By Megan Durisin, Brian Parkin and Isis Almeida

A deadly pig disease has just entered Germany for the first time, threatening to hammer exports from Europe’s biggest hog-producing nation.

A confirmed case of African swine fever has been identified in the eastern state of Brandenburg, Agriculture Minister Julia Kloeckner said Thursday at a briefing in Berlin. The virus, which kills most infected pigs within 10 days but is not harmful to humans, was detected in the corpse of a wild boar found near the Polish border.

Tests were conducted at Germany’s animal health institute and sensitive areas will now be cordoned off to try to prevent the disease spreading, Kloeckner said.

A key supplier to China, the largest consumer, Germany stepped up efforts to prevent the disease from entering the country since it emerged in western Poland late last year. That included training dogs to sniff out dead wild boar, stockpiling electric fences along the eastern border and urging drivers not to toss ham-sandwich scraps out the window. Eastern Europe has dealt with ASF outbreaks for several years, and neighboring Belgium has also seen cases in wild animals since 2018.

The ASF case in Brandenburg deals a further blow to Germany as it struggles with the coronavirus pandemic. A nationwide lockdown plunged the economy into its worst recession since World War Two and activity isn’t expected to return to pre-crisis levels until the end of next year at the earliest.

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Germany’s largest pork plant was shuttered for a month this summer after more than 1,000 workers tested positive for Covid-19, and additional abattoirs also faced temporary closures from outbreaks. That’s kept output below normal levels and meat producers throughout Europe and the Americas saw similar problems as slaughterhouses became hotspots for the virus.

As soon as a case of ASF is confirmed, even if it’s a wild pig, German pork exports to countries outside the EU are no longer allowed, while sales to the bloc are still possible under certain conditions, according to the DBV farm lobby.

A verified case could bring German exports outside the EU to a “fairly rapid halt,” Justin Sherrard, an animal-protein strategist at Rabobank, said before Kloeckner’s announcement. That may benefit sales from other European shippers, including Spain or Denmark, as well as U.S., Canada or Brazil.

That would come at a time when Chinese purchases have been surging as the nation attempts to rebuild its own herds after outbreaks there decimated production. The U.S. Department of Agriculture expects global pork shipments to climb by almost a fifth compared with 2019. Chicago hog futures reached a four-month high on Wednesday.

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“This is very friendly, bullish, to U.S. pork prices, if German pork exports are shut down,” said Dennis Smith, a senior account executive at Archer Financial Services. America has been exporting record amounts of pork to China recently.

Kloecker said Germany informed China overnight of the outbreak, but declined to comment further. China accounted for more than half of EU pork exports in the first six months of the year, government data show.

German sales in the EU would be protected by using “regionalization” rules to contain the outbreak and maintain trade within the bloc, Kloeckner said. Germany will ring-fence the state of Brandenburg where the case occurred, banning pork-product and livestock shipments, she said.

Still, prices across the continent are likely to be pressured amid excess supply, said Rupert Claxton, meat director at consultant Gira. While it’s possible some nations may restrict imports on a regional instead of national basis, many key Asian markets banned Belgian supplies after an outbreak in 2018.

Plus, more cases in wild pigs are likely as the disease is highly infectious and there’s no vaccine.

“There’s no question that we expect it to continue to creep across Germany,” Claxton said. “Once it’s in wild boar in the forests there, it can be very difficult to control.”

Neighboring Poland has recently seen a rise in cases, including more than 80 this year at domestic pig farms or backyard holdings. European Commission estimates show the nation has more than 3,000 confirmed infections, mostly in wild boar. ASF can be spread by direct contact between sick and healthy animals, as well as through feeding on garbage containing infected meat and by soft ticks.

Brandeburg, a state on Germany’s border with Poland, will adopt measures to contain the disease, restricting the movement of people and livestock close to the outbreak area and ordering hunters to cull wild boar, Kloeckner said.

--With assistance from Michael Hirtzer and Agnieszka de Sousa.

© 2020 Bloomberg L.P.