Aussie ag industry weighs up swine fever risks and opportunities

Aussie ag industry weighs up swine fever risks and opportunities


Grains
African Swine Fever in China may throw up opportunities for Australian red meat producers.

African Swine Fever in China may throw up opportunities for Australian red meat producers.

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The African Swine Fever outbreak in China will impact Australian grain exports to the Middle Kingdom, but does it throw up opportunities?

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WHILE the fall-out from the US / China trade war is nearly exclusively seen as being bad news for the Australian agriculture sector, feelings surrounding China's whopping outbreak of African Swine Fever (ASF) are much more nuanced.

International reports have suggested up to a third of China's total pig herd, or 200 million animals, will either die from the disease or be culled as a precaution.

The implications for Australia are difficult to read.

On one hand the large scale culling within the Chinese pig herd is lowering demand for grain exports, but on the other it could open up opportunities for other protein sources, such as Australian beef.

"ASF has no implications for human health, but given previous food safety scares in China, such as the melamine incident in 2008, you would imagine consumers will question the provenance of pork products and look at alternatives," said Rabobank senior grains and oilseeds analyst Cheryl Kalisch Gordon.

Andrew Weidemann, Grain Producers Australia chairman, had a glass half full approach to the issue.

"Generally you will find Australia has a good track record and reputation for good, safe food and fibre," Mr Weidemann said.

"There could be some opportunities, especially in the red meat sector.

"We're not a big enough pork producer to do much in that space but certainly I would expect there to be interest from China for Aussie beef and that in turn creates opportunities for the domestic grains industry."

Dr Kalisch Gordon said the Australian grains sector was not immediately exposed to the Chinese pig industry.

"There is talk that barley prices in Australia will be impacted, but in general most barley from Australia for use as feed in China goes into the poultry sector.

"You have to be very cheap to compete in the feed space in the Chinese pig industry and we are generally not at that price point."

From the dairy viewpoint, Rabobank's Michael Harvey said there was the potential for upward pressure on milk prices as a result of China culling dairy cows for beef.

However, he said immediately, the size of the losses in the Chinese pig industry would put pressure on dairy-derived animal feeds.

Peter McMeekin. Grain Brokers Australia, said he expected coarse grain values, across corn, sorghum and barley, to be hit to some degree or another by the ASF outbreak.

However, he said while Chinese demand would drop, other large pork producing nations, such as Brazil, Germany and Spain would ramp up production and thus demand in these nations would rise.

The story Aussie ag industry weighs up swine fever risks and opportunities first appeared on Farm Online.

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