Soy Prices in Trough After Sick-Pig Slaughter

China’s pig population is shrinking, which may not be good news for American soybean farmers.

China is the world’s largest importer of soybeans, and the country’s 400 million-plus hogs are the biggest consumer of soy meal. But last summer, African swine fever was detected in some pigs in the north, and as the virus spread, more than 900,000 hogs were slaughtered to attempt to contain the problem.

China’s Ministry of Agriculture and Rural Affairs said the hog population in December was nearly 5 percent smaller than a year earlier.

A shrinking pig population means reduced need for soybeans. And while the virus, deadly to hogs, isn’t harmful to humans, it has turned some people off the meat, denting pork sales.

International experience shows that it takes at least five or six years to eradicate African swine fever, so the process is expected “to be long-term work,” said Tang Ke, the head of the ministry’s marketing and information department.

December soybean imports were the smallest since 2011, at 5.7 million metric tons, down 40 percent from a year earlier, according to China’s General Administration of Customs. Most came from Brazil, with U.S. soybeans making up just 1.2 percent—69,000 metric tons, down from 6.2 million metric tons a year earlier.

That said, recent progress in talks between the nations has led to an uptick in U.S. soybean sales, including an announcement Thursday that China would buy another 5 million metric tons of American soybeans.

Source: Wall Street Journal