People that have been following the pork markets recently know that the biggest trend affecting prices has been the African swine fever epidemic spreading across China.
As the disease devastates Chinese pig herds, which are the largest in the world, over 100 million animals are expected to be culled as a result of the disease. One of America’s top meatpacking CEO’s, however, has warned that this swine flu may very well spread into North America, leaving devastating consequences in its wake.
African swine fever, which is lethal for pigs but harmless to humans, was discovered in China last August and has proceeded to cull a massive portion of the country’s hog supply.
Previously China had remained spared as outbreaks were contained primarily in Eastern European countries. However, 2018 saw a surprise outbreak of the disease in Asian countries. Overall, exporters in Australia, Brazil, Europe, and the U.S. are expected to benefit from reduced Chinese pork supplies.
“This is an unusual, perhaps unprecedented, time for the protein industry. In my 39 years in the business, I’ve never seen an event that has the potential to change global protein production and consumption patterns as African swine fever does,” said Noel White, CEO of Tyson Foods (NYSE: TSN) in a call with investors. While he added that this opens up new opportunities for protein suppliers worldwide, he warned that there’s a big possibility that an outbreak could take place in the U.S. “I think the threat is real. I do think there is a distinct possibility it could come to the United States,” he added.
Should the disease spread to the 74.3 million pigs in the US, it would lead to an immediate shut down of American pork exports until the epidemic runs its course. Since the virus has no treatment or vaccine and can survive up to a year in the meat, feces, and blood of pigs, once an outbreak takes place it’s almost impossible to suppress.
Authorities have already stepped up their inspections at ports of entry to prevent this from happening, but should early signs of infection be spotted, expect major meatpacking companies in the U.S. to plummet in the markets.
Tyson Foods is the largest meat packer in the country, slaughtering tens of millions of animals each week. Share prices have been surging over the past couple weeks in response to the Chinese swine outbreak. As China is the largest consumer of pork in the world, other non-Chinese meat packers are expected to fill in the gap.
Tyson Foods Company Profile
Tyson Foods is the largest U.S. producer of processed chicken and beef. It’s also a large producer of processed pork and protein-based products under the brands Jimmy Dean, Hillshire Farm, Ball Park, Sara Lee, Aidells, and State Fair, to name a few.
Tyson sells 90% of its products through various U.S. channels, including retailers, foodservice distributors, restaurants, and noncommercial foodservice establishments, such as schools, healthcare facilities, and military bases. In addition, 10% of the company’s revenue comes from exports to Canada, Mexico, Brazil, Europe, China, and Japan. – Warrior Trading News
