China is getting its pig epidemic under control, but it’s not out of the woods yet

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Farms Pig, Veterinary Asians working in pig farms. Vaccinated pigs.

Lau, a cofounder of the farm, then uses an electrical pump to spray his rubber boots with disinfectant and wash his hands before entering the farm’s pig weaning facility, which houses some 4,000 pigs between 1 and 8 months old.

Lau’s daily routine has nothing to do with COVID-19. Rather, it’s meant to halt the spread of African Swine Fever (ASF), a deadly pathogen that has ravaged global pig herds.

ASF isn’t harmful to humans. But for pigs, it is 95% to 100% fatal. The disease spreads like wildfire. Droplets of ASF can live for weeks on surfaces like the soles of shoes or sides of vehicles. It can also survive for months on pork products and spread between farms through ticks or flies.

Lau’s daily disinfecting routine has been mandatory for anyone visiting the farm since 2018, when ASF first emerged in China.

The weaning facility doesn’t smell like a typical pig farm. That’s because each pen is fitted with slatted, interchangeable plastic mats on the floors, allowing waste to fall through. The facility also features a temperature-controlled ventilation system, which roars like a jet engine as it funnels clean air to the pigs.

The barn is divided into 10 large rooms, each housing several hundred 1-month-old piglets. In one unit, about 30 young pigs play with rubber chew toys and munch their feed, a mix of imported corn and vitamins designed by a nutritionist. The mix is piped into the pens automatically to minimize human contact.

Many of the amenities of Lau’s high-tech barn were in place before ASF became a real threat in 2018. But the ventilation system and automatic feeding machines have become essential weapons in the fight to keep the facility free of the disease. Lau says ASF is a source of constant stress for him and his brother John, who founded the farm.

“We were so worried that sometimes we couldn’t even sleep, just thinking about the disease,” John Lau says of ASF’s arrival in China in 2018.

Since no ASF vaccine has been approved, the only surefire way to prevent transmission once a case is detected is mass slaughter—meaning that even one infected pig poses an existential threat to a relatively small producer like Hong Kong Heritage Pork.

“You have to cull everything, absolutely everything,” says John Lau.

Since ASF first emerged in China in 2018, the disease has devastated the country’s hogs, wiping out some 50% of the country’s pig population. China’s mass culling—the country is the world’s largest producer and consumer of pork—rocked the world’s $300 billion pork market, costing the industry as much as $130 billion in total losses.

But over the past year, China has managed to get a handle on the pig pandemic, repopulating its pigs through improved biosafety measures and shifting production to large farms that can afford more biosecurity. China’s hog resurgence may be fragile—given the ever-present threat of fresh ASF outbreaks—but the new supply of pigs is already helping revive global markets and has become one of the sole forces easing inflation fears in the world’s second-largest economy.

ASF originated in Kenya in 1921. The first case outside of Africa was reported in Portugal in 1957. Since then, ASF outbreaks have been largely concentrated in Europe and Russia but have also spread to places like Cuba.

China reported its first case of ASF in northern Liaoning province on Aug. 1, 2018. It was the first instance of the disease in East Asia.

Chinese farmers culled tens of thousands of pigs in response, but by the time the outbreak was discovered it was already raging out of control. By early 2019, outbreaks were reported in nearly every province in China as well as in neighboring countries like Vietnam and Thailand.

“From an animal disease perspective, [ASF in China] is probably the biggest outbreak we ever had of any disease,” says Dirk Pfeiffer, a veterinary epidemiologist at the City University of Hong Kong.

Experts estimate that since 2018 as many as 300 million pigs, the equivalent of 25% of the global hog population, have died or were culled in China owing to ASF outbreaks.

In China, the infected pigs and mass culling cut pork production by a third. In 2019 and early 2020, pork prices soared to record highs of over 50 RMB per kilogram ($3.50 per pound), up from under 20 RMB per kilogram ($1.50 per pound) in mid-2018.

The drop in pork production also meant China needed fewer soybeans and less corn, which hit farmers around the world. After ASF emerged in 2018, China’s soybean imports dropped by 7.9% compared with the previous year. By 2019, soybean prices in the U.S. had dipped below $8 per bushel for the first time in a decade. The drop in demand for pig feed hit just as China slapped tariffs of up to 33% on soybean imports from the U.S. amid the U.S.-China trade war.

To compensate for the decrease in domestic pork supply, China ramped up pork imports from places like Brazil and the U.S., but it also sought to reshape its domestic industry.

Pfeiffer says this period fundamentally transformed pork production in China to favor larger firms. “Small to medium-sized farms have suboptimal biosecurity behaviors,” says Pfeiffer, and were driven out of the market after culling entire herds and not being able to afford ASF precautions. “So the way around that was to go for big farms.”

Larger farms could cover the cost of disinfecting trucks, higher quality feed, and buying PPE to ensure staff didn’t bring the disease in from outside, he says.

The firms also got government help. In September 2019, China’s central government called on the pig industry to rebuild the country’s pork stocks, extending an estimated $60 billion to top pork producers to repopulate the country’s farms.

Between 2019 and 2020, three of China’s top producers more than doubled the number of pigs they produced, according to the Canadian industry research firm Genesus. The world’s top sow producer, China’s Muyuan Foodstuff, doubled production from 1.3 million sows in 2019 to 2.6 million in 2020.

This year, China’s government implemented measures to regionalize the country’s pork industry, splitting the country into five zones, with each region responsible for producing the pigs consumed in their zone.

Edgar Wayne Johnson, a senior technical consultant with Enable Ag-Tech Consulting in Beijing, says such policies are likely stemming outbreaks, but also that ASF has not been eradicated in China.

Cases are likely being missed, he says, and the distribution of unregulated vaccines—potentially millions of them—threatens to create new, virulent strains of the virus.

“There are still pigs going to the slaughterhouse every day with ASF,” Johnson says.

ASF outbreaks notwithstanding, China’s pig herds are coming back.

In the first quarter of 2021, China’s pork production rose 32% in comparison with the previous year, and its pig herd increased to 416 million sows, up 30% from the year before.

For 2021, the U.S. Department of Agriculture forecasts that China’s pork production will rise 14% compared with 2020. The financial services firm Rabobank is slightly less bullish, predicting an 8% to 10% recovery in its production.

But the modest gains do not explain why China’s pork prices have fallen so sharply in recent weeks. Since mid-January, pork prices in China have dropped over 50% to levels not seen since before outbreaks of ASF, sending the Dalian-traded hog futures index crashing 30% to all-time lows.

Fears of ASF may be the culprit behind the oversupply of pork, says Johnson. China has not reported a fresh outbreak since April, but it has reported over 10 ASF outbreaks this year, largely in northeastern China, after recording six outbreaks last year.

Farmers are sending pigs to the market prematurely owing to the recent wave of ASF, says Johnson. “The pig market is flooded with hogs.”

In China, consumers eat nearly twice as much pork as any other meat, and it is the world’s largest pork consumer, gobbling up 45% of the world’s supply, according to the USDA.

The power of China’s pork prices is so strong that experts refer to the consumer price index (CPI), a measure of the price of a basket of goods that includes the cost of food, houses, and clothing, as the “China pork index,” says Johnson. As pork prices neared record highs in late 2019, for example, China’s CPI grew 4.5% compared with 2018, faster than it had grown in nearly seven years.

Now falling pork prices are helping to offset inflation in China’s broader economy—a phenomenon stoked by surging global demand for goods made in Chinese factories.

“[The low pork prices] are really helping to counteract the broader inflationary pressure in China,” says Darin Friedrichs, senior Asia commodity analyst at StoneX in Shanghai.

For farmers like the Lau brothers, ASF remains a chronic source of anxiety. Hong Kong reported its first ASF outbreak earlier this year, forcing a local farm to cull hundreds of pigs.

“We are doing all we can to be safe,” says Jack Lau. “But until there’s a safe vaccine, there’s no other cure—just like COVID.”