CHRISTINE MCCRACKEN RABOBANK’S PROTEIN
INDUSTRY ANALYST GOES BIG ON AFRICAN SWINE FEVER.
W
hen Christine McCracken, senior protein
analyst for global lender Rabobank, predicted
last fall that the African swine fever (ASF) virus
spreading in China would change the whole
landscape of meat production worldwide, some
of her clients thought she was exaggerating – or just plain
crazy. Not now.
ASF is affecting 150 to 200 million pigs throughout Asia,
says McCracken. She expects Chinese pork production losses
of at least 30%. The loss is nearly as large as Europe’s annual
pork supply. In addition, she expects production losses to
exceed 10% in Vietnam – the world’s fifth-largest pork-pro-
ducing country and a significant supplier to China.
Rabobank believes there will be a net supply gap of almost
10 million metric tons in the total 2019 animal protein supply,
which will increase farmgate and consumer prices.
SF: Are you confident in the data?
CM: Our team in China meets with producers, packers, feed
companies, equipment companies, genetic suppliers, ani-
mal health companies, and other banks. We are the world’s
leading food and agricultural bank, so we have relationships
with a majority of the largest industry players. We build
our forecasts using input from our global team of protein
analysts and model all of the potential scenarios. It is difficult
to remember any event having such a devastating impact on
the pork industry. It will be nearly impossible for China to
find enough protein to fill that gap in supply in the short run.
There are just too many logistical hurdles and not enough
surplus protein.
SF: Do clients understand the
impact of ASF?
CM: The U.S. protein industry
does not fully comprehend the
magnitude of the losses or the
potential impact on the global
market. It’s hard to wrap your
head around it. Some of the
companies downstream, like
further processors and other
buyers of meat, still don’t think
it’s a big deal. There is really
a wide range. There are very
well-informed people in the
industry who understand
ASF and all of its implications.
There are others who are in
the deboning and the need to
sell product domestically, you
can reduce some of the labor.
For most companies, these are
workers who can be used in
other plants or on other lines.
If your plant has a labor issue,
if you have been struggling
with labor already, this could
help alleviate some of those
constraints.
SF: How long will these
changes have an impact on
the meat industry?
CM: China’s problem is not
going away anytime soon.
There is no easy way to
control the disease and no
way to prevent it. Operations
that have been hit with ASF
are unlikely to come back
into production for several
years. China will rebuild; it
Photography: Rabobank
NAME: Christine McCracken
TITLE: Executive director, animal
protein, Rabobank
HOMETOWN: Springfield, MN
CAREER: Spent 20 years on
Wall Street following food and
agriculture stocks. Joined
Rabobank in 2017 as a protein
industry analyst.
RABOBANK: Global leader in
food and ag financing,
headquartered in the
Netherlands.
denial or think the impact
will be short lived, and every-
thing in between. The lack of
credible information invites
speculation. That creates
volatility in the market.
SF: How is this impacting the
U.S. meat industry right now?
CM: There hasn’t been
much direct impact thus
far. The market has run on
the expectation of stronger
export demand from China,
but orders have been spotty.
There are foreign buyers
looking for long-term supply
arrangements with our pork
processing plants, but U.S.
suppliers have been slow to
commit. There is a relatively
fixed amount of pork to ex-
port, and, ultimately, it will go
to the market that is willing
to pay the most, and that may
or may not be China.
Packers would need a
consistent supply of
ractopamine-free pigs
and a dedicated shift or
a portion of a shift to
ensure there was no
cross-contamination.
There are a few
plants that have
that capability and
will be shipping
six-piece carcasses
to China, but it
will not be every-
one.
One potential
positive of making
the shift to split
carcasses is the
potential labor
savings. By
eliminating
August 2019 | Successful Farming at Agriculture.com bonus
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INSIDER
By Betsy Freese, Executive Editor ª
