North American prices have been very challenging for pig producers; they've been losing money. However, the United States Mexico Canada Agreement (USMCA) could offer producers some reprieve.

“Everybody is hoping that the new [USMCA] deal, the phase one deal that the US has made with China in the last few days, will supercharge our prices,” said Long. “I'm optimistic that will happen, but as I look at the slaughter weights and what's happening to the daily marketing of hogs, both are dropping or moving in that direction. Looking at futures, they show a trend of increased prices coming up. I'm optimistic the price points they have right now will improve.”

China pig prices soar

From a price standpoint, China’s prices have shifted significantly higher.

“They aren't quite at the highest level they were at, but if we use US dollars, they are at about US$2.30 a pound which brings about US$650 for a market hog, so people are making US$300 a head,” he noted. “We know one company last week that had their annual meeting, and they were giving Porsches and BMWs as bonuses in China. So ASF is kind of like a two-edged sword. For some people, it's been a disaster, and for other people is the best thing that ever happened to them.”

Long says he doesn’t believe that China has ASF under control at this time. Strong prices are expected to continue for a minimum of two years. The situation in China is creating opportunities for pork from North America, Brazil and Europe.

EU pig prices are strong

In Europe, pig prices have been strong over the last six months and at times near their highest in history, says Long. The risk they have now is ASF, which has been in Poland for some time but has now moved within 10 miles of the German border.

“Going forward, if ASF gets into Germany, will China stop importing?” he said. “Currently China is importing about 20 percent of its pork, give or take, from Germany. China's never purchased pork up until now from any ASF-positive country. ASF getting into Germany could be a big game changer.”

In size terms, Germany is about double the size of Iowa’s market with about two million sows, while Iowa has about one million sows.

Germany is building fences to keep feral pigs out. However, their challenge is that there's no border, and people are driving back and forth.

“Somebody throws some meat out on the road, and some wild boar eats it which is what happened in start the outbreak in Belgium,” Long said.

In Europe, Long said the data doesn’t indicate expansion is occurring. He attributes that to environmental and regulatory issues.

In Brazil, they've seen a boost in hog prices since they opened trade with China. Normally, their prices are below the US, but right now they're probably 35 percent higher, said Long.

“The question going forward with all these countries with the phase one [US-China] agreement including US$40 billion more sales of agri-products in the US, is how much is that going to have to be pork products to live up to the commitment,” Long said.

ASF in the US?

Worry continues about ASF making its way into the US. Long speculates that the virus has come to the US from China in meat, but it hasn’t gotten into the pig population.

“There are two other diseases that are global challenges - one is foot-and-mouth disease (FMD) and classical swine fever, and we've never gotten that here,” said Long. “I think it's a big benefit that there are oceans. It's amazing that Germany hasn't got it when it's been so close in Poland for three years, and there are people travelling back and forth all the time. To me, that's a good sign for us that we have the opportunity to mitigate the risk.”