Grains

China reported two new cases of African swine fever (ASF) in Xuancheng in Anhui province this weekend, from the eastern province of Anhui. This is the sixth and seventh confirmed disease report, in an outbreak that is sure to continue. Sources say estimates of more than 38,000 pigs have been culled in China due to the disease. The Swine Health Information Center (SHIC) says together, China and Romania reported culling 180,000 pigs during the month of August. The latest case occurred on a small farm of 308 pigs, killing 83 hogs. Sunday, another small farm in the city reported having the disease as well. Additional cases are expected to be reported as investigators continue. So far in 2018, there are 12 countries in Europe and Asia facing ASF outbreaks, SHIC reports. There is currently no treatment or vaccine for ASF. “It looks like it’s accelerating,” said Pan Chenjun, senior analyst at Rabobank, told Reuters, adding that she expected farmers to start selling off pigs before they are forced to cull animals if the disease hits their own or neighboring farms. “I think in coming days they will liquidate their herds,” she said. That would hurt prices for all farmers, even those able to keep the disease at bay. Reuters reports China has shut live hog markets in the affected provinces and has banned transportation of pigs and pork products from, or through, those areas. Take Note: Consequences of a National Disease Outbreak While transportation bans are a step in controlling the spread of disease, it will have severe consequences on the entire pork supply chain in China. Northeastern provinces do not have enough slaughterhouse capacity and typically transport pigs to provinces in the South. The enforced travel ban will stop any animals passing through the restricted area. Preventing the disease from spreading from the coastal areas further into central China, is critically important, as that is where a majority of the country's pig farming industry is based. Prices of pork in China have accelerated, according to CNN. Since the first outbreak, prices of pork have increased more than 7%. Supply shortages are expected in the next few months, complicating an already tense trade situation with U.S. U.S. Ups Precautionary Steps USDA-APHIS has increased preparedness and border screening checks to avoid entry of swine byproducts from contaminated areas. As PorkBusiness has reported previously, African Swine Fever has no human health implications, but it is highly contagious and lethal for pigs. The virus is very hardy and can survive in extreme environmental conditions for long periods of time in fresh and frozen meat. SHIC reported South Korea has identified the first instance of the virus being transported out of China in pork products. Though the virus was probably dead due to cooking, but it increases attention on the likelihood of such transport as the outbreak widens. The current situation creates an alert to the international trade of pork, and many countries are revising their commercial agreements with affected countries. This is only further pressuring pork trade relationships. U.S. pork leaders reemphasize the importance of biosecurity and Pork Quality Assurance Plus protocols to maintain a safe U.S. pork supply. Creation of the Secure Pork Supply program would help producers in the event of any national disease outbreak, and help mitigate disruption in business or animal movement, leaders from the National Pork Board say. This also further supports full funding of the National Animal Vaccine and Veterinary Countermeasures bank in the upcoming farm bill.

President Donald Trump announced yesterday that the U.S. and Mexico will forge a new trade accord and signaled that Canada could be left out of the trade equation altogether. “We’re going to call it the United States/Mexico Trade Agreement,” Trump said. Nafta “has a bad connotation because the United States was hurt very badly by Nafta for many years.” The president hailed the Mexico agreement as “a big day for trade.” U.S. Secretary of Agriculture Sonny Perdue said the agreement with Mexico shows President Trump “has achieved important improvements in the agreement to enable our agricultural producers to be treated more fairly. This breakthrough demonstrates that the President’s common-sense strategy of holding trading partners accountable will produce results.” Reaction from U.S. agricultural leaders to the announcement has been mixed. "Mexico is extremely important to every sector we represent,” the U.S. Grains Council said in a prepared statement. “Yet, so too is Canada, our second largest ethanol market and a top-10 corn market. We hope the agreement today opens the door for Canada's reengagement, and we continue to oppose withdrawal from the existing NAFTA under any circumstances except the adoption of a new, beneficial and trilateral pact.” The National Corn Growers Association (NCGA) reacted similarly. While the association is pleased with the Mexico agreement, it wants Canada brought into negotiations and doesn’t want the administration to toss NAFTA out the door. “…We urge President Trump not to terminate the underlying agreement until full trilateral negotiations have been concluded and a new agreement is secured,” said association president, Kevin Skunes, in a prepared statement. “This new agreement has the potential to deliver the economic certainty rural America needs, prematurely terminating the existing agreement would only undermine that potential.” American Soybean Association (ASA) President John Heisdorffer, a soy grower from Keota, Iowa, said, “We need NAFTA and new free trade agreements to build and ensure the certainty of our markets for soy and livestock product exports. Approval of NAFTA would be a big step in the right direction for us, with the uncertainty and market loss resulting from China’s tariff on U.S. soybeans. We are hopeful that a new NAFTA agreement will set the tone for more trade agreements to come.”

The U.S., Mexico and Canada have a good opportunity to reach a Nafta agreement this month, and getting there will depend on the political flexibility of the Trump administration, according to the top representative for Mexico’s private sector. Mexican Economy Minister Ildefonso Guajardo plans to travel to Washington on Wednesday for meetings with U.S. Trade Representative Robert Lighthizer, their fourth set of talks in as many weeks, said Moises Kalach, the trade head for the national business chamber. Teams have advanced significantly on areas including content rules for cars and intellectual property, said Kalach, who is part of a group that receives regular, closed-door updates on the process. The press office of the Mexican Economy Ministry didn’t immediately respond to a request for comment on Guajardo’s schedule. U.S. and Mexican negotiators have been working to reach a Nafta cars deal that would allow Canada to rejoin talks and move toward resolving the toughest issues that affect all three nations. Canada hasn’t attended meetings in the past three weeks, and Trump administration officials have been more publicly optimistic about talks with Mexico. Kalach said he expects Canada to rejoin the talks in the coming days, and both Canada and Mexico have reiterated that they want and expect Nafta to remain a three-nation agreement. ‘Window of Opportunity’ "I think it’s feasible to get a deal; the teams are working very hard," Kalach said in a phone interview Tuesday. "There’s a big push to close an agreement. Whether that happens or not depends on the will of the White House." The nations are pushing for a deal by the end of this month in order to allow sufficient time for U.S. President Donald Trump and his Mexican counterpart, Enrique Pena Nieto, to sign the pact before President-elect Andres Manuel Lopez Obrador takes office Dec. 1. That would take the pressure off Lopez Obrador and allow him to focus on other priorities. "If we don’t take advantage of this window of opportunity, it will close towards the end of the month, and the push would lose force and we’d need to look at another calendar" for getting a deal, Kalach said.