April 15

4/15 - China’s African Swine Fever just keeps going from bad to worse. On Thursday, Rabobank said that up to 200 million Chinese pigs could be culled or die as result of the disease. The drop would drag down China’s 2019 pork output by 30% from a year ago – a decline of 16 million metric tons. This loss is 30% larger than the total U.S. annual pork output. Consequently (and despite the trade war) China bought 23,800 tons of U.S. pork in early March and followed that with a 77,732 ton purchase in early April. According to Bloomberg, Chinese officials could buy up to 300,000 metric tons of U.S. pork in 2019. Expect any trade deal with China to include large amounts U.S. pork, poultry and beef. Lean hog futures, which averaged $55.71/cwt for the month of Feb, closed at $79.30 on Friday. Forward contracts for Aug, which averaged $54.48 in 2018, are trading at $101.37.

Sheena Levi