African swine fever: short-term gains mask long-term risks has been saved
African swine fever: short-term gains mask long-term risks
How is the African swine fever impacting Australia’s pig industry, livestock industries and global markets?
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African swine fever (ASF) – and the threat it poses to Australia – has started to make media headlines, after the highly contagious livestock virus was detected just 600km from Australia’s northern border in Timor-Leste in early September.
While ASF does not pose a threat to human health, or other forms of livestock beyond pigs, it is fatal to pigs, and untreatable. Once infected, an animal’s death usually follows in seven to ten days.1
Originating in Africa early in the twentieth century, the virus initially spread through Europe, with (subsequently eradicated) outbreaks also recorded in South America and the Caribbean.2 The virus reached Asia in mid-2018, and despite widespread animal culling has quickly spread through much of the continent.3
Figure 1: Distribution of ASF and recent first outbreaks in Asia, as at October 2019.
Source: Adapted from FAO4 and OIE5
The impact of ASF has escalated since reaching China with global pig numbers markedly reduced and flow on effects in international meat markets. In 2018, China both produced and consumed around 50% of global pig meat supplies (55.4 million tonnes).6 Estimates of the impact of ASF on the size of the Chinese pig herd are high, ranging from 18% to as much as 50%.6,7
As a result, Chinese pig meat prices are up 47% year-on-year for August 2019, and imports have also skyrocketed, up 76% higher over the same period.8,9
Figure 2: Chinese pig herd, 1975 to 2019 (forecast)
Source: US Department of Agriculture9
China’s pain drives price gain for Australian pig and beef producers
ASF’s impact is far from contained to the Chinese pig industry, with biosecurity incursions often having implications for other industries and countries.
In Australia, domestic pig producers — who focus on supplying the local fresh pork market — look set to benefit from higher pig prices, which are around 50% higher in the year to September 2019.10,11,12 Our processed pig meat (e.g. bacon and hams) producers are also expected to benefit from China’s ASF pain, with higher global prices expected to reduce the competitiveness of imports in Australia, which account for 75% of supply.13,14
Australian beef exports are also markedly higher as Chinese households have substituted some meat consumption (along with fish and poultry) from pork to relatively lower cost frozen beef cuts. In August export volumes to China were up 115% year-on-year, alongside a 20% jump in prices.15
Australian exports of chilled beef and sheep meat to China, however, have not been materially impacted as they are primarily directed to high value end markets which don’t directly compete with pig meat.16
If ASF reached Australia?
While Australia’s livestock producers are currently benefiting from higher prices, if ASF reached our shores the impacts would likely be disastrous for local pork production, with the immediate destruction of any infected, or potentially infected, pigs required.
Australia’s feral pig population creates a significant potential spread vector for the disease should it emerge. Standard animal pest and disease management techniques such as zoning and animal destruction would likely prove ineffectual in controlling ASF’s spread as feral pigs are distributed across most of farming Australia.17,18 In such a scenario, the virus would likely become endemic, crippling the country’s $5.3 billion pig industry and the livelihoods of 2,500 pig farmers.19
In the longer run, consumer demand for pig meat in Australia would also likely suffer, and our reputation as a disease-free source of meat in export markets would be compromised, something that could create broader market access issues.
Biosecurity central to managing ASF risk
The outbreak of ASF in Timor-Leste might have created headlines and brought the virus to the front of mind for much of Australia, but our border security continues to actively manage all biosecurity threats, with more than 27 tonnes of pig meat —intercepted by biosecurity authorities between November 2018 and August this year.20
The importance of biosecurity in managing the risk ASF, and other foreign pest and disease outbreaks, cannot be understated. It underpins Australia’s international competitiveness and supports access to high value export markets, and ABARES estimates that, in the absence of current Australian biosecurity controls, average farm profits would fall by as much as $17,500 a year.21 Moreover Australia’s biosecurity safeguards the health of native flora and fauna, as well as human health and other industries including tourism.
And as risk vectors increase with increased trade and tourism, the need for a robust biosecurity system is unlikely to abate any time soon. In the next 15 years, Australia’s plant industry is expected to respond to more than 300 biosecurity incidents.22
This risk is expected to be driven by greater passenger entries and cargo movements. Container imports, for example, are projected to increase by around 150% between 2015 and 2030, while aircraft movements at major Australian airports are forecast to rise by around 50%.23
Australia’s geographic isolation remains a natural advantage in managing pests and disease. However, as the ASF threat is demonstrating, maintaining a robust biosecurity system will only become more important as global risks increase.
Robert Leith – Manager, Deloitte Access Economics
Jack Mullumby – Senior Analyst, Deloitte Access Economics
Stacey Paterson – Manager, Deloitte Access Economics
Michelle Hall – Analyst, Deloitte Access Economics
1. Iowa State University, Fast Facts: African Swine Fever (2018)
2. Agriculture and Horticulture Development Board, Pig costs of production in selected countries (2016)
3. FAO, Early reaction contingency planning for an ASF emergency (n.d.)
4. UN FAO, ASF situation update (2019)
5. OIE, WAHIS interface (2019)
6. US Department of Agriculture, Production Supply Disposal Database (2019)
7. Rabobank, Pork Quarterly (2019)
8. National Bureau of Statistics, Consumer prices in August 2019 rose by 2.8% year-on-year (2019)
9. China Customs, Statistics (2019)
10. ABARES, Weekly update (2019)
11. Lower pig slaughter and pig meat production in Australia has also provided support to prices during this period
12. Australia bans the import of fresh pork due to disease concerns
13. Australian Pork Limited, Submission to the Productivity Commission Inquiry into Bilateral and Regional Trade Agreements
14. Australian Pork Limited, But is it an Aussie HAMburger? (2013)
15. MLA, Data library (2019)
16. Department of Agriculture, African Swine Fever (2019)
17. FAO, Early reaction contingency planning for an ASF emergency (n.d.)
18. Department of Environment, The Feral Pig (2011)
19. APL Pork Industry in Australia 2015-16: Economic Contribution Report (2017)
20. McKenzie, B, Strengthening our borders to stop swine fever (2019
21. ABARES, Farm gate value of Biosecurity (2017)
22. Plant Biosecurity Cooperative Research Centre, Submission to the agricultural competitiveness issues paper (2014)
23. BITRE Forecasting Australian Transport: A Review of Past Bureau Forecasts (2018)
Published: October 2019