New Zealand red meat exporters to benefit from African swine fever

Less animal protein in the global market is expected to bolster demand for Kiwi sheep and beef exports.
Less animal protein in the global market is expected to bolster demand for Kiwi sheep and beef exports. Photo credit: Getty

New Zealand red meat exports are set to benefit from a viral disease causing havoc in many parts of the world.

It's not COVID-19 though, but rather African swine fever (ASF) - a disease impacting pig herds and restricting pork production in a number of regions across the globe.

While the virus is having a considerable effect on some producers worldwide, it spells good news for New Zealand exporters, according to a new report from Rabobank.

Less animal protein in the global market, particularly in China, is expected to bolster the country's demand for New Zealand sheep and beef exports, says Blake Holgate, RaboResearch animals proteins analyst. 

"China has lost several hundred million pigs to the disease over recent years – following a major ASF outbreak in August 2018 – and the disease has continued to spread in 2020, albeit at a much slower pace than previously," says Holgate.

"With a number of government policies released to encourage pork production, we expect the Chinese pig herd will rebound strongly in 2020. But with rebuilding efforts

reducing slaughter numbers, we maintain our view that China’s 2020 pork production will drop a further 15 to 20 per cent below the low level of production recorded in 2019."

Pork production in Vietnam and the Philippines is also set to drop by around 10 percent, the report states.

"In Europe, the potential for ASF spreading is high as disease pressure has not yet eased in Poland and Eastern Europe. While Belgium is making good progress in its efforts to contain the disease, there remains a risk of an ASF outbreak in a major European pork-producing country, such as Germany," Holgate said.

Previously it was believed pork production in North America, Brazil and some parts of Europe would pick up this year, however COVID-19 put a halt to that.

Holgate said although other regions faced lower production, the major opportunity for Kiwi exporters was the Chinese market, with higher demand for New Zealand sheep and beef exports expected.

The higher demand is expected to offset a drop in other markets, however a softening of prices globally is expected for the remainder of the year, Holgate said.