African Swine Fever has made its way to China and has started to affect the lean hog market. China is the world’s largest pork producer and produces roughly 48% of the world’s pork annually. Outbreaks of African Swine Fever have been confirmed in 28 Chinese provinces and China has begun to take action by destroying roughly 18% of their herd, however, this has yet to be confirmed. If that number ends up being accurate, that would represent the number of hogs that total the U.S. supply. This epidemic is not exclusive to China, other areas with confirmed outbreaks include Eastern Europe, Belgium, and Vietnam. Further concern can be drawn from Australia, which reported the sickness had been found in pork smuggled from China. These concerns may lead to more volatility than normal in the lean hog market. Thus far in 2019 there has been very little volatility and the hog market has remained relatively stable. However, with this news of further African Swine Flu outbreaks and the always persistent trade wars with China, that stability is bound to change. Lean hogs are something to keep an eye on as we get deeper into 2019. For more information on Lean hogs and other ags, check out the CME Group’s Ag Update.

Lean Hogs Apr ’19 Daily Chart (source: CME Group)

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