An unprecedented contraction in the supply of pork from China will have a spill-over impact on the dairy sector – as African swine fever looms.
According to a report from Rabobank, the current African swine fever epidemic is expected to reduce China’s pork production by up to 35%, resulting in increased demand for other animal proteins.
"Rising demand for beef could constrain China’s milk production if dairy cow-culling accelerates to fill some of the gap in animal protein,” says Sandy Chen, Rabobank’s senior dairy analyst.
The forecast of 150mmt to 200mmt reduction in pigs represents an estimated 54,500mt to 72,500mt decrease in lactose demand in piglet feed, says Mary Ledman, Rabobank’s global dairy strategist.
“The ASF situation in China has had a double impact on U.S. whey, permeate, and lactose exporters as the world’s largest market for dairy-derived animal feed shrinks and US competitiveness erodes due to the trade war-induced tariff," says Ledman.
