor, with total reserve volumes sold in recent weeks just a "drop in the ocean" in a country that eats about 40 million tonnes of pork a year.

News of the latest sale from state food stores was trending on Weibo, China's popular microblogging site, with many users commenting on how reserve pork had done little to cool prices.

Others questioned the quality of pork that had been in storage, describing it as "zombie meat".

"In addition to the small volumes, in the south they like fresh pork, so frozen pork really isn't appealing," said Zhou, the analyst.

A man surnamed Zheng shopping in a wet market in downtown Nanning, 2,000 km (1,250 miles) south of the capital, said he had not seen any frozen meat on sale there.

"We don't eat that kind of stuff here," he said.

"Even if there was frozen pork, we wouldn't buy it. We only eat fresh meat."

source: news.abs-cbn.com

Meet Kermit's new girlfriend

A new piggy is in town, and this time her name is Denise.

After Muppets star characters Kermit the Frog and Miss Piggy ended their relationship less than a month ago, both puppets have been given new love interests, according to People magazine.

"It appears the plush amphibian has already moved on," the magazine reported, saying that Kermit "has been spotted around town numerous times" with another pig, a pale redhead called Denise.

Miss Piggy doesn't seem to have a long-time replacement for her ex-flame, but Hollywood star Liam Hemsworth recently shared a photo with her captioned: "Spent Friday with the most beautiful girl in the world."



Miss Piggy and Kermit had been an item for years, with the pushy porcine diva typically lording it over the more reserved amphibian -- but the exact nature of their relationship status had been dubious before they split.

News of the breakup and new flames comes as ABC promotes their series "The Muppets", which premieres September 22.

source: www.abs-cbnnews.com