Rich? You Need a Bacon Necklace

Internet meme takes off as pork price skyrocket

Michelle Klieger
Sep 6, 2019 · 5 min read
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https://www.fun48.com/article-903641-1.html

Millions of dead pigs are beginning to have a major impact on the food security of 1.4 billion Chinese. One year ago, China confirmed its first case of African Swine Fever (ASF), a deadly pig disease that is devastating to pig herds and extremely challenging to contain, but thankfully harmless to humans. The presence of ASF in China is particularly dire because Chinese people eat more pork than everyone else in the world (combined) and raise more pigs than the rest of the world (combined).

This situation has been simmering for a year. Recent data from the Chinese government is causing it to boil over. In July, Chinese government data indicated that the Chinese herd fell by 33% since last year, which will cause a pork shortage of 10 million metric tons this year alone. This shortage cannot be alleviated by imports because fewer than 10 million metric tons of pork are sold internationally annually.

Ten million metric tons translates to 20% of annual Chinese consumption. And this number is conservative since the Chinese government tends to massage data to fit its narrative. After the government data was released in July, the price of Chinese pork increased by 23% between July and August. That brings the year-over-year total to 47%. With demand and fear rising, pork is selling for $4.92 per kilogram in China, compared to $ $3.74 in the United States.

Economic Impact

Experts today believe that the weight of pork inflation on the CPI has declined to 2%. One reason is that pork consumption has stabilized in recent years. If incomes keep rising, people can purchase other items, diversifying the CPI basket. Also, in urban areas, people are eating more beef and seafood. Again, reducing reliance on pork. These factors might mean that this pork price spike might not be as bad for the overall economy as previous ones.

Options to Mitigate Inflation

In addition to easing monetary policy, China is taking other actions to keep its citizens fed and keep pork prices manageable. However, none of these solutions are silver bullets.

Increase Supply

Incentives

Second, breeding sows are also dying from this disease, not just pigs for slaughter. Before new pigs can be put into these new operations, the breeding herd needs to be replenished. This takes time. A breeding sow will be pregnant for 3 months. It takes her female offspring 18 months before they reach reproductive maturity. Then they will have to be pregnant for 3 months before they have new piglets.

Pigs that are born that will not become breeding sows will be raised on a pig operation for 5–6 months before they reach market weight. Meaning, the fastest pigs can be restocked with current sows is 5–6 months. That’s a significant lag time.

Reserves

Imports

Decrease Demand

Basic Economics

Campaigns

Manage Prices

Looking Forward


Originally published at https://gns.pub on September 6, 2019.

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