Pork industry expert Jim Long says pork farmers in Iowa need to look to China to determine how successful they will be in the coming year.
“Over the next 12 months, our destiny in this industry is going to be tied to what is going on in China,” Long said.
Long is the CEO and partner of Genesus, the Canadian-based company that is the world’s largest independent producer of health-registered purebred swine. Long writes a weekly commentary on the swine industry that is printed in 17 languages across 27 countries.
He was invited by Precision Structures – PSI – of Wellman to talk about the world market for swine. More than 160 people attended, not surprising since Washington County is the second biggest county for pork production in Iowa, which itself is the second leading state in the country for pork production.
Long started by asking how many pork producers in the room thought 2019 was a good year. Only one raised his hand.
“Hopefully 2020 is going to be a lot better,” he said.
American exports are rising.
“You can see the total, not only in China, but everything everywhere is going up,” Long said. “There is only so much pork in the world. There is only so much protein in the world.”
He said he expects prices to improve soon.
“We are optimistic for 2020,” Long said. “Demand is there.”
He sees “decent” profits for American producers for the next three years.
African swine fever (ASF)has been devastating the pork industry over the past year in other countries.
He compared the response to the disease in Russia and China. When Russia got African swine fever in its hog herds authorities came in and killed all of the pigs, burned them and buried them. In China, pigs were sent to slaughter.
“They did not eliminate the herds; they put the meat into the food chain,” Long said.
He told the story of a Chinese farmer with about 80,000 sows he visited. The farmer told Long that he had three farms with African swine fever, but authorities told him “you don’t have ASF … send the pigs to slaughter … you never had ASF.”
He wanted to have his breeding stock tested for the disease, but the government would not allow him to do the testing.
Long added: “It’s a government denial that goes on there.”
The disease is not under control in China because they have not put practices in place to control it, Long said.
“China has no rules,” he said.
And farming practices in China can add to disease. He showed multi-lane highways covered with corn that was spread out to dry in the sun.
“Here’s corn down the road, and people are driving right over it,” Long said.
On top of that, herds are fed bagged feed in bags that are used over and over.
“I think we all know about disease and viruses. … How are you going to control ASF spreading when you are using bagged feed?” Long asked.
One thing the Americans have in their favor, according to Long, is President Trump’s hardline on trade with China.
“What President Trump has done is 100% right,” he said. “The one thing with the Chinese that I have negotiated with, they understand when you make your point and stick to it.”
Add the reduction in sow herds with improving trade agreements and the outlook for U.S. exports to China is improving with the trend line showing improved exports from the United States to China.
“We expect it will continue; it will increase,” Long said. “The Chinese need pork. I expect that number to keep increasing.”
“The big thing about China is you have 1.4 billion people eating 67 pounds of pork, so it’s a huge opportunity. They like pork; they eat pork.”