African swine fever has decimated Chinese pork production and undoubtedly caused a major increase in China’s pork imports. But where the Chinese are getting their pork from may come as a surprise.
Since August 2018, China has lost at least 85 million head of hogs and almost 10 million sows, according to statistics from the Ministry of Agriculture and Rural Affairs of China. Conversely, the country is importing far more pork than in recent years, with 1,805,220 metric tons committed to China through the first five months of 2019.
While the Chinese demand for pork may seem promising, the U.S. is only supplying about 8% of Chinese pork imports, according to the August edition of Ag Decision Maker, a monthly newsletter from Iowa State University Extension. In an article titled Who benefits most from China’s growing import demand due to African swine fever, ISU Extension economists explain what’s going on with global pork exports to China so far this year.
The major beneficiaries, accounting for more than half of China’s pork imports since January 2018, are Germany, Spain, France and the United Kingdom.
China buying less grain
The reduction in Chinese pork production has also decreased the country’s demand for grain. Feed grain demand by China from January through May is down by about 15% for soybeans and almost half for soymeal, compared to the same time last year.
The authors of the ISU Extension article — Wendong Zhang, assistant professor and ISU Extension economist, and Tao Xiong, associate professor of ag economics and a visiting CARD scholar at ISU — examine the impact of the current trade war with China. They also review trade agreements from the past, as well as improvements in European transportation, which has led to increased purchases of pork from those countries.
Europe, not the U.S, benefits most
“A closer examination of the global meat trade reveals that Europe, not the U.S., benefits most from China’s growing demand due to ASF,” according to the authors. They acknowledge this is in part due to China’s better transportation system for reaching Europe via the new Belt and Road Initiative.
However, the authors conclude that trade, or lack of trade, is still the biggest factor causing the decrease in exports of U.S. meat to China. “U.S. pork, beef and poultry exports to China still have significant room for growth, and a trade deal with China would be a valuable first step,” Zhang says.
ASF WIDESPREAD: This map of African swine fever cases in mainland China is based on estimates of the toll the hog disease has taken, as published in the CARD Agricultural Policy Review, an Iowa State University publication.
There is evidence of meat substitution to chicken and beef by Chinese consumers. The incidence of ASF in China understandably heightens Chinese consumer concerns about the safety and quality of their domestically produced pork. However, U.S. beef was banned from import into China in 2003 and this didn’t change until 2017 when both countries reached a new agreement.
Today, mostly because of tariffs, U.S. beef exports to China are at miniscule levels compared to pork. Over the past 18 months, China imported broiler chicken products in insignificant amounts, a trend that goes back to the 2009 trade dispute.