Hog prices exploded to a two-month high on Friday as markets assessed a new threat: an outbreak of African Swine Fever (ASF) in China. The highly contagious and fatal disease has been found on 18 farms across six provinces in China, the world’s largest hog producer and consumer. While the disease doesn’t affect humans, the impact could be monumental on the global food supply.
The United Nations issued a report that there is a “very real possibility that ASF could jump the border into other countries,” prompting an emergency response. Thus far, China has culled only 40,000 of its 400 million pigs, but further spread could result in greater losses.
While China is threatened with a pork shortage, the United States has an excess supply, but the ongoing tariff disputes between the two countries are likely to prevent direct Chinese imports of U.S. pork. However, expectations for stronger global demand for U.S. pork have helped to boost prices in recent days, pushing December lean hog futures near 57 cents per pound, a 30% increase over the last month.