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BRAKKE CONSULTING ON AFRICAN SWINE FEVER AND AGRI-MARKETERS' 2020 BUDGETS
Jun. 3, 2019
Source: blog by Bob Jones, Brakke Consulting
If you are on the livestock side of the animal health business, you might be getting tired of reading about African Swine Fever in China. But you shouldn't be tired yet of thinking about its impact.
In a decade or so, we will look back at this disease outbreak in the largest swine-producing country in the world as causing real disruption in the animal health industry.
Here are just three things we see unfolding.
1. China wants to be self-sufficient in pork production. They won't be in ten years and never will be. They will still be importing pork from low-cost countries with better meat quality perceptions - but China will dictate how those pigs are produced.
2. China's small to medium sized producers, especially those near cities, will disappear and will be replaced by huge, integrated, single-site production units and slaughter facilities. And they will use as much artificial intelligence as possible, all done in the name of biosecurity and efficiency. Very few decision-makers will control how pork reaches the Chinese table. These will be important people to animal health companies.
3. The countries bordering China will discover that their pigs have ASF. The US will have cases of ASF - brought over on an airplane or a ship. This is a hardy virus. Animal health companies with biological R&D programs will have vaccines in the field, but none will be 100% effective. Every pig will be vaccinated because the risk of infection will always be there.
Later this summer, most companies will start on their budgets for 2020 and their longer-range strategic plan. Strategic plan discussions that I was involved in about used to focus on how fast the Chinese pork production industry would consolidate or how we would manage through the viral disease of the day, like PED (porcine epidemic diarrhea) or CSF (classical swine fever). ASF will be in the plans of everyone involved in protein production for a while and for good, global reasons. This level of disruption certainly means opportunity - just need to think.
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